GOQII Technologies Private Limited vs Sokrati Technologies Private Limited
2024 INSC 853
Coram: Hon’ble Chief Justice Dr. D. Y. Chandrachud (Former), Hon’ble Justice J.B. Pardiwala & Hon’ble Justice Manoj Misra
Forum: Hon’ble Supreme Court of India
Case No.: Civil No. 12234 of 2024
Date of Decision: November 07, 2024

Facts & Background:

  • The appellant was GOQII Technologies Private Limited, a technology-driven wellness venture that provides lifestyle consultancy services.
  • The Respondent was Sokrati Technologies Private Limited, a digital marketing services company and a subsidiary of Dentsu International Limited.
  • The Appellant and Respondent executed a three-year Master Services Agreement for digital advertising, which was extended on 29.04.2022. The Appellant paid Rs. 5,53,26,690/—and processed payments for 10 invoices raised between 12.05.2022 and 07.10.2022.
  • The Appellant discovered that the Economic Offences Wing, Mumbai, had lodged EOW CR No. 08 of 2022 against Dentsu International Limited, alleging serious irregularities and malpractices, which the media had reported in September 2022.
  • On 22.02.2023, the Respondent issued a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, claiming Rs 6,25,67,060/-. The Appellant rejected the demand and invoked arbitration, filing a counterclaim for Rs 5,53,26,690/- and Rs 6 crore in damages.
  • The Appellant filed Commercial Arbitration Application No. 06 of 2024 before the Bombay High Court, requesting the appointment of a sole arbitrator due to the Respondent's failure to comply with the arbitration notice.
  • While the application was pending on 05.10.2023, the Respondent filed Company Petition (IB) No. 27 of 2024 under Section 9 of the IBC before the National Company Law Tribunal, Mumbai, seeking to initiate the corporate insolvency resolution process against the Appellant.
  • The High Court dismissed the Appellant's application without merit. The Court held that the audit report failed to substantiate allegations of fraud and regarded the Appellant's invocation of arbitration as manifestly dishonest.
  • Aggrieved by dismissing the arbitration application, the Appellant filed an appeal before the Supreme Court.

Main Issue:

  • Whether the High Court committed any error in dismissing the Appellant’s application under Section 11 of the Arbitration & Conciliation Act, 1996? (Paragraph 16)