Delhi High Court junks plea to appoint arbitrator to settle "dead-wood, time-barred" dispute against Maruti

The Delhi High Court recently dismissed a plea to appoint an arbitrator to settle a 2006 dispute against Maruti Udyog Limited (now Maruti Suzuki Limited) [Arunima Automobiles v. Maruti Udyog Limited].Justice Dinesh Kumar Sharma termed the plea a sheer abuse of the court process and also found merit in Maruti’s contention that the plea was filed in the name of a partnership firm that had “already been dissolved” and “ceased to exist.” The judge added that, in such circumstances, it was “beyond comprehension” as to how the petition before the Court was even filed.“Apparently, the present petition is nothing but an abuse of the process of the court and a sheer attempt to prosecute the ex-facia deadwood or the time-barred claim,” the Court added before dismissing the petition.The Court was dealing with a petition filed on behalf of Arunima Automobiles which was represented by its partners. The said partnership firm had entered into an agreement in 2004 with Maruti to set up an authorised service station.However, disputes eventually cropped up between the two parties. Meanwhile, in 2006, the partners of the firm formed a private limited company (partners becoming the directors of the said company) named Arunima Automobiles Private Limited. The affairs of the partnership firm were, thereafter, managed by this private company.The dispute was referred to arbitration in 2007. The arbitral award was rendered 15 years later in 2022. In this award, the arbitrator dismissed all claims by Arunima Automobiles Private Limited as not maintainable.The arbitrator reasoned that the private limited company was not entitled to make claims in respect of a dispute between Maruti and the partnership firm, more so since the 2004 agreement between the two specifically prohibited any assignment of the contract.Rather than challenging this 2022 arbitral order, Arunima Automobiles Private Limited opted to file a petition before the High Court seeking the appointment of another arbitrator to settle the dispute.By an order passed on January 24, the High Court declined to intervene.“The bare perusal of the aforesaid findings made by the learned arbitrator makes it clear that the learned arbitrator has gone into all the material questions and has passed the detailed award dated 19.03.2022 … I consider that there is no substance in the contentions being taken by the petitioner. The partnership firm was earlier converted into a private limited company and the conversion itself is in violation of the terms of the MASS agreement dated 1st April 2004 and even thereafter, Arunima Automobiles Private Limited company filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 and followed the same for 15 years before the learned arbitrator and the present petition has been filed only after the learned arbitrator rejected all the claims of the petitioner,” the High Court said, before dismissing the petition..Arunima Automobiles was represented by advocates Dr. Amit George, Shubham Mishra, Rishav Ranjan, Rayadurgam Bharat, Shashwat Kabi, Vaibhav Shahi, Vineeta Singh, Nikhil Kumar, Prashita Mishra, and Divyansh Rai.Maruti Suzuki India Limited was represented by Senior Advocate TK Ganju, briefed by Rise Legal’s litigation team, Aquib Ali (Partner), Anish Lakhanpal (Senior Associate) and Amreen Khaliq (Junior Associate) and advocates Vanshika Rana and Shahnawaz..[Read Judgment]