The agreement contains a specific clause—Clause 19—pertaining to dispute resolution. It outlines that any disputes arising from the agreement, including those concerning its existence, validity, or termination, should initially be addressed through mutual discussion at the company's corporate office. If discussions fail, the disputes are to be referred for arbitration, to be conducted exclusively in Delhi under the provisions of the 1996 Act. The clause further specifies that a sole arbitrator appointed by the company will adjudicate the matter, and their decision will be final and binding.

On January 6, 2023, the petitioner issued a notice to the respondent under Section 21 of the 1996 Act, requesting the reference of disputes to arbitration. The respondent countered on January 24, 2023, denying the existence of any arbitral disputes and rejecting the petitioner’s request. This lack of consensus prompted the petitioner to file the current petition.

During the proceedings, the respondent’s counsel contended that no arbitrable dispute existed, emphasizing that the petitioner had not raised any claims but instead disputed the legitimacy of the respondent’s claims against them. Conversely, the petitioner’s counsel argued that the Section 21 notice clearly indicated the existence of disputes, including grievances against the respondent for engaging third parties in coercive actions.

The court noted that the term “dispute” encompasses a wide range of issues, and it would not be appropriate to definitively state that no disputes existed based solely on the absence of a monetary claim. Furthermore, following the Supreme Court’s judgment in SBI General Insurance Co Ltd v. Krish Spinning (2024), it became evident that the court’s role under Section 11(6) is limited to determining whether an arbitration agreement exists and whether the petition was filed within the stipulated timeframe.

Both conditions were found to be satisfied in this case.

Given the parties’ inability to reach an agreement regarding arbitration, the court stepped in to facilitate the process. The dispute was referred to the Delhi International Arbitration Centre (DIAC) for resolution. The arbitration is to proceed under the DIAC’s rules, with the arbitrator entitled to charge fees as per the DIAC's schedule.

Moreover, the arbitrator is required to file a necessary disclosure under Section 12(2) of the 1996 Act within a week of taking up the reference. All matters of fact and law, including the existence and arbitrability of any disputes, have been left to the arbitrator's discretion.

Interestingly, the facts of this case mirrored another ongoing arbitration petition, leading to a directive for the DIAC to appoint a common arbitrator for both matters. The respondent retains the right to raise counterclaims in accordance with the law. Ultimately, the petitions have been disposed of in accordance with the outlined terms, marking a significant step toward resolving the disputes through arbitration.