- 1 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ CIVIL MISC. PETITION NO. 233 OF 2025 BETWEEN: 1. M/S JOHNSON LIFTS PRIVATE LIMITED HEAD OFFICE IS AT NO.1. EAST MAIN ROAD ANNA NAGAR WESTERN EXTENSION CHENNAI-600101. REPRESENTED BY ITS ASSISTANT GENERAL MANAGER - LEGAL SRI ROSE BLESSED KING BRANCH OFFICE IS AT NO. 40, 5TH MAIN ROAD K.S.S.I.D.C INDUSTRIAL ESTATE 6TH BLOCK, RAJAJI NAGAR BANGALORE-560010 REPRESENTED BY ITS ASSISTANT GENERAL MANAGER SRI ROSE BLESSED KING …PETITIONER (BY SRI. VENKATESH S ARBATTI., ADVOCATE) AND: 1. M/S OZONE URBANA INFRA DEVELOPERS PRIVATE LIMITED HAVING ITS OFFICE AT NO.38 ULSOOR ROAD, YELLAPPA GARDEN YELLAPPA CHETTY LAYOUT SIVANCHETTI GARDENS BANGALORE - 560 042 REP. BY ITS DIRECTOR MR S VASUDEVAN SATHYAMOORTHY. 2. MR VASUDEVAN SATHYAMOORTHY DIRECTOR OF M/S. OZONE URBANA INFRA DEVELOPERS PRIVATE LIMITED RESIDING AT NO.32, NORRIS ROAD Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 RICHMOND TOWN, BANGALORE – 5600025. …RESPONDENTS (BY SMT. TEJASWINI U, ADVCOATE FOR R1 & R2) THIS CMP IS FILED UNDER SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT, 1996, PRAYING TO A. APPOINT A SOLE ARBITRATOR IN TERMS OF SECTION 11(5) OF THE ARBITRATION AND CONCILIATION ACT 1996 TO ADJUDICATE THE DISPUTE THAT HAS ARISEN BETWEEN THE PARTIES, AS PROVIDED IN CLAUSE 15 OF THE WORK ORDER/ CONTRACT DATED 07.08.2018 AS PER ANNEXURE B AND ETC. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ ORAL ORDER 1. The Petitioner is before this Court seeking for the following reliefs; “a. appoint a sole arbitrator in terms of section 11(5) of the arbitration and conciliation act 1996 to adjudicate the dispute that has arisen between the parties, as provided in clause 15 of the work order/ contract dated 07.08.2018 as per annexure b. b. Award the costs of the Petition; and c. Pass any other appropriate order that this Hon’ble Court deems it fit and necessary in the fact and circumstances of the case, in the interest of justice and equity.” - 3 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 2. Respondent No.1 had issued a contract/workorder on 07.08.2018 on Petitioner for supply, installation, testing and commissioning of lifts. The said contract/work order is governed by an Arbitration Clause in terms of Clause 15 thereon, which is reproduced hereunder for easy reference: “15. Arbitration & Jurisdiction: If any dispute, controversy or claim between the parties arises out of or in connection with this Contract, including its existence, breach, termination or validity thereof, the parties shall use all reasonable endeavors to negotiate with a view to resolve the dispute amicably. If the dispute has not been settled pursuant to the said negotiations even after 15 days, either of the parties can give the other party a notice stating that a dispute has been arisen. If the parties are unable to resolve the dispute amicably within 15 days of service of the said notice (or such longer period as the parties may mutually agree), then the dispute shall be finally resolved by arbitration as per the provisions of Arbitration and Conciliation Act, 1996 by a sole arbitrator to be appointed by Johnson from the panel of arbitrators maintained by Johnson. Such panelists shall be persons who is holding or has held the positions of not less than a District Judge or High Court Advocate or a professional arbitrator. Any such arbitration award passed by the said arbitrator shall be final and binding on both the parties. The seat of the arbitration shall be Bangalore and the language of the arbitration shall be English.” - 4 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 3. There being certain disputes between the petitioner and Respondent No.1 as regards the payments due, certain correspondence was exchanged. Thereafter, the Petitioner had invoked the Arbitration Clause and issued a notice on 19.06.2023. The said notice though delivered to the respondent No.1, he chose not to reply, but however certain discussions took place, and a memorandum of understanding came to be entered into on 18.12.2023, whereunder Respondent No.1 had agreed to make payment of certain monies in the time bound schedule as indicated therein. The said payment not having been made as per the said schedule, the Petitioner once again invoked the Arbitration Clause and issued a notice on 13.11.2024, nominating its Arbitrator and seeking consent of the appointment of the Arbitrator. A reminder was also issued on 26.11.2024 which was also served, no response was received from - 5 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 Respondent No.1. In that background, the Petitioner is before this Court seeking for the aforesaid reliefs. 4. Notice having been issued, the Respondents having been served entered appearance through their counsel. 5. The submission of the learned counsel for the Respondents firstly is that Respondent No.2 is not a party to the contract and as such, no Arbitrator could be appointed insofar as Respondent No.2 is concerned. 