The Delhi High Court, in a decision delivered by Justice Manoj Kumar Ohri, established that in situations where there exist analogous arbitration proceedings pertaining to other agreements, there is no requirement to commence fresh arbitration by issuing a notice under Section 21 of the Arbitration Act. Additionally, the court emphasized that under Section 11(6) of the Arbitration and Conciliation Act, 1996, there is no mandate for issuing a notice in such circumstances.

The case revolved around disputes stemming from the franchise agreements between the petitioner and the respondent. The petitioner contended that an initial Master Franchise Agreement had appointed them as the 'Master Franchisee' for the franchise business within the territories of Punjab (including Chandigarh Tri-city), Gujarat, and Maharashtra.

Following the execution of the initial Master Franchise Agreement, the parties entered into 14 additional Franchise Agreements to regulate the operation of outlets. However, disputes later emerged between them. In response, the petitioner approached the Delhi High Court and filed a petition under Section 11(6) of the Arbitration & Conciliation Act ("Arbitration Act"), seeking the appointment of a Sole Arbitrator.

Nevertheless, the Respondent contested the petition, raising an objection to its maintainability. The crux of their argument rested on the absence of a prerequisite notice under Section 21 of the Arbitration Act, which they contended was necessary to initiate arbitration proceedings.

Importantly, it was noted that disputes stemming from the Master Franchise Agreement had already been referred to an Arbitral Tribunal, which had subsequently issued an award. Furthermore, disputes concerning 12 out of the 14 Franchise Agreements had also been referred to the arbitral tribunal, with proceedings still pending at the time.

The primary issue before the High Court centered on whether the petitioner was obligated to initiate arbitration anew by serving a notice under Section 21 of the Arbitration Act before filing the petition under Section 11(6). In addressing this issue, the court referenced the decision in Zion Promoters and Developers Pvt. Ltd. v. Ferrous Infrastructure Pvt. Ltd. [ARB. P. 391/2015], which underscored the difference between Sections 11(5) and 11(6) of the Arbitration Act.

The court underscored that Section 11(6) grants authority to a "party" to seek the court's intervention for the appointment of an arbitrator without necessitating a prior notice, subject to specific conditions being met. It concluded that once an arbitration agreement has been invoked by one party, it cannot be subsequently invoked again by another party.

The High Court determined that the present case fell within the purview of Section 11(6)(c) rather than Section 11(5). Considering that arbitration had already been initiated, the High Court deemed it appropriate to refer the matters to the same arbitrator, who was already adjudicating disputes pertaining to other agreements between the parties.

Case Title: Prime Interglobe Private Limited vs. Super Milk Products Private Limited.

Case Number: ARB. P. 337/2023.

Advocate for the Petitioner: Mr. Gaurav Gupta, Mr. Nikhil Kohli, Mr. Tushar Mudgil, and Mr. Kushank Garg.

Advocate for the Respondent: Mr. Aseem Chaturvedi, Mr. Shivank Diddi, and Mr. Milind Jain.