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Karnataka High Court Appoints Arbitrator in JK Technosoft vs. Unikul Solutions Dispute

In a recent legal development, the Karnataka High Court has passed an ex-parte order appointing an arbitrator to resolve a dispute between JK Technosoft Limited and Unikul Solutions Private Limited. The case revolves around a service agreement between the two companies, which took place in 2016 and 2020.

The petitioner, JK Technosoft, alleged that Unikul Solutions had failed to pay the outstanding dues as per the service agreement. In response to this, JK Technosoft invoked the arbitration clause contained in the agreement and selected three potential arbitrators. They requested Unikul Solutions to do the same, but the latter did not consent to arbitration, leading to the matter being brought before the High Court.

Justice R Devdas, the single judge hearing the case, made some significant observations. The judge noted that an arbitration agreement need not be signed by the parties if it is provided by exchange of letters, telegrams, or other means of telecommunications.

Additionally, the judge pointed out that the Contract Act recognizes oral agreements and a written agreement is essential for a valid arbitration agreement.

During the proceedings, the counsel for JK Technosoft admitted that the service agreement was not on a stamp paper. However, they argued that since the agreement was not signed by Unikul Solutions, it could not be considered an instrument attracting stamp duty. The court accepted this argument and clarified that a document in writing, even if not signed, can be considered a contract.

The crucial decision came when the counsel for JK Technosoft informed the court that the documents relied upon were not original and that they had sought production of the originals. In light of this revelation, the question of impounding the documents was rendered moot since they were only photocopies and could not be authenticated.

Based on this information, the High Court accepted the counsel's submission and appointed retired District Judge HM Nanjundaswamy as the sole arbitrator to resolve the dispute between JK Technosoft and Unikul Solutions.

This judgment holds significance as it reaffirms the validity of arbitration agreements even if not signed, and it clarifies the applicability of stamp duty to such documents. Moreover, the appointment of a retired District Judge as the arbitrator ensures an impartial resolution to the dispute.

With the appointment of the arbitrator, the parties involved can now proceed with the arbitration process. The selected arbitrator will play a crucial role in evaluating the evidence, hearing both parties, and delivering a fair and just resolution.

The Karnataka High Court's decision to appoint an arbitrator in the JK Technosoft vs. Unikul Solutions dispute marks a significant milestone in the legal proceedings. The court's observations on arbitration agreements and stamp duty provide clarity to businesses entering into contracts. With the appointment of an impartial arbitrator, the parties involved can look forward to a fair resolution of their dispute. This case serves as a reminder of the importance of well-drafted agreements and the need for amicable dispute resolution mechanisms in the business world.