"1 2026:CGHC:13782 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ARBR No. 56 of 2025 Esds Software Solution Limited Through Its Authorised Signatory Mr. Rajeev Thakur Having Its Registered Office At Plot No. B- 24 And 25, Nice Industrial Area Satpur Midc Road Nashik Maharashtra - 422007 ...Applicant versus Chhattisgarh Infotech Promotion Society (Chips) Through Its Chief Executive Officer 2nd And 3rd Floor, State Data Centre Building, Opp. New Circuit House, Civil Lines, Raipur, Chhattisgarh- 492001 ...Respondent For Applicant :Mr. Anmol Singh Khanuja, Advocate. For Respondent :Mr. Rishabh Garg, Advocate.(through V.C.) Hon’ble Mr. Ramesh Sinha, Chief Justice Order on Board 23.03.2026 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”) for appointment of an arbitrator. Printed from counselvise.com VAIBHAV SINGH Digitally signed by VAIBHAV SINGH Date: 2026.03.27 11:44:51 +0530 2 2. The applicant has prayed for the following relief:- a. b. Appoint a Sole Arbitrator, to adjudicate the dispute between the parties arising out of the MSA dated 24.12.2021 pertaining to the IPeG Project between the applicant and the Non-Applicant/Respondent; And/or Grant such other order(s) as this Hon'ble Court may deem fit in the interest of justice. 3. The fact, in brief, as projected by the applicant is that the ESDS Software Solution Limited (hereinafter referred to as “ESDS” or “Applicant”), is a public company duly incorporated under the Companies Act, having CIN U72200MH2005PLC155433 and registered office at Nashik, Maharashtra. The applicant is a leading and diversified entity engaged in information and communications technology solutions, including large-scale e-Governance platforms, secure cloud hosting, programme management, operations and maintenance, and allied digital infrastructure services. The applicant is represented through its authorised signatory and Power of Attorney Holder. The respondent, Chhattisgarh Infotech Promotion Society (CHiPS), is a registered society promoted by the Government of Chhattisgarh and functions as the State’s nodal agency for implementation of IT initiatives and e-Governance projects, including those under the National e-Governance Plan (NeGP). In association with the World Bank, the respondent issued request for proposal (RFP) No. 81971/CEO/CHIPS/IPEG/2021 Printed from counselvise.com 3 dated 19.08.2021 for implementation of the Integrated Proactive e- Governance System (IPeG Project), aimed at providing a unified digital platform for delivery of government services to citizens. Pursuant to the RFP, the applicant participated in the bidding process and was selected as the Master System Integrator (MSI). Accordingly, a Letter of Intent dated 30.10.2021 was issued in its favour, followed by execution of a Master Service Agreement (MSA) dated 24.12.2021 between the applicant and the respondent, governing the rights and obligations of the parties. The scope of the Project included design, development, integration, hosting, security certification, and operation of a unified citizen-centric platform, along with integration of identity systems, payment gateways, dashboards, grievance redressal mechanisms, and programme management functions. That upon commencement of the Project, the applicant mobilized its resources and undertook development of the platform, including core and extended modules. However, the progress of the Project was substantially dependent on fulfillment of several owner-side prerequisites, including provisioning of UIDAI authentication services (AUA/KUA), Aadhaar Data Vault (ADV), departmental datasets, and payment gateway approvals. That despite repeated communications from the applicant since early 2022, the respondent failed to ensure timely provisioning of these critical dependencies. The absence of these prerequisites materially impeded the progress of the Project and delayed transition to User Acceptance Testing (UAT), certification and Go-Live stages. The Printed from counselvise.com 4 Project envisaged milestone-based progression culminating in UAT, followed by security certification through STQC and eventual Go- Live. The applicant submitted multiple milestone deliverables and demonstrated functional modules on various occasions; however, the Respondent failed to schedule and complete UAT, which was a condition precedent for further progress. Further complications arose on account of delays in data sharing by the Respondent. A tripartite Memorandum of Understanding dated 07.12.2022 was executed between the applicant, respondent and Foundation for Science, Innovation and Development (FSID) for enabling secure data exchange. However, due to non-payment by the respondent, FSID suspended its services, thereby severely impacting testing and integration activities. The respondent issued a cure notice dated 27.08.2024 alleging delay, to which the applicant replied on 25.09.2024, clearly explaining that the delays were attributable to non-fulfilment of owner-side obligations, including lack of UAT scheduling and data provisioning. Despite the above, the respondent issued a termination notice dated 28.05.2025 alleging non-performance and imposing penalties, which, as per the applicant, are arbitrary, contrary to contractual provisions and beyond the permissible limits. That immediately thereafter, the applicant issued communications dated 29.05.2025 and 05.06.2025, disputing the allegations, highlighting contractual breaches by the Respondent, and requesting adherence to dispute resolution mechanisms, including restraint on invocation of bank Printed from counselvise.com 5 guarantees. 