ARB.P./839/2021 of SHIVAKRITI AGRO (P) LTD. Vs UMAIZA INFRACON LLP & ORS.

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*IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 9[th]December, 2021

+ARB.P. 839/2021

SHIVAKRITI AGRO (P) LTD.

..... Petitioner

Through:Mr. Sandeep Sethi and Mr. JayantMehta, Senior Advocates with Mr.Lalit Gupta, Mr. Siddharth Arora,Advocates.Mehta, Senior Advocates with Mr.Lalit Gupta, Mr. Siddharth Arora,Advocates.

versus

UMAIZA INFRACON LLP & ORS...... Respondents

Through:Mr. O.P. Gaggar, Advocate for R-1and 3.Mr.ArunAggarwalandMr.Abhishek K. Singh, Advocates for R-4.and 3.Mr.ArunAggarwalandMr.Abhishek K. Singh, Advocates for R-4.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

[VIA HYBRID MODE]

SANJEEV NARULA, J. (Oral):

1.The present petition under Section 11 of the Arbitration andConciliation Act, 1996 [hereinafter “the Act”] seeks appointment of SoleArbitrator for adjudication of disputes pertaining to the Facility Agreementdated 30[th]September, 2019 which contains an arbitration clause, producedhereunder:

“Article 6 – Dispute Resolution and Jurisdiction

6.1 This Agreement shall, in all respects be governed by and construed inaccordance with the laws of India.

6.2 The Parties hereto undertake to use their best efforts to resolve any disputearising out of or in connection with this Agreement through consultation in

good faith and mutual understanding, provided that such consultation shall notprejudice the exercise of any right or remedy of either Party hereto by any suchParty in respect of any such dispute.

6.3 If any dispute of difference that may arise between the Parties (other thanany inter se dispute among the Requesting Parties, which shall be outside thescope of this Agreement), and the same is not resolved in mutual good faithdiscussion, it shall be decided by way of final and binding arbitration to be heldin accordance with the Arbitration and Conciliation Act, 1996 (“ArbitrationAct”) to be conducted by sole Arbitrator to be nominated by Shivakirti.6.4 The seat and venue of arbitral proceedings shall be at Delhi, India and thelanguage of the proceedings shall be the English language.any inter se dispute among the Requesting Parties, which shall be outside thescope of this Agreement), and the same is not resolved in mutual good faithdiscussion, it shall be decided by way of final and binding arbitration to be heldin accordance with the Arbitration and Conciliation Act, 1996 (“ArbitrationAct”) to be conducted by sole Arbitrator to be nominated by Shivakirti.6.4 The seat and venue of arbitral proceedings shall be at Delhi, India and thelanguage of the proceedings shall be the English language.

6.5 Subject to the above provisions contained in Article 6, the Parties submit toexclusive jurisdiction of Courts at Delhi, India for any interim or such otheremergency relief.”exclusive jurisdiction of Courts at Delhi, India for any interim or such otheremergency relief.”

Factual Background:

2.The facts relevant for decision on the instant application are as

follows:

(i)Respondent No. 1 (viz. Umaiza Infracon LLP) is an LLP whereinRespondent No. 2 (viz. Mr. Ajay Yadav) and Respondent No. 3 (viz.Ms. Lata Yadav) are partners.Respondent No. 2 (viz. Mr. Ajay Yadav) and Respondent No. 3 (viz.Ms. Lata Yadav) are partners.

(ii)Earlier, Corporate Insolvency Resolution Proceedings [“CIRP”]pertaining to Respondent No. 4 (viz. M/s. Sunstar Overseas Limited)werependingbeforetheNationalCompanyLawTribunal.Respondent No. 1 filed Resolution Plan in the said proceedings,which was approved by NCLT on 12[th]September, 2020. In order todischarge their obligations under the Resolution Plan, RespondentsNo. 1 to 3 approached the Petitioner seeking financial assistance. AFacility Agreement dated 30[th]September, 2019, was executed,whereunder, financial assistance to the tune of Rs. 130 crores wasextended by the Petitioner to Respondent No. 1, which was thenutilized for making payments to the creditors of Respondent No. 4.pertaining to Respondent No. 4 (viz. M/s. Sunstar Overseas Limited)werependingbeforetheNationalCompanyLawTribunal.Respondent No. 1 filed Resolution Plan in the said proceedings,which was approved by NCLT on 12[th]September, 2020. In order todischarge their obligations under the Resolution Plan, RespondentsNo. 1 to 3 approached the Petitioner seeking financial assistance. AFacility Agreement dated 30[th]September, 2019, was executed,whereunder, financial assistance to the tune of Rs. 130 crores wasextended by the Petitioner to Respondent No. 1, which was thenutilized for making payments to the creditors of Respondent No. 4.(iii)Later in February 2020, additional facility amount of 16 crores was

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disbursed, and thus total amount of Rs. 146 crores presently standpaid to Respondent No. 1.

