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2022 (5) TMI 759 - HC - Insolvency and BankruptcyReference of disputes arising out of collaboration agreement to arbitration - appointment of an Arbitral Tribunal - Effect of proceedings under IBC for admission of application for initiation of CIRP - demand notice issued for recovery of dues by Operational Creditor - HELD THAT:- It is observed that there is no dispute with regard to the execution of the collaboration agreement or the fact that it contains an arbitration clause. Respondent had issued a demand notice demanding certain payment of unpaid operational dues from the petitioner by its demand letter dated 31.12.2021 - the demand letter was responded to by the petitioner by its reply-cum-notice of dispute dated 13.01.2021. In the said reply while disputing the claim of the respondent, petitioner had in paragraph 4(i) called upon the respondent to pay a sum of Rs.1,97,70,192/- to the petitioner and thereafter, in the last paragraph contended that clearly the disputes had arisen and consequently proceeded to appoint an Arbitrator under clause 17 of the collaboration agreement. It clearly cannot be held that no demand was made by the petitioner on the respondent. The merits of the demand or the validity of the same are not to be adjudicated in a petition under Section 11 and as such the same is not being commented upon. However, what is clear, from the notice of demand sent by the respondent and the reply by the petitioner, is that there are disputes between the parties with regard to the entitlement either of the respondent or the petitioner to receive certain amount from the other side. In view of the judgment in INDUS BIOTECH PRIVATE LIMITED VERSUS KOTAK INDIA VENTURE (OFFSHORE) FUND (EARLIER KNOWN AS KOTAK INDIA VENTURE LIMITED) & OTHERS [2021 (3) TMI 1178 - SUPREME COURT], the proceedings under the Insolvency and Bankruptcy Code would take precedence and any moratorium issued therein would automatically bind the proceedings under the Arbitration Act - In case the petition filed before the NCLT is admitted and moratorium comes into play, the legal consequences of the same would automatically apply to the proceedings under the Arbitration Act There is no merit in the objection raised by the respondent on the appointment of an Arbitral Tribunal - Petition disposed off.
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