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Bombay High Court

A A GARG AND COMPANYversusHUSSAIN AHMED PARPIA

Decided
Disposal
DISPOSED OFF

Holding

The court held that a valid arbitration agreement existed and was properly invoked, and therefore appointed a sole arbitrator.

Summary

The applicant company filed a Section 11 application seeking the appointment of a sole arbitrator under an arbitration clause in its employment agreement with the respondent, a former employee who allegedly poached clients and staff after resigning. The agreement contained a clause allowing either party to refer disputes to a sole arbitrator, with the arbitration to be conducted in Mumbai under the Arbitration and Conciliation Act, 1996. The company served a notice of arbitration on the respondent, who did not respond. The court examined whether a valid arbitration agreement existed and whether the arbitration was properly invoked. Finding the clause enforceable and the invocation on 22 May 2025 valid, the court appointed Ms. Sneha Phene as the sole arbitrator and issued procedural directions. The order also directed communication of the appointment to the arbitrator and compliance with statutory disclosure requirements.

Issues considered

  • Whether a valid arbitration agreement exists between the parties under the employment contract.
  • Whether the arbitration was validly invoked pursuant to Section 11 of the Arbitration and Conciliation Act, 1996.

Legislation cited

Subjects

  • Arbitration
  • Employment Agreement
  • Section 11 Application
  • Sole Arbitrator
  • Arbitration Agreement
  • Poaching of Clients
  • Arbitration and Conciliation Act
  • Bombay High Court

Judgment

         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 ORDINARY ORIGINAL CIVIL JURISDICTION
                            [ COMMERCIAL DIVISION ]

     COMMERCIAL ARBITRATION APPLICATION NO.393 OF 2026
A.A. Garg and Company                                                 .. Applicant
       Vs.
Hussain Ahmed Parpia                                                  .. Respondent


Ms. Sonia Sunil, Advocate for the Applicant.
None for the Respondent.

                                    CORAM : GAUTAM A. ANKHAD, J.

                                    DATE        : 17th August, 2026.
P.C. :

1.       This Section 11 Application is filed seeking appointment of the sole

Arbitrator in relation to the disputes that have arisen under the Employment

Agreement dated 17th July, 2023 (“Agreement”) executed between the parties.

The arbitration agreement between the parties is recorded at Clause No.18.2,

the relevant portion of which reads as under:-


         “18.    DISPUTE RESOLUTION

         18.2    VALIDITY /IMPLEMENTATION
                 18.2.1. In the event of a dispute arising in connection with the
                         validity, interpretation, implementation of this Agreement,
                         either Party may refer the dispute for resolution to a sole
                         arbitrator or in case of disagreement in the appointment of
                         the arbitrator, to three arbitrators, of which each Party
                         shall nominate one and the third arbitrator shall be
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3-CARAP-393-2026.doc                                                                   Dixit
                         appointed by the said two arbitrators. The arbitration
                         proceedings shall take place in Mumbai, India in
                         accordance with the provisions of the Arbitration and
                         Conciliation Act, 1996, as amended from time to time.
                   All proceedings in any such arbitration shall be conducted in
                   English. The arbitration award shall be final and binding on the
                   parties and the parties agree to be bound thereby and to act
                   accordingly.

          19.     GOVERNING LAW
                   This Agreement shall be governed by laws of India. It is agreed by
                   both parties, the Courts of Mumbai shall have exclusive
                   jurisdiction in respect of all matters relating to or arising out of
                   this Agreement.”


2.      The learned counsel appearing for the Applicant-Company submits that

the Respondent was in the Company’s employment from 11 th July, 2023 to 25th

March, 2025. The Respondent resigned from the employment, which

resignation was accepted on 16th April, 2025. The Respondent’s last working

day was 30th April, 2025. It is stated that the Respondent has approached

several customers and previous employees of the Applicant-Company and has

attempted to poach customers, employees and the business of the Applicant in

breach of the Agreement. In these circumstances, the Applicant addressed legal

notice dated 22nd May, 2025 calling upon the Respondent to immediately cease

and desist from approaching the Applicant’s clients and employees failing

which legal recourse would be taken against the Respondent. There was no

response to this notice. Consequently, on 6 th August, 2025, the Applicant has


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invoked arbitration under the Agreement. Once again there is no response to

the invocation notice.



3.      The learned counsel for the Applicant-Company tenders an affidavit-of-

service dated 17th August, 2026 to demonstrate that the Application has been

served on the Respondent. The said affidavit is taken on record and marked ‘X’

for identification.



4.      No one appears for the Respondent despite service. The record

demonstrates that the parties have executed the Employment Agreement. The

Applicant has invoked arbitration by its Advocate’s notice dated 22 nd May,

2025 which notice has been received by the Respondent. The acknowledgment

receipt is at pages 73 to 75 of the paper-book. At this stage, this Court is only

required to examine whether an arbitration agreement exists between the

parties and whether arbitration has been validly invoked. I am satisfied that

there exists a valid arbitration agreement in the Employment Agreement and

the same has been validly invoked on 22 nd May, 2025. Hence, this Application

is allowed in terms of the following order:-


        [A].     Ms. Sneha Phene, learned Advocate of this Court is hereby

                 appointed as the sole Arbitrator to adjudicate upon the

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                 disputes and differences between the parties arising out of

                 and in connection with Employment Agreement referred to

                 above. The contact details of Ms. Sneha Phene, the sole

                 Arbitrator, are as under:

                 Office Address : 317B, New Bake House,
                                  Maharashtra Chamber of Commerce
                                  Lane, Kala Ghoda, Mumbai – 400 001

                 Mobile Number : 9821889233,

                 E-mail ID        : [email protected]”


        [B].     A copy of this order will be communicated to the learned

                 Arbitrator by the Advocate for the Applicant within a

                 period of one week from the date on which this order is

                 uploaded on the website of this Court. The Applicant shall

                 provide the contact and communication particulars of the

                 parties to the Arbitral Tribunal along with a copy of this

                 order;


        [C].     The learned Arbitrator is requested to forward the statutory

                 Statement of Disclosure under Section 11(8) read with

                 Section 12(1) of the Act to the Advocate for the Applicant

                 so as to enable them to file the same in the Registry of this

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                                      Court. The Registry of this Court shall retain the said

                                      Statement on the file of this Arbitration Application and a

                                      copy of the same shall be furnished by the Advocate for

                                      the Applicant to the Respondents;


                             [D].     The parties shall appear before the learned Arbitrator on

                                      such date either on V.C. mode or at such place as indicated

                                      to obtain appropriate directions with regard to conduct of

                                      the arbitration including fixing schedule for pleadings,

                                      examination of witnesses, schedule of hearings etc.


                             [E].     The fees of the learned Arbitrator shall be as per the Fourth

                                      Schedule of the Act read with the Bombay High Court (Fee

                                      Payable to Arbitrators) Rules, 2018.


                             [F].     All issues, claims and counterclaims are kept open to be

                                      agitated before the Tribunal.


                             [G].     The arbitration shall be held at Mumbai.




                                                                          [ GAUTAM A. ANKHAD, J. ]

        Digitally
        signed by
        SNEHA                                                   5/5
SNEHA   ABHAY
ABHAY   DIXIT        3-CARAP-393-2026.doc                                                             Dixit
DIXIT   Date:
        2026.08.18
        10:49:01
        +0530


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