6. Her submission is that the Arbitration Clause is a unilateral clause and does not conform to the requirement of equal treatment of parties under Section 18 of the Arbitration and Conciliation Act, 1996. The right to appoint an Arbitrator is solely vested with the Petitioner and the Petitioner exercised his right to appoint so. There is no party autonomy in respect to the said Arbitration Clause, the entire Arbitration Clause is tilted - 6 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 towards the petitioner and as such, the same is not enforceable. In this regard, she relies upon the decision in the case of South Delhi Municipal Corporation of Delhi V. SMS Limited1, and Perkins Eastman Architects DPC and Ors. V. HSCC (India) Ltd.2, relying on all the above judgments, she submits that there must be impartiality in the arbitral proceedings, equality being the concomitant principle of arbitration, equal treatment of parties is required to be established by both having a right to consent to an appointment of an Arbitrator. If the Clause permits one of the parties to appoint an Arbitrator unilaterally, the same would violate all those requirements. In the present case, the Clause permitting the Petitioner to appoint an Arbitrator violates the principles of equal treatment of party and in terms of the aforesaid decisions, she submits that the Arbitration Clause 1 2025 INSC 693 2 MANU/SC/1628/2019 - 7 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 is not enforceable, and as such, the petition is required to be dismissed. 7. In rejoinder, learned counsel for the Petitioner submits that one of the Director has signed the memorandum of understanding and as such is required to be made a party. 8. Heard Sri.Venkatesh S. Arabatti, learned counsel for the Petitioner, Smt. Tejaswini U., learned counsel for Respondent Nos . 1 and 2 and perused papers. 9. As regards parties to the agreement, the contract was issued by the Petitioner to the Respondents, which is accepted by the Respondents. Respondent No.2, who is said to be Director of Respondent No.1, is neither the signatory nor a party to the said contract which has been issued by the Petitioner. A memorandum of understanding which is settlement agreement is signed by the Director of Respondent No.1, Mr. Sai Prakash and not by Respondent No.2- Mr.Vasudevan Sathyamoorthy. Thus, respondent - 8 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 No.2 is not a signatory neither to the contract/workorder or the memorandum of understanding. 10. In that view of the matter, a person who is not a party to an arbitration agreement cannot be made subject to an arbitral proceeding. As such, the proceeding insofar as Respondent No.2 is concerned is required to be dismissed. 11. Insofar as the contention as regards party autonomy and equality of the party, though a reading of the Arbitration Clause indicates that it is the Petitioner, who would have a right to appoint a sole arbitrator from the panel of the arbitrators maintained by the Petitioner, it is not a right which the Petitioner has exercised while issuing a notice. The Petitioner while nominating an Arbitrator has sought for consent for the appointment of an arbitrator from the Respondent No.1. Obviously, Respondent No.1 has not consented, and it is for that reason that the - 9 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 Petitioner is before this Court seeking for the appointment of an independent Arbitrator. 12. The arguments on the part of the learned counsel for the Respondents would have been acceptable, if the Arbitrator had been appointed by the Petitioner and the Arbitrator had proceeded with the matter, without the consent of the Respondent No.1 thereby violating the principles of party autonomy and equality of parties in terms of Section 18 of the Arbitration and Conciliation Act, 1996. 13. In the present case, what the Petitioner has done despite the Arbitration Clause, is to nominate an Arbitrator and seek for consent of such appointment from Respondent No.1 thereby providing an opportunity to Respondent No.1 to consent or to defer and as such, the principles of party autonomy has been adhered to by the Petitioner, in fact, the Petitioner having approached this Court for appointment of an Arbitrator on account of the - 10 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 Respondent No.1 not agreeing for the nomination made would also reinforce the said position. 14. 14. In that view of the matter, I am of the considered opinion that the decisions which have been relied upon by the learned counsel for the respondents would not be attracted in the present situation. 15. In that background, I am of the considered opinion that an Arbitrator would be required to be appointed to arbitrate the dispute between the Petitioner and Respondent No.1 excluding Respondent No.2. As such, I pass the following: ORDER i. CMP is partly allowed. ii. CMP insofar as Respondent No.2 is concerned, is dismissed. iii. Sri S.G. Hiremath, a former Senior Civil Judge of the District Judiciary, State of Karnataka is appointed as a sole arbitrator to arbitrate the dispute between the Petitioner and Respondent No.1 under the aegis of the Arbitration Centre attached to this Court. - 11 - HC-KAR NC: 2025:KHC:46844 CMP No. 233 of 2025 iv. Registry is directed to forward a copy of this order to the Director, Arbitration & Conciliation Centre for doing the needful. v. Since the order is passed in the presence of both the counsels, the counsels are directed to appear before the Director, Arbitration & Conciliation Centre without requirement of any notice at 2.30 p.m. on 12.12.2025. vi. All contentions are left open. vii. Registry is directed to return the original and/or certified copies, if produced, to the respective parties who have produced it/them by following due procedure. SD/- (SURAJ GOVINDARAJ) JUDGE KTY/List No.: 1 Sl No.: 41