(iv)Now, the IBC proceedings against the Respondent No. 4 standconcluded and the entire shareholding of Respondent No. 4 standstransferred to Respondent No. 1.concluded and the entire shareholding of Respondent No. 4 standstransferred to Respondent No. 1.

(v)The Petitioner came to know that Respondents had breached theirobligations under the Facility Agreement by attempting to createcharge/ encumbrances over their assets in violation of several clausesof the Facility Agreement. In these circumstances, they approachedthis court under section 9 of the Act [in OMP (I) (COMM.) No.180/2021], wherein an interim order was passed in favour of thePetitioner which is continuing till date.obligations under the Facility Agreement by attempting to createcharge/ encumbrances over their assets in violation of several clausesof the Facility Agreement. In these circumstances, they approachedthis court under section 9 of the Act [in OMP (I) (COMM.) No.180/2021], wherein an interim order was passed in favour of thePetitioner which is continuing till date.

(vi)Since disputes had arisen due to non-payment of dues and breaches ofthe Facility Agreement, Petitioner vide notice dated 12[th]June, 2021requested Respondents to agree for arbitration. The request wasdeclined.the Facility Agreement, Petitioner vide notice dated 12[th]June, 2021requested Respondents to agree for arbitration. The request wasdeclined.

(vii)In the above background, Petitioner seeks reference of disputesbetween itself and Respondents No. 1 to 4 to arbitration.between itself and Respondents No. 1 to 4 to arbitration.

OBJECTIONS OF RESPONDENTS NO. 1 AND 3:

3.Mr. O.P. Gaggar, counsel for Respondents No. 1 and 3 makes thefollowing objections: -following objections: -

(i)Respondent No. 3 [viz. Mrs. Lata Yadav], who held 99% shares ofRespondent No. 1 [viz. Umaiza Infracon LLP] at the relevant time, isnot signatory to the agreement in spite of her name being mentionedRespondent No. 1 [viz. Umaiza Infracon LLP] at the relevant time, isnot signatory to the agreement in spite of her name being mentioned

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as party to the Facility Agreement, and therefore, the same is notbinding on her either.binding on her either.

(ii)Respondent No. 1 is governed by the document of incorporation,which as per the Limited Liability Partnership Act, 2008 [hereinafter“LLP Act”] is the sole source of authority for the LLP. It is governedby the terms of its Incorporation Agreement dated 21[st]February, 2019(as amended on 21[st]June 2019). Mrs. Lata Yadav, on the date ofalleged execution of the remaining Facility Agreement, had 99%share, whereas Mr. Ajay Yadav had the remaining 1% share in thesaid firm. Clause 22 of the said incorporation document mandates thatall matters related to Respondent No. 1 shall be decided by aresolution passed by majority (in number) of the partners and forthis purpose each partner shall have vote according to the profit-sharing ratio. Clause 36 of the incorporation document expresslyprovided that the firm is not bound by anything done by partner if:(a) the partner in fact has no authority to act for the LLP in doing aparticular act, or (b) the person knows that he has no authority or doesnot know or believe him to be partner of the Umaiza Infracon LLP.

(iii)Thus M/s. Umaiza Infracon LLP does not permit or authorise singledesignated partner to sign or enter into any agreement withoutconcurrence of the other partners. The signing of the alleged FacilityAgreement was never authorised by Respondent No. 3, who was themajority holder designated partner.

(iv)The resolution (dated 28[th]September, 2019) mentioned in the FacilityAgreement was never passed by M/s Umaiza Infracon LLP. Thus, aAgreement was never passed by M/s Umaiza Infracon LLP. Thus,

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reference thereof in the alleged agreement is totally wrong as noresolution was ever passed or is in existence.

(v)Mr. Ajay Yadav had no authority to sign the Facility Agreement forand on behalf of M/s Umaiza Infracon LLP.and on behalf of M/s Umaiza Infracon LLP.

(vi)The LLP and the non-signatory partners cannot be bound by any actdone by partner without proper authority in terms of theIncorporation Document and the LLP Act.done by partner without proper authority in terms of theIncorporation Document and the LLP Act.

