Futuresoft Solutions Private Limited, v. Rajcomp Info Services Limited (Risl)

Rajasthan HC26 May 2023ARBAP/67/2022

Case brief

AI extract

What is this about?

The High Court of Rajasthan declined to approve the sole arbitrator unilaterally appointed by the applicant. Instead, it exercised its powers under Section 11 to appoint an independent arbitrator, Hon'ble Mr. Justice Mahesh Bhagwati, to adjudicate the commercial dispute.

What did the court decide?

Appointment of Hon'ble Mr. Justice Mahesh Bhagwati as sole arbitrator.

Futuresoft Solutions Private Limited, Vs Rajcomp Info Services… — Arbitration | Rajasthan HC (2023)

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[2023/RJJP/012175]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Arbitration Application No. 67/2022

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Futuresoft Solutions Private Limited, Having Its Registered Address At 253, Okhla Industrial Estate Phase Iii, New Delhi110020 Through Its Director Aasutosh Sharma.

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----Applicant

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Versus

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Rajcomp Info Services Limited (RISL), Having Its Registered Address At First Floor, C Block Yojana Bhavan, Tilak Marg, C Scheme, Jaipur Rajasthan-302001.

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----Respondent

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For Applicant(s) : Mr.Manish Kumar Meena, Adv. For Respondent(s) : Mr.Ashish Kumar, Adv.

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HON'BLE MR. JUSTICE ASHOK KUMAR GAUR

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Order

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26/05/2023

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The instant arbitration application has been filed by the applicant-petitioner under Section 11(5) of the Arbitration and Conciliation Act, 1996 for appointment of Mr.Jayant Sood as sole arbitrator for resolution of dispute said to be arisen between the applicant and the respondent.

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Learned counsel Mr.Manish Kumar Meena appearing for the applicant submitted that the applicant is a registered company involved in the business of technical consultancy and system integration since last 25 years.

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Learned counsel submitted that the respondent-Company issued a Request for Proposal (RFP) for Raj. E-Sign Digital Signature Platform and invited bid for the same. Learned counsel

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submitted that the applicant was a successful bidder and started working on the project, as per the terms and conditions agreed between the parties.

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Learned counsel submitted that the respondent issued work orders dated 25.10.2017 and 05.10.2018 and the applicantpetitioner received 90% of the CAPEX amount after the successful completion of the work orders.

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Learned counsel submitted that the respondent after fully satisfied about work of applicant, had issued completion certificate, however, an invoice amounting of Rs.1,79,85,167/was returned back by the respondent without any fault.

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Learned counsel submitted that the respondent also terminated the work Contract vide termination order dated 22.04.2021 and also forfeited the amount of Performance Security Deposits (PSD) as well as declined to make payment of 10% of CAPEX payable for Work Orders dated 25.10.2017 and 05.10.2018. Learned counsel submitted that the respondent was liable to pay total amount of Rs.4,64,09,324/- under different heads.

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Learned counsel submitted that the applicant made several requests to the respondent-Company to make payment, however, the respondent did not pay any heed.

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Learned counsel submitted that the applicant in order to resolve the dispute, suggested the respondent to invoke arbitration clause as mentioned in RFP.

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Learned counsel submitted that the respondent by a Letter dated 18.08.2021, gave its consent to invoke the arbitration clause. Learned counsel submitted that the applicant after waiting

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for the long time, when did not get any recommendation on name of the arbitrator, the applicant was constrained to appoint one Mr.Jayant Sood as a sole arbitrator, as such person was holding the certificate of practice from the Institute of Company Secretary and was also a Law Graduate with MBA having experience in Legal & Secretarial Field of more than 25 years.

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Learned counsel submitted that the arbitrator, so appointed by them called meeting of the parties to resolve the dispute, however, the respondent objected to the appointment of sole arbitrator and delayed proceedings.

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Learned counsel for the applicant submitted that since the respondent did not participate in the arbitration proceedings and further did not pay the balance amount, as such the applicant has approached this Court for invoking its power to approve the arbitrator appointed by them.

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Learned counsel Mr.Ashish Kumar appearing for the respondent submitted that reply to the arbitration application has been filed on their behalf.

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Per contra , learned counsel submitted that the sole arbitrator appointed by the applicant cannot adjudicate the dispute and accordingly the respondent had objected to such unilateral appointment by the respondent.

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Learned counsel submitted that the dispute if is to be referred to the arbitration proceedings, the appointment of arbitrator by the applicant may not be approved by this Court and an independent arbitrator may be appointed.

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I have heard the submissions made by learned counsel for the parties and perused the material available on record.

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This Court finds that RFP contained several conditions in respect of obligations of the applicant-petitioner & respondent and Clause 15 specifically provided for settlement of disputes as per provisions of the Act of 1996.

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This Court finds that the applicant could not have appointed the sole arbitrator as per their own choice and as such the prayer made by the applicant to approve appointment of sole arbitrator as appointed by them, cannot be accepted by this Court.

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This Court, accordingly, allows the present arbitration applications filed by the applicant, while exercising the power conferred under Section 11 (5) read with Section 11(6) of the Act of 1996, appoints Hon’ble Mr.Justice Mahesh Bhagwati (Former Judge of High Court), L-44 Sukhshanti, Income Tax Colony, Durgapura, Jaipur as a sole Arbitrator to adjudicate the dispute between the parties. The payment of cost of arbitration proceedings and arbitration fee shall be made as per the 4^th Schedule appended to the Act of 1996.

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The intimation of appointment, as aforesaid, may be given by the counsel for the parties as well as by the Registry to Hon’ble Mr.Justice Mahesh Bhagwati, L-44 Sukhshanti, Income Tax Colony, Durgapura, Jaipur.

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(ASHOK KUMAR GAUR), J

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Monika/37

Futuresoft Solutions Private Limited, v. Rajcomp Info Services Limited (Risl)

Case brief

What is this about?

What did the court decide?

Futuresoft Solutions Private Limited, v. Rajcomp Info Services Limited (Risl)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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