INTERCONTINENTAL HOTELS GROUP (INDIA) PVT. LTD. & ANR. versus WATERLINE HOTELS PVT. LTD.

INTERCONTINENTAL HOTELS GROUP (INDIA) PVT. LTD. & ANR. versus WATERLINE HOTELS PVT. LTD.

The Court held that because stamp duty had been paid by the petitioners (even though sufficiency/classification was disputed) the question of insufficiency or incorrect stamping did not preclude appointment of an arbitrator under Section 11(6); courts should refer disputes to arbitration unless the arbitration agreement is patently deadwood. The petition was allowed and Mr. Justice A.V. Chandrashekara (former Judge, High Court of Karnataka) was appointed as sole arbitrator to adjudicate the disputes and issues relating to stamp duty and validity of the HMA.

Parties
Petitioner: Intercontinental Hotels Group (India) Pvt. Ltd.; Petitioner: Intercontinental Hotels Group (Asia-Pacific) Pvt Ltd.; Respondent: Waterline Hotels Pvt. Ltd.
Jurisdiction
India
Judgment Date
25 January 2022
Procedural Posture
Arbitration Petition Under Section 11(6) R/w 11(12)(a) of the Arbitration and Conciliation Act, 1996 / Appointment of Sole Arbitrator (pre Appointment)
Outcome
Petition allowed; parties referred to arbitration and sole arbitrator appointed
Legal Topics
Appointment of Arbitrator, Arbitrability, Validity of Arbitration Agreement, Payment of Stamp Duty, Doctrine of Separability, Estoppel
Arbitration Stamp Law Contract Law Appointment of Arbitrator Arbitrability Validity of Arbitration Agreement Payment of Stamp Duty Doctrine of Separability +1 more

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Parties

Intercontinental Hotels Group (India) Pvt. Ltd.

Petitioner

Intercontinental Hotels Group (Asia-Pacific) Pvt Ltd.

Petitioner

Waterline Hotels Pvt. Ltd.

Respondent

Procedural Posture

Arbitration Petition Under Section 11(6) R/w 11(12)(a) of the Arbitration and Conciliation Act, 1996 / Appointment of Sole Arbitrator (pre Appointment)

Legal Issues

  1. 1 Whether the arbitration agreement/substantive HMA is unenforceable due to non-payment or incorrect payment/classification of stamp duty under the Karnataka Stamp Act, 1957
  2. 2 Whether the Court should appoint an arbitrator under Section 11(6) despite disputes regarding stamp duty and validity of the arbitration agreement
  3. 3 Whether the respondent is estopped from challenging validity of the HMA/arbitration agreement by virtue of Clause 22.1(b) warranty

Ratio Decidendi

The Court held that because stamp duty had been paid by the petitioners (even though sufficiency/classification was disputed) the question of insufficiency or incorrect stamping did not preclude appointment of an arbitrator under Section 11(6); courts should refer disputes to arbitration unless the arbitration agreement is patently deadwood. The petition was allowed and Mr. Justice A.V. Chandrashekara (former Judge, High Court of Karnataka) was appointed as sole arbitrator to adjudicate the disputes and issues relating to stamp duty and validity of the HMA.

Court Disposition

Petition allowed; parties referred to arbitration and sole arbitrator appointed

Orders

  • Appointment of Mr. Justice A.V. Chandrashekara (former Judge, High Court of Karnataka) as sole arbitrator to adjudicate the disputes under Clause 18.2 of the HMA
  • Parties directed to convey this order to the Singapore International Arbitration Centre (SIAC) to proceed in terms of the SIAC rules