(vii)The signatures of Mr. Ajay Yadav on the alleged Facility Agreementwere obtained by fraud and material concealment. Petitioner’srepresentative who obtained his signatures told him that it was roughdraft agreement, not as per the consensus arrived between them, andthat later the same shall be torn and replaced with properly executedcontract incorporating the actual deal arrived at with him.were obtained by fraud and material concealment. Petitioner’srepresentative who obtained his signatures told him that it was roughdraft agreement, not as per the consensus arrived between them, andthat later the same shall be torn and replaced with properly executedcontract incorporating the actual deal arrived at with him.

(viii) The rubber stamp embossed on the alleged Facility Agreement is notthe one that is used by Umaiza Infracon LLP. Petitioner on its ownhas procured the stamp and affixed it, only to give it semblance oforiginality.the one that is used by Umaiza Infracon LLP. Petitioner on its ownhas procured the stamp and affixed it, only to give it semblance oforiginality.

(ix)The alleged Facility Agreement is for an unlawful consideration and istherefore, void ab-initio. The beneficial owners of the Petitioners arenone other than the original promoters / directors of Respondent No. 4i.e., M/s Sunstar Overseas Ltd. Section 29A of the Insolvency andBankruptcy Code, 2016 [hereinafter “IBC”] bars the promoters anddirectors of company, which is in CIRP, from participating in itsresolution process, either directly or indirectly.therefore, void ab-initio. The beneficial owners of the Petitioners arenone other than the original promoters / directors of Respondent No. 4i.e., M/s Sunstar Overseas Ltd. Section 29A of the Insolvency andBankruptcy Code, 2016 [hereinafter “IBC”] bars the promoters anddirectors of company, which is in CIRP, from participating in itsresolution process, either directly or indirectly.

(x)The Court must look into the question of existence of an ArbitrationAgreement, while entertaining request for reference of disputes toAgreement, while entertaining request for reference of disputes to

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Arbitration. Since the arbitration agreement is shrouded in doubts, theCourt should not refer the parties to arbitration. Reliance in this regardisplaceduponVidyaDroliaandOrs.v.DurgaTradingCorporation.[1]

OBJECTION OF RESPONDENT NO. 2

4.Respondent No. 2’s stand is quite similar to that of the RespondentNo. 1 and therefore, for brevity, the same need not be elaborated. It wouldsuffice to note that Respondent No. 2 does not deny his signatures, butcontends that the signatures were obtained by misrepresenting the documentto be draft agreement which was to be destroyed later and followed by afinal agreement as per agreed terms. He also contends that neither copy ofthe said agreement was provided, nor any opportunity was afforded to gothrough the same, to understand its contents, or to modify the same. TheFacility Agreement is thus void ab initio as it was obtained without freeconsent.

OBJECTION OF RESPONDENT NO. 4

5.Mr. Arun Aggarwal, counsel for Respondent No. 4 makes thefollowing averments: -following averments: -

(i)Respondent No. 1 is neither signatory nor party to the FacilityAgreement and therefore, not bound by any of the terms andconditions contained therein. Under the Companies Act, 2013[hereinafter “Companies Act”], Respondent No. 4, has its ownAgreement and therefore, not bound by any of the terms andconditions contained therein. Under the Companies Act, 2013[hereinafter “Companies Act”], Respondent No. 4, has its own

1 (2021) 2 SCC 1.

separate legal identity, distinct from its promoters, directors, orshareholders.

(ii)At the time of execution of the Facility Agreement, the RespondentNo.4wasunderinsolvencyproceedings,andaResolutionProfessional had been appointed by the NCLT. For execution of theFacility Agreement, Respondent No. 4 was not involved or consultedat any stage.No.4wasunderinsolvencyproceedings,andaResolutionProfessional had been appointed by the NCLT. For execution of theFacility Agreement, Respondent No. 4 was not involved or consultedat any stage.

(iii)On the date of signing of this alleged agreement, the Respondent No.4 was under insolvency resolution process and no person other thanthe Resolution Professional appointed by the NCLT could have signedany agreement on its behalf. The petition as such is not maintainableagainst Respondent No .4.4 was under insolvency resolution process and no person other thanthe Resolution Professional appointed by the NCLT could have signedany agreement on its behalf. The petition as such is not maintainableagainst Respondent No .4.

