Whether application for appointment of an Arbitrator is maintainable in lieu of a pending petition un-

der Section 9 of the Insolvency and Bankruptcy Code?

Case: Valmar Projects LLP v Isthara Parks Private limited (High Court of Telangana at Hyderabad; Arbitra-
tion Application 6 and 7 of 2024)

Facts: The Parties had entered into a facilities service agreement which required the Respondent to cater
food to the hostel of the Applicant. After disputes arose, the agreements were terminated and soon after the
Respondent filed a petition under Section 9 of the Insolvency and Bankruptcy Code before NCLT, Hyder-
abad. Subsequent to this petition, the Applicant filed this submission under Section 11(6) of the A&C Act,
1996, for the appointment of an Arbitrator.

Arguments: The Respondent has placed the contention that the Applicant has only submitted the same with
ulterior motives as a counter to the petition filed by the Respondent under Section 9 of IBC. The Applicant
has not even mentioned the amount of claim in his application before the court; hence the same is not main-
tainable.

Judgment and Reasoning: The Hon’ble Court first considered the case of State of Goa v Praveen Enter-
prises which laid down that Section 21 does not require the parties to quantify the amount of claim, it only
needs to lay out the disputes. Secondly in Indus Biotech Private Limited vs. Kotak India Venture (Offshore)
Fund, it was held that a mere filing of Section 7 under IBC does not amount to a proceeding, hence it cannot
deter the initiation of a proceeding under the A&C Act, 1996. Thus, the filing of a petition under section 9 of
the IBC cannot bar an application under section 11(6) of the A&C Act, 1996. Thus, the Hon’ble Court ap-
pointed an Arbitrator to resolve the disputes between the parties.

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