Karnataka High Court passes ex-parte order appointing arbitrator in dispute between JK Technosoft and Unikul Solutions

The Karnataka High Court recently passed an ex-parte order appointing an arbitrator in a dispute between JK Technosoft Limited and Unikul Solutions Private Limited. [JK Technosoft Limited and Unikul Solutions Private Limited].Justice R Devdas accepted JK Technosoft's submission that the question of impounding documents, relied upon by the company, would arise only when Unikul produces the original documents..In 2016 and 2020, the two companies had entered into service agreements. However, when Unikul failed to pay the outstanding dues, JK invoked the arbitration clause in the service agreement and nominated three counsel as potential arbitrators. They then sent a notice to the respondent, asking them to appoint one arbitrator as well. As the respondents did not agree to arbitration, the petitioners moved the High Court..The Court found that the service agreements relied upon were not signed by Unikul. It also noted that whether or not they were original was unclear.In view of the apex court's judgment in M/s. N.N.Global Mercantile Private Limited Vs. M/s. Indo Unique Flame Ltd, the Court proceeded to examine whether the service agreement was duly stamped.The counsel for the petitioner admitted that the agreement was not on a stamp paper. However, he contended that since the agreement was not signed by the respondent, it could not be construed as an instrument that would attract stamp duty.He also contended that even if a contract was not signed by the parties, it could still be a construed as contract in terms of the apex court judgment..The Court accepted the second argument of the counsel, stating that the judgment clarified that a document that is in writing but not signed can be accepted as a contract.However, wherever such documents attract stamp duty under the provisions of the Stamp Act, the provisions of Sections 33 and 35 regarding inadmissibility and impounding of unstamped documents of the Stamp Act would get attracted, the Court stated..The counsel for the petitioner informed the Court that the documents were not original and that he had submitted applications seeking production of the originals.He contended that this being the position, the question of impounding the two documents since they are only photo copies, would not arise. Hence, he prayed that the matter be referred to arbitration..The Court accepted the submissions and allowed the petition, appointing retired District Judge HM Nanjundaswamy as the sole arbitrator..Advocates Anirudh Suresh and Ayush G appeared for JK Technosoft..[Read Order]