(iv)No term of the Facility Agreement which are contrary to theResolution Plan approved by NCLT could bind the affairs of thereplying respondent, the answering respondent cannot act contrary tothe Resolution Plan.Resolution Plan approved by NCLT could bind the affairs of thereplying respondent, the answering respondent cannot act contrary tothe Resolution Plan.

(v)To refer non-confirming party to Arbitration, the Court mustconsider whether there are any rights and obligations which arerequired to be adjudicated qua such party. Under the FacilityAgreement, ex-facie no obligations bind Respondent No. 4 andtherefore, it need not be directed to join the Arbitration.consider whether there are any rights and obligations which arerequired to be adjudicated qua such party. Under the FacilityAgreement, ex-facie no obligations bind Respondent No. 4 andtherefore, it need not be directed to join the Arbitration.

CASE OF THE PETITIONER:

6.On the other hand, Mr. Sandeep Sethi and Mr. Jayant Mehta, SeniorCounsels for the Petitioner make the following submissions seekingreference qua all the Respondents: -

(i)On account of Respondent No. 1, being an LLP, the FacilityAgreement would equally bind its partners (viz. Respondents No. 2and 3) as well, notwithstanding the fact that the same is signed byonly one of the partners [viz Respondent No. 2].Agreement would equally bind its partners (viz. Respondents No. 2and 3) as well, notwithstanding the fact that the same is signed byonly one of the partners [viz Respondent No. 2].

(ii)Reliance was placed on Section 26 of the LLP Act, to argue that theabsence of signatures of Respondent No. 3 would not invalidate theAgreement.absence of signatures of Respondent No. 3 would not invalidate theAgreement.

(iii)In any event, all Respondents are necessary and proper parties to theArbitration proceedings. Qua Respondent No. 4, reference is soughtby contending that Respondent No. 4 is an alter ego of RespondentNo. 1 and further having regard to the terms and conditions of theFacility Agreement, referral qua Respondent No. 4 is necessaryhaving regard to the principle enunciated in Ameet Lalchand Shah &Ors. v. Rishabh Enterprises & Anr.[2]and Shapoorji Pallonji & Co.Pvt. Ltd. v. Rattan India Power Ltd. & Anr.[3]Arbitration proceedings. Qua Respondent No. 4, reference is soughtby contending that Respondent No. 4 is an alter ego of RespondentNo. 1 and further having regard to the terms and conditions of theFacility Agreement, referral qua Respondent No. 4 is necessaryhaving regard to the principle enunciated in Ameet Lalchand Shah &Ors. v. Rishabh Enterprises & Anr.[2]and Shapoorji Pallonji & Co.Pvt. Ltd. v. Rattan India Power Ltd. & Anr.[3]

ANALYSIS

7.This Court has considered the submissions of the parties.

8.QuaRespondentsNo.1to3,theanswerissimpleandstraightforward. Respondent No. 1, which an LLP, has signed the FacilityAgreement through its partner Mr. Ajay Yadav. The constitution ofRespondent as limited liability partnership is not in dispute. Mr. AjayYadav also does not deny his signatures or the fact that he is partner of

2 (2018) 15 SCC 678

3 (2021) 281 DLT 246 at Paras 23 to 26.

Respondent No. 1. Thus, the execution of the Facility Agreement, hisauthority being implied, would prima facie bind Respondent No. 1.Respondent No. 1 and 3 cannot wriggle out of the arbitration agreementcontained in the Facility Agreement by merely claiming that her partner Mr.Ajay Yadav has acted without consent or concurrence, particularly when thereceipt of the sum of Rs. l,46,00,00,000/- (Rupees One Hundred and Forty-Six crores Only) by Respondent No. l has not been denied by any of theRespondents.

9.Further, mere absence of signature of Respondent No. 3 cannot renderthe agreement ex-facie invalid, since Respondent No. 1 is limited liabilitypartnership. Reference against her is based on her being partner ofRespondent No. 1 firm, which is not denied. The contention of theRespondents that the LLP’s incorporation documents do not give Mr. AjayYadav the final authority in respect of all major decisions in light of hisshareholding, or that the Facility Agreement was only rough draft; or thatthere is no resolution backing the execution; or that rubber stamp is notgenuine, etc., are aspects that would have to be agitated before the ArbitralTribunal and cannot be examined in the present proceedings having regardto the limited scope of jurisdiction envisaged under Section 11 of the Act.Therefore, the controversy regarding invalidity of the agreement, as raisedby the Respondents can, at the highest, only cast doubt in the mind of theCourt. It is only in rare circumstances, where, the Court is of the opinion thatan agreement is ex-facie invalid or non-est, should the Court declinereferring the parties to the arbitration. This is certainly not such case.Prima facie test regarding the existence of the arbitration agreement is metin the instant case. Thus, in terms of the judgment of the Supreme Court inVidya Drolia (supra), as relied upon by the Petitioner, calls for reference toArbitration.