4. It is further submitted that the contractual term of the MSA expired on 23.12.2024, and prior thereto, the applicant had sought extension of the Project period vide letter dated 11.12.2024 to enable completion of pending dependencies and UAT; however, no response was received from the Respondent. The disputes between the parties thus crystallised upon issuance of the termination notice and related communications, giving rise to arbitrable disputes. That Clause 25 of the MSA provides for a dispute resolution mechanism comprising escalation, mediation, and thereafter arbitration. In accordance with the said clause, the applicant invoked mediation vide notice dated 09.06.2025, however, the respondent failed to participate, and no settlement was reached. Thereafter, the applicant invoked arbitration vide notice dated 26.06.2025 and called upon the respondent to mutually agree upon appointment of a Sole Arbitrator. However, despite lapse of the contractual period of one month, no consensus was reached, nor was any arbitrator appointed. That the failure of the respondent to act in accordance with the agreed procedure constitutes failure of the appointment mechanism, thereby attracting the jurisdiction of this Hon’ble Court under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996. The seat and venue of arbitration is Raipur, Chhattisgarh, and the parties have expressly agreed that this Hon’ble Court shall have jurisdiction to appoint the Arbitrator. A substantial part of the cause of action has also arisen within the Printed from counselvise.com 6 State of Chhattisgarh. The present Application is within limitation. The disputes crystallized upon termination dated 28.05.2025 and subsequent invocation of arbitration dated 26.06.2025. The present application is confined to appointment of an Arbitrator and does not seek adjudication on merits. The applicant has not filed any other application seeking appointment of an Arbitrator in respect of the same dispute. In view of the aforesaid facts and circumstances, it is just, proper and necessary that this Hon’ble Court may be pleased to appoint an independent, impartial and competent Sole Arbitrator to adjudicate the disputes between the parties. 5. Mr. Anmol Singh Khanuja, learned counsel for the applicant, submits that the applicant, ESDS Software Solution Limited, respectfully submits that despite successful execution of substantial portions of the work under the Master Service Agreement dated 24.12.2021, the respondent has failed to release the legitimate dues payable to the applicant, even after repeated requests, reminders, and formal notices. The applicant duly performed its obligations by mobilizing resources, developing core and extended modules, and submitting milestone deliverables from time to time; however, payments linked to such milestones have been wrongfully withheld by the respondent without any lawful justification. The applicant further submits that the project progression was significantly dependent upon owner-side prerequisites such as provisioning of AUA/KUA services, Aadhaar Data Vault (ADV), departmental datasets, and data exchange mechanisms, which were either Printed from counselvise.com 7 delayed or not made available in a timely and continuous manner, thereby impeding completion of subsequent stages like User Acceptance Testing (UAT) and certification. Thus, the delay, if any, cannot be attributed solely to the applicant. 6. Mr. Khanuja, further submits that the disputes and differences having arisen between the parties, the applicant duly invoked the dispute resolution mechanism as contemplated under the contract, including issuance of notices seeking amicable resolution and thereafter invoking arbitration. However, despite receipt of such notices, the respondent failed and neglected to appoint an arbitrator within the stipulated period of 30 days, as required under the agreed terms. The inaction and failure of the respondent to act in accordance with the arbitration clause clearly demonstrate its unwillingness to resolve the disputes through the agreed contractual mechanism, thereby frustrating the very purpose of the arbitration agreement between the parties. 7. He further submits that in these circumstances, the applicant left with no efficacious alternative remedy except to approach this Hon’ble Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an independent Sole Arbitrator. The existence of a valid and binding arbitration clause between the parties is undisputed, and the failure of the respondent to act in terms thereof necessitates judicial intervention. The applicant submits that the disputes raised are bona fide, live, and arbitrable in nature, and therefore, for the ends of justice and proper adjudication Printed from counselvise.com 8 of disputes, it is necessary that this Hon’ble Court be pleased to appoint an independent and impartial Sole Arbitrator to adjudicate upon the disputes between the parties. 8. Mr. Rishabh Garg, learned counsel for the respondent submits that the present application is wholly misconceived, frivolous, and devoid of merit, having been filed on the basis of false, misleading, and afterthought allegations. The respondent denies each and every averment made by the applicant, save and except those specifically admitted herein, and submits that nothing in this reply shall be deemed to have been admitted merely for want of specific denial. It is further submitted that the present petition itself is not maintainable in law, as the applicant has failed to establish proper authorization to institute the proceedings, and the alleged Board Resolution dated 16.10.2025 is invalid and not in accordance with law, thereby rendering the filing of the present application defective and unsustainable at the threshold. 