REGENTA HOTELS PRIVATE LIMITED v. M/s SHIV SUNDAR AND COMPANY

A PARTNERSHIP FIRM, HAVING ITS REGISTERED OFFICE AT 58, ROYAL BUNGALOW CITY, SUKHLIYA MR-10 INDORE- 452 010. REP BY ITS MANAGING DIRECTOR, MR. DINESH VERMA.

2. MR. DINESH VERMA, MANAGING PARTNER, SHIV SUNDAR and COMPANY, HAVING ITS REGISTERED OFFICE AT 58, ROYAL BUNGALOW CITY, SUKHLIYA MR-10 INDORE- 452 010. (R1 & R2 - SERVED) …RESPONDENTS - 2 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR THIS CIVIL MISC. PETITION IS FILED UNDER SEC.11(6) OF ARBITRATION AND CONCILIATION ACT., PRAYING THAT THIS HONBLE COURT BE PLEASED TO APPOINT, A SOLE ARBITRATOR AS THIS HON'BLE COURT MAY DEEM FIT, AND REFER THE DISPUTES THAT HAVE ARISEN BETWEEN THE PARTIES IN RELATION TO ARTICLE 19 OF THE FRANCHISE AGREEMENT DATED 16.11.2016 (ANNEXURE - B) TO ARBITRATION. THIS PETITION, COMING ON FOR REPORTING SETTLEMENT, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE ASHOK S.KINAGI ORAL ORDER This Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator to resolve the arbitral dispute between the parties to the petition in terms of Article 19 of Franchise Agreement dated 16.11.2016 vide Annexure-B as per the provisions of the Arbitration and Conciliation Act, 1996.

2. Brief facts, leading (rise to the) filing of this petition are as follows; (a) The petitioner is engaged in the business of managing and operating hotels. Respondent No.1 is the owner of 52 Keys Hotel premises located at Plot No.9 and 10, Omaxe City-2, Mangliya of Indore, and was interested in running a hotel with the brand name "Regent Central by Royal Orchid - 3 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR Hotels". In furtherance of the same, respondent No.1 approached the petitioner seeking to use the trademarks and systems for hotels. The parties entered into a License Agreement dated 16.11.2016 to develop and manage the respondent-hotels under the petitioner's trademark and brand name "Regenta Hotels." The terms of agreement were originally for a period of 10 years. On 23.11.2024, respondent No.1 illegally terminated the tenancy with effect from 01.01.2025 by issuing a notice. The termination letter is contrary to the terms of the agreement. Since, the respondent threatened to close down the hotels operation, a dispute arose between the parties to the petition. (b) Article 19 of the agreement stipulates that any disputes arising out of or relating to the agreement are referred to arbitration conducted by the sole arbitrator in accordance with the provisions of the Arbitration and Conciliation Act,

1996. (c) The petitioner filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 in A.A. No.76/2024 on the file of the Principal City Civil and Sessions Judge, Bangalore. The Trial Court granted an order of exparte - 4 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR temporary injunction vide Annexure -E. Thereafter, the petitioner invoked an arbitration clause by issuing an arbitration notice under Section 21 of the Arbitration and Conciliation Act, 1996 on 02.01.2025, vide Annexure-F, proposing the name of the arbitrator. The respondents replied to the arbitration notice vide reply dated 03.02.2025, as per Annexure-G, wherein they did not agree to the name of the arbitrator proposed by the petitioner, and contended that a suitable arbitrator be appointed. The respondents did not come forward to appoint an arbitrator. Hence, this petition.

3. A notice was issued to the respondents. Despite service of a notice, the respondents remained unrepresented.

4. Heard the arguments of learned counsel for the petitioner.

5. Learned counsel for the petitioner submits that the arbitral dispute arises between the parties to the petition, and further submit that the respondents had replied to the arbitration notice admitting the arbitration clause, and also proposing to appoint any other arbitrator. Hence, he prays to allow the petition. - 5 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR

6. Perused records considered submissions of learned counsel for the petitioner.

7. The point, that arises for consideration, is as follows; i) Whether the petitioner has made out a ground to refer the dispute between the parties in terms of Article 19 of the Licence Agreement dated 16.11.2016 the provisions of arbitrator as per Arbitration and Conciliation Act, 1996 and Rules?".

8. There is no dispute regarding to the execution of a Licence Agreement dated 16.11.2016 between the parties to the petition. The dispute arose between the petitioner and respondents when the respondents terminated the Licence Agreement with effect from 01.01.2025. The petitioner contended that termination is illegal. The petitioner filed an application under Section 9 of Arbitration and Conciliation Act, 1996 in A.A.No.76/2024, and sought an order of temporary injunction, restraining the respondents from taking any further action pursuant to the purported letter of termination dated

23.11.2024. The Trial Court granted an order of exparte temporary injunction, and restrained the respondents from taking any further action pursuant to the letter of termination - 6 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR dated 23.11.2024. Thereafter, the petitioner invoked an arbitration clause by issuing an arbitration notice on

02.01.2025 vide Annexure-F.

9. There is an arbitration clause provided in the Licence Agreement dated 16.11.2016 which reads as under; "19. Dispute Resolution.

19.1 Except as otherwise specified Agreement any dispute, controversy, or claim arising out of or relating to this Agreement or any other agreement between Licensor and Licensee or the making, breach, termination, or invalidity in a single thereof, shall be arbitration proceeding conducted by a single arbitrator under the Rules of Indian Arbitration and Conciliation Act, 1996 as are in force on the date when a notice of arbitration is received. " finally settled

10. From the perusal of clause 19 in the agreement dated 16.11.2016, it is evident that, any dispute, controversy or claim relating to the agreement, it should be settle in a arbitration proceedings conducted by a single arbitrator. Admittedly, the petitioner has proposed the name of the learned advocate as an arbitrator by issuing a notice dated

02.01.2025 vide Annexure -F. The respondents replied to the arbitration notice vide reply dated 03.02.2025, vide Annexure - G wherein the respondents objected to the nomination of the - 7 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR learned advocate as an arbitrator, and it is stated that the appointment of an arbitrator should be mutually agreed upon by both the parties to ensure fairness, transparency and impartiality. From the perusal of the reply notice, it is evident that the respondent has admitted the arbitration clause, and also stated that the arbitrator to be appointed mutually by both the parties. As the arbitral dispute arose between the parties to the petition, the arbitral dispute must be resolved through an arbitration. There exists an arbitration clause. Hence, the petitioner has made out the ground to refer the arbitral dispute to the arbitrator.

11. Accordingly, I answer the point for consideration in the affirmative. Accordingly, I proceed to pass the following; ORDER (i) The Civil Miscellaneous Petition is allowed. (ii) Sri. Rajmohan Srivatsava, Retired District Judge, is nominated as an Arbitrator to resolve the dispute between the parties to the petition in terms of Article 19 of the License Agreement dated 16.11.2016 as per the - 8 - NC: 2025:KHC:27161 CMP No. 117 of 2025 HC-KAR provisions of Arbitration and Conciliation Act, 1996 and the Rules. (iii) Registry is directed to communicate this order to the learned Arbitrator, and the Arbitration and Conciliation Center, Bengaluru. (iv) Pending applications, if any, stand disposed off. Sd/- (ASHOK S.KINAGI) JUDGE RU List No.: 1 Sl No.: 27