10.This brings the Court to the question of referring Respondent No. 4who is undoubtedly non-signatory to the Facility Agreement. There is nodispute on the proposition that the scope of an arbitration agreement islimited to the parties who entered into it and that those claiming under orthrough them. However, under exceptional circumstances, non-signatoryor third party can also be subjected to arbitration. Thus, the short question iswhether the Petitioner is able to discharge this heavy onus for seekingreference against Respondent No. 4.

11.The law in this respect is no longer res integra. Mr. Sethi has taken thecourt through the judgment in Shapoorji Pallonji (supra), which captures allthe theories in this respect. According to him, the theories of the non-signatory being the ‘subject matter’, ‘beneficiary’ and ‘alter ego’ of theparties to the agreement – are applicable in the instant case. The court nowproceeds to examine if there is indeed any prima facie merit in thisargument.

12.Here, it must be first noted that affairs of Respondent No. 4 company,are being managed as per the provisions envisaged under the ResolutionPlan, filed by Respondent No. 1. Further, Respondents No. 2 and 3 are thedirectors as well as shareholders of Respondent No. 1. The corporate

structure of Respondent No. 4 demonstrates that, if the corporate veil ispierced, it is indeed an alter ego of Respondent No. 1.

13.Next, the facility extended by the Petitioner was for the direct benefitof Respondent No. 4, which was in CIRP. The payment made by thePetitioner was utilised for discharging liabilities of Respondent No. 4. Butfor the payment so made, the resolution plan would not have beenimplemented, which could perhaps have resulted in the winding up ofRespondent No. 4. Thus, undisputedly, Respondent No. 4 is directbeneficiary of the facility extended by the Petitioner to Respondent No. 1.

14.That apart, in lieu of extending the Facility Amount to RespondentNos. 1 to 3, certain assets as identified in the Facility Agreement, wereagreed to be dealt with, as provided for in Facility Agreement. On thisaspect, the Petitioner has drawn the attention of this Court to the terms andconditions of the Facility Agreement, and in particular clauses 3 and 4,which read as under:-

“3.4.The Requesting Parties represent, warrant, agree and undertake that theywill and shall take all necessary measures to ensure that they may able to transferall the Sunstar Securities to Shivakriti and/ or their nominee on or before theSunstar Securities Transfer Date, including without limitation, the following:(i)The Requesting Parties agree and undertake that Umaiza shall subscribe toand be the absolute and sole owner of all the Sunstar Securities at all times till theAgreed Date; or till the repayment of the entire Agreed Amounts, along withinterest; or the existence of the Purchase Right by Shivakriti and the consequenttransfer of all the Sunstar Securities to Shivakriti and/or their nominee – whicheveris later.

(ii)The Requesting Parties shall not sell or transfer in any manner whatsoever,any of the Sunstar Securities or any part thereof or any right, title or interest therein,without the prior written consent of Shivakriti;

(iii)The Requesting Parties shall not appoint/change the directors/Managementin Sunstar without the prior written consent of Shivakriti; and

(iv)The Requesting Parties shall not create any encumbrance, in any mannerwhatsoever, over any of the Sunstar Securities, or any part thereof or any right, title

or interest therein, without the prior written consent of Shivakriti. Without prejudiceto the foregoing any such encumbrance shall be subject to and clearly recognizeShivakriti’s Purchase Right.

4.1.Each of the Requesting Parties hereby represent and warrant, andcovenants and undertake that:

(vi)within 30 days from the Effective Date, they will procure and ensure that allsecurity interest and other encumbrances over any and all of the assets of Sunstarare released in full other than charge created over any and all of the assets in favorof Kalpatru and first charge on all the assets of Sunstar (second charge in the caseof assets over which Kalpatru has first charge) will be extended to Shivakriti and aconfirmation to this effect authorized by the Board of Directors of Sunstar and eachof the Requesting Parties is handed over to Shivakriti.

