The Respondent, MSD Telematics Pvt. Ltd (hereafter MSD), did not file a response until April 8, 2021, and then requested more time, filing their response on April 19, 2021. The Court proceeded to decide the matter after hearing both sides' arguments. However, after a thorough examination of the facts, this case was rescheduled for a hearing on April 27, 2021, due to an impounding MoU signed on January 1, 2020, which included an arbitration clause.
After a failed buyout deal between the directors of both IMZ and MSD, IMZ claimed that MSD used numerous illegal methods that violated the conditions of the Memorandum of Understanding (hereafter MoU). Their servers were said to have been tampered with. This led them to their database and records, both of which had been tampered with. MSD also filed false charges against IMZ's directors and staff, according to IMZ's counsel. As a result, IMZ filed a notice of arbitration on July 4, 2020.
The petition was not maintainable, according to MSD, because it was filed too soon. The MSD Counsel further claimed that the contested MoU was challenged since it was fabricated throughout the whole MoU. As a result, the agreement was null and void. The genuineness of the MoU was also questioned, and the seriousness of the offences rendered the matter non-arbitrable. MSD's counsel further asserted that IMZ failed to follow the pre-arbitration procedure. It was further asserted that because the MoU was not stamped, it was not legally binding.
Mr Shashank Garg was appointed as the Sole Arbitrator to adjudicate the disputes between the parties under the MoU dated January 1, 2020, after the Petition was granted.
Even though MSD claimed IMZ committed fraud, falsification, and fabrication, the Judge noted that IMZ did not deny signing the MoU. It was observed in Vidya Drolia & Ors. V. Durga Trading Corporation that judicial inquiry was not based on the charge of fraud. Furthermore, it was stated that even when the legitimacy of the MoU was questioned, it was not enough to declare the document forged.
When it came to the claim of non-compliance with the pre-arbitration procedure, the Court said it had no merit because the fact that both parties filed criminal charges against each other indicated that they did not intend to reach a resolution, which is why negotiation as a precondition should not get in the way of the parties' agreed-upon dispute resolution process.
Following that, the Court addressed the question of insufficient stamp duty, which was dismissed by the Court in light of the decision in N.N Global Mercantile Pvt. Ltd v. Indo Unique Flame Ltd. The Court also concluded that MSD's objections to non-arbitrable offences were without merit. Finally, it was determined that the contingencies outlined in section 11(6) of the AC Act were met.