9. Mr. Garg, further submits that the applicant has consistently failed to perform its contractual obligations under the Master Service Agreement dated 24.12.2021 and has attempted to shift the burden of its own defaults upon the respondent by making baseless and unsubstantiated allegations. It is denied that the applicant mobilized adequate resources, developed functional modules, or achieved any milestone in accordance with the contract. On the contrary, the deliverables, if any, were incomplete, deficient, and not fit for User Acceptance Testing (UAT), which prevented further progression of Printed from counselvise.com 9 the project. The allegations regarding non-provisioning of AUA/KUA services, Aadhaar Data Vault (ADV), datasets, payment gateway integration, or data exchange through FSID are wholly incorrect and are merely an afterthought to conceal the applicant’s inefficiency and non-performance. Despite issuance of a Cure Notice dated 27.08.2024 granting sufficient opportunity to remedy the defects, the applicant failed to take any corrective steps, compelling the respondent to terminate the contract on 28.05.2025 strictly in accordance with the agreed terms and to impose penalties as per the contract. 10. He further submits that the applicant has failed to comply with the mandatory pre-conditions for invocation of arbitration as stipulated under Clause 25 of the Master Service Agreement as well as Section 21 of the Arbitration and Conciliation Act, 1996. The applicant did not issue any valid demand notice setting out the disputes and claims in the manner prescribed, nor did it adhere to the agreed dispute resolution mechanism, including escalation procedures, mediation, and reference to experts prior to invoking arbitration. In the absence of compliance with these mandatory pre- requisites, no valid dispute can be said to have arisen or been referred to arbitration, and consequently, the present application under Section 11(6) is premature and not maintainable. The allegations that the respondent failed to appoint an arbitrator within the stipulated period are also denied, as no valid invocation of arbitration was ever made by the applicant. In view of the above, it Printed from counselvise.com 10 is submitted that the present application is an abuse of the process of law, filed with the sole intention of evading contractual liabilities and creating an artificial dispute where none exists. The applicant, being in material breach of the contract, cannot be permitted to take advantage of its own wrongs or seek equitable relief from this Hon’ble Court. Accordingly, it is most humbly prayed that this Hon’ble Court may be pleased to dismiss the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996 as being not maintainable, devoid of merit, and filed in contravention of the contractual and statutory provisions, along with such other reliefs as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case. 11. I have heard learned counsel appearing for the parties, perused the pleadings and documents appended thereto. 12. Clause 25 of the MSA provides for a dispute resolution mechanism, which reads as under:- a. This Agreement shall be governed by and construed in accordance with the laws of India without giving effect to conflict of law rules. The parties expressly agree to exclude me application of the U.N. Convention on Contracts for the International Sale of Goods (1980) to this Agreement and the performance of the parties contemplates under this Agreemars to the extent that such convention might otherwise be applicable Printed from counselvise.com 11 b. Any dispute ansing out of or in connection with this Agreement or the SLA shall in the first instance be dealt with in accordance with the escalation procedure as set out in the Governance Schedule set out as Schedule V of this Agreement c. In case the escalations do not help in resolution of the problem within 3 weeks of escalation, both the parties should agree on a mediator for communication between the two parties. The process of the mediation would be as follows: ●Aggrieved party should refer the dispute to the identitled mediator in writing, with a copy to the other party Such a reference should contain a description of the nature of tha dispute, the quantum in dispute (if any) and the relief or remedy sought suitable ●The mediator shall use his best endeavors to conclude the mediation within a certain number of days of his appointment ●If no resolution can be reached through mutual discussion or mediation within 30 days then the matter should be referred to Exparts for advising on the issue. d. Any dispute or difference whatsoever arising between Printed from counselvise.com 12 the parties to this Contract out of or relating to the construction, meaning, scope, operation or effect of this Contract or the validity of the breach thereof shall be referred to a sole Arbitrator to be appointed by mutual consent of both the parties herein. If the parties cannot agree on the appointment of the Arbitrator within a period of one month from the notification by one party to the other of existence of such dispute, then the Arbitrator shall be appointed by the Honorable