(vii)within 30 days form the Effective Date, they will procure and ensure that allthe security interest and other encumbrances over any and all the shares,debentures, bonds and such other securities (including the Specified Securities)issued by Sunstar to Umaiza are pledged with Shivakriti as security for loan ofavailed by Umaiza – and confirmation to this effect authorized by the Board ofDirectors of Sunstar and each of the Requesting Parties is handed over to Shivakriti.4.2.Each of the Requesting Parties hereby covenant and undertake that, untilsuch time Shivakriti NOC is issued to the Requesting Parties:

(iii)they will execute any definite agreement (as envisaged in the ResolutionPlan with Sunstar and any other stakeholders), without in any manner diluting anyof the rights available to Shivakriti hereunder, and only with prior consent ofShivakriti (which consent will not in any manner dilute the obligations of RequestingParties hereunder).

(iv)they will ensure that no security interest and other encumbrances over anyof the assets of Sunstar are created except as mentioned in Article 4.1(vi) and nosecurity interest and other encumbrances over any of the shares, debentures, bondsand other securities (including Specified Securities) are created in any manner.

(v)They will procure Sunstar to ensure and comply with each and all of theabove covenants and undertakings.”

15.These clearly indicate that obligations under this Agreement alsopertain to Respondent No. 4 and to the operation of its business andcontractual commitments. The terms of the Facility Agreement, the conductof the parties, the background leading to execution of the FacilityAgreement – all spell out the true intention of the parties, i.e., the successfulimplementation of the resolution plan which resulted in Respondent No. 1acquiring Respondent No. 4. Undoubtedly, the performance of FacilityAgreement is intrinsically interlinked with the assets of Respondent No. 4and may not be feasible without its direct involvement. Pertinently, any

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order/ proceedings relating to the execution of the Facility Agreement wouldsurely and directly impact Respondent No. 4, and therefore the adjudicationof any disputes arising thereunder would necessarily require its presence.

16.This Court is also guided by the ‘group of companies doctrine’ asexpounded in the case of MTNL v. Canara Bank,[4]where the groupcompany of Canara Bank, being non-signatory to the arbitrationagreement, was also referred to arbitration after considering the compositenature of transaction, the commonality of subject matter, and the fact thatfinal resolution of the disputes would not be feasible without joining of such

party. It goes on to say that:

“The Group of Companies Doctrine has also been invoked in cases where there is atight group structure with strong organizational and financial links, so as toconstitute single economic unit, or single economic reality. In such situation,signatory and non-signatories have been bound together under the arbitrationagreement. This will apply in particular when the funds of one company are used tofinancially support or re-structure other members of the group.”

17.In view of the foregoing, although Respondent No. 4 is non-signatory to the Facility Agreement, yet, having regard to: (a) RespondentNo. 4 being an alter ego of Respondents No. 1 to 3; (b) the fact that thesubject matter of the Facility Agreement pertains to Respondent No. 4; (c)there is direct commonality of the subject matter viz the assets ofRespondent No. 4; and (d) composite nature of the transaction between theparties which is inter-linked in nature and the performance thereof, thereference of disputes would not be feasible without the aid of RespondentNo. 4, and thus, the Court is of the opinion that reference should be acomposite one qua all the Respondents.

18.Before proceeding further, it is clarified that the observations madehereinabove are only for the purpose of referring Respondent No. 4 toarbitration. Whether Respondent No. 4 has any liability arising out of thisagreement has neither been considered nor commented upon, and the same,if any has to be adjudicated in the arbitration proceedings.

19.In view of the above, there is no impediment for this Court to allowthe petition qua all the Respondents, and accordingly, the same is allowed.

20.Accordingly, Hon’ble Mr. Justice D. K. Jain (Retd.), (former Judge ofSupreme Court) (Contact No.: [REDACTED]) is appointed as SoleArbitrator to adjudicate the disputes that have arisen between the partiesunder the Facility Agreement dated 30[th]September, 2019.

21.The parties are directed to appear before the learned Arbitrator as andwhen notified. This is subject to the Arbitrator making the necessarydisclosure under Section 12(1) of the Act and not being ineligible underSection 12(5) of the Act.

22.The learned Arbitrator will be paid his fees in terms of the ScheduleIV of the Act.

23.Needless to say, the Respondent shall be at liberty to raise allobjections as per law, including the plea of non-existence of arbitration

4 2020 12 SCC 767.

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agreement qua them, before the learned Arbitrator. Furthermore, it isclarified that the observations made in the present order are only for thepurpose of deciding the present petition and they shall not come in the wayof the learned Arbitrator to independently adjudicate upon the objectionsraised by the Respondents.

24.The petition is allowed in the above terms.

SANJEEV NARULA, J

DECEMBER 9, 2021dss

(corrected and released on 21[st]December, 2021)