Laly Joseph v. Chazhikattu Hospitals Pvt. Ltd.

Arbitration and Conciliation Act, 1996 – Section 11 – Arbitration Request – Appointment of Arbitrator – Validity of Arbitration Agreement – Non-Signatory Party – Investment Agreement dated 27.10.2024 – Automatic Termination Clause – Non-Payment of Advance Consideration – Dispute Resolution – Competence-Competence Doctrine – Notice under Section 11 (5) and Section 21.

Arbitration and Conciliation Act, 1996 – Section 9 and 11 (6) – Findings entered by a court while dealing with a Section 9 application are prima facie in nature and not binding on the Section 11(6) court or the Arbitrator.

2025 KER 44852 : 2025 (6) KLR 241 : 2025 KLT OnLine 2171
M.A. Abdul Hakhim, J.
AR No. 15 of 2025; 24.06.2025

Held:

1. The question of whether the Investment Agreement dated 27.10.2024, containing an arbitration clause, was automatically terminated due to non-payment of advance consideration (Rs. 30 Crores) is a disputed factual issue to be adjudicated by the Arbitrator, not the referral court under Section 11(6). The arbitration clause survives termination for disputes covered by the agreement, including termination issues, as per the separability presumption and competence-competence doctrine.

2. The 4th respondent, not a signatory to the Investment Agreement and not served with notice under Section 11(5) or Section 21, is not a veritable or necessary party to the arbitration proceedings. The complexity of determining whether a non-signatory is bound by the arbitration agreement is to be resolved by the Arbitral Tribunal, not the referral court.

3. Arbitration Request allowed for disputes between the applicant and respondents 1 to 3. Mr. Justice N.K. Balakrishnan appointed as sole Arbitrator to resolve disputes arising from the Investment Agreement, with all issues, including jurisdiction and limitation, left open for adjudication.

Cases Cited:

• In Re: Interplay Between Arbitration Agreements and Stamp Act, 1899 [(2024) 6 SCC 1]

• Cox and Kings Ltd. v. Sap India Pvt. Ltd. [(2024) 4 SCC 1; (2025) 1 SCC 611]

• Ajay Madhusudan Patel v. Jyotrindra S. Patel [(2025) 2 SCC 147]

• Shreegopal Barasia v. Creative Homes [2025 SCC OnLine Bom 42]

• Devtree Corp. LLP v. Bhumika North Gardenia [MANU/KA/3008/2024]

• Basant Kumar Khemka v. City Shoppe Estates Ltd. [MANU/WB/1596/2024]

• Nirmala Jain v. Jasbir Singh [MANU/DE/3381/2018]

• Arif Azim Co. Ltd. v. Aptech Ltd. [(2024) 5 SCC 313]

• SBI General Insurance Co. Ltd. v. Krish Spinning [(2024) SCC OnLine SC 1754]

• Kotak Mahindra Prime Ltd. v. Manav Sethi [(2024) SCC OnLine Del 4819]

• Radha Madhavi G. v. Indian Oil Corporation Ltd. [2018 KHC 2495]

ADVOCATES

K/128/1982 CHANDY JOSEPH P. 9846004823	K/245/2004 ROSHEN D ALEXANDER 9447083069	K/278/2018 ANIL SEBASTIAN PULICKEL 9632745160	K/590/2005 THOMAS J ANAKKALLUNKAL 9495316474	K/532/2004 TINA ALEX THOMAS 9447213385
K/427/2007 ANUPA ANNA JOSE KANDOTH 9497774645	K/327/2018 HARIMOHAN 9746794703	K/3502/2022 KOCHURANI JAMES 9446355912	K/1244/2019 JAYARAMAN S 9995070655	K/239/2024 DHANYA SUNNY 9074538352
K/1434/2019 MERINE TOM 9886870195	K/1376/1995 SANTHOSH MATHEW 9846057431	K/844/2007 ARUN THOMAS 9846563886	K/838/2016 VEENA RAVEENDRAN 9061985450	K/1293/2016 KARTHIKA MARIA 7591925501
K/977/2018 SHINTO MATHEW ABRAHAM 8943187245	K/2325/2019 LEAH RACHEL NINAN 4842306755	K/936/2019 MATHEW NEVIN THOMAS 8884882415	K/1450/2019 KARTHIK RAJAGOPAL 9566211751	K/1812/2020 KURIAN ANTONY MATHEW 7902950669
K/3294/2022 APARNNA S 7591987511	K/2687/2024 NOEL NINAN NINAN 9847497639	K/3678/2024 ADEEN NAZAR 8137943319