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Foundation for Innovation and Research in Science and Technology First vs. Deep Algorithms Pvt Ltd & Anr.

Arbitration Petition · 2026:DHC:8329Decided 24 Sept 2026New Delhi Bench
ARB.P. 1714/2026CNR: DLHC010457602026
Justice Manoj Jain

Background

Under a Share Purchase Agreement, the petitioner had sold shares of Deep Algorithms Pvt. Ltd. to an individual buyer, with a clause entitling the petitioner to the price difference if the buyer later resold shares at a higher price within 18 months. The petitioner claimed this "more favourable price" clause was triggered and a large differential amount (over Rs. 4.92 crore) was owed but unpaid, prompting it to seek appointment of an arbitrator.

Decision Breakdown

The buyer's counsel argued no violation of the price-adjustment clause had occurred and the company should not have been impleaded since the agreement was only between the petitioner and the individual buyer, but agreed, without prejudice to these objections, to proceed to arbitration. With the consent of the petitioner and the individual respondent, the Court referred the dispute between them to arbitration and appointed a former judge of the High Court as sole arbitrator, leaving all rights and contentions open.

Lesson Learnt

Even where a respondent disputes that any breach occurred, a court exercising its Section 11 arbitrator-appointment power will not adjudicate the merits of the dispute: it simply enforces the parties' agreement to arbitrate and leaves the substantive dispute to the arbitrator.

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