This petition was filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to resolve disputes arising from a Memorandum of Understanding (MOU) dated June 17, 2022, concerning unpaid rental returns for a commercial unit. The petitioner claimed that outstanding rental dues amounted to Rs. 19,74,746/-. Since the respondent stated they had no objection to the appointment and a valid arbitration agreement existed under Clause 12 of the MOU, the Delhi High Court found no impediment to granting the request. Consequently, the High Court appointed a sole arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC) and disposed of the petition.
- Factual Background:
- The petitioner, owner of a commercial unit purchased from the respondent through a conveyance deed/builder-buyer agreement, entered into an MOU dated June 17, 2022.
- The petitioner alleged that rental returns were paid only partially after June 2024, leaving an outstanding balance of Rs. 19,74,746/- despite repeated requests.
- Arbitration was formally invoked by the petitioner via a notice dated March 11, 2026, under Section 21 of the Act.
- Arguments & Stand of Parties:
- The petitioner sought the constitution of an arbitral tribunal to adjudicate the financial defaults.
- The respondent, through counsel, conceded and stated they had no objection to the appointment of a Sole Arbitrator.
- Court Observations & Findings:
- Reaffirming the principle from SBI General Insurance Co. Ltd. v. Krish Spinning, the Court noted that its scope of inquiry under Section 11 is strictly confined to examining the prima facie existence of an arbitration agreement.
- The Court verified that a valid arbitration clause existed under Clause 12 of the MOU and that both parties were ad idem on referring the dispute to arbitration.
- Final Directions & Appointment:
- Hemlata Rawat (Advocate) was appointed as the Sole Arbitrator to adjudicate the disputes.
- The arbitration proceedings will be governed by the rules and aegis of the Delhi International Arbitration Centre (DIAC), with fees as per the DIAC Schedule.
- The arbitrator is required to submit disclosures under Section 12(2) within two weeks of entering reference, and all legal pleas and objections regarding jurisdiction are kept open for the parties to raise before the arbitrator.
