M/s Univabs Solution Pvt Ltd v. Vaibhav Chandrakar

: Mr. Vivek Chopda, Advocate. For Respondent : Mr. Shalvik Tiwari, Advocate. Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board

25.11.2025

1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”) for appointment of an arbitrator.

2. The fact, in brief, as projected by the applicant is that the applicant 2 company, incorporated under the Companies Act engaged in providing services of Indian certified radiologists, appointed the respondent as a Junior Estimator on 18.06.2020, whose employment was extended until 03.09.2024 under terms that included strict confidentiality and non-compete obligations. During his employment, the respondent received specialized training and access to confidential and proprietary business information. However, the respondent resigned on 03.09.2024 without assigning any reason and, in clear violation of Clause 3.3 and Clause 6 of the employment agreement, joined M/s P2C Construction Services, a direct competitor of the applicant, thereby breaching the restrictive covenants and causing financial loss of approximately Rs. 4,00,000/-. Despite issuance of a legal notice on 05.04.2025, the respondent failed to adequately address the allegations or comply with the contractual requirements. As the agreement contains an arbitration clause (Clause 8), and since the respondent has not cooperated in the appointment of an arbitrator, the applicant, having already nominated Hon’ble Justice (Retd.) Shri G. Minhajuddin as the sole arbitrator, has been compelled to approach this Hon’ble Court for appointment of an arbitrator.

3. Mr. Vivek Chopda, learned counsel for the applicant submits that the respondent was appointed on 18.06.2020 as a Junior Estimator, initially for 24 months and later extended until 03.09.2024, under an appointment letter and an employment agreement that contained 3 detailed terms, including confidentiality obligations and restrictive covenants under Clauses 7(c), 8, 6(a), and 3.3, prohibiting the respondent from soliciting company clients or employees, disclosing confidential information, or engaging in competing business for 12 months after termination. During his employment, the respondent received extensive training and was entrusted with trade secrets and proprietary information. However, on 03.09.2024, he abruptly resigned via email without assigning any reason and, in blatant breach of the agreement, joined M/s P2C Construction Services, a direct competitor of the applicant, thereby causing financial loss amounting to Rs. 4,00,000/-. Despite issuance of a legal notice dated 05.04.2025, and his reply dated 18.04.2025, the respondent failed to address the core allegation of working with a competing entity or settle the outstanding contractual liabilities, rendering him liable for liquidated damages, training costs, and loss of productivity. As the agreement contains a binding arbitration clause (Clause 8), and since the respondent has neither cooperated nor agreed to the arbitrator’s nomination despite the lapse of more than 15 days. In terms of the said clause, the applicant nominated Hon’ble Justice (Retd.) Shri G. Minhajuddin as arbitrator, but the respondent has failed to respond or cooperate.

4. Mr. Shalvik Tiwari, learned counsel for the respondent submits that the present application filed by the applicant is misconceived, legally untenable, and based on incorrect and self-serving allegations. It is denied that the respondent has breached any terms 4 of the appointment letter dated 18.06.2020 or the employment agreement executed between the parties, or that he has disclosed confidential information or caused any loss to the applicant. The respondent submits that he served the applicant diligently as a Junior Quantity Estimator until his resignation on 03.09.2024, which was tendered lawfully and without any contractual violation, and not due to any misconduct as alleged. The respondent further submits that the restrictive covenants relied upon by the applicant including Clauses 6(a), 7(c), 8, and 3.3 are unreasonable, arbitrary, and unenforceable under Indian law, particularly when applied post- employment, as they operate as a restraint of trade prohibited under Section 27 of the Indian Contract Act, 1872. The allegations of joining a competitor, causing losses of Rs. 4,00,000/-, or disclosing confidential information are emphatically denied as being baseless, unsupported by evidence, and concocted merely to pressurize the respondent. The respondent received the legal notice dated

05.04.2025 and duly replied on 18.04.2025 denying all false allegations the applicant’s dissatisfaction with the reply cannot give rise to any cause of action. It is submitted that the applicant has unilaterally nominated an arbitrator in violation of the principles of natural justice and in disregard of the settled law that any arbitration clause providing the employer exclusive power to appoint the sole arbitrator is invalid and unenforceable. The respondent submits that no genuine dispute exists requiring arbitration, and that the present application has been filed only to harass him after cessation of 5 employment. Therefore, the respondent prays that the application be dismissed with exemplary costs.

5. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto.

6. A query was put to learned counsel appearing for the parties as to whether they are agreeable for a common name who can be appointed as Arbitrator, learned counsel for the parties submitted that they would have no objection if any retired Judge of District Court is appointed as the Sole Arbitrator. They further submit that Mr. N.D. Tigala, who is a retired District Judge may be appointed as Arbitrator.

7. In view of the above consensus between the learned counsel for the parties. Mr. N.D.Tigala, a retired Judge of District Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties.

8. The Registry is directed to communicate this order to Mr. N.D.Tigala in the proper address.

9. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties.

10. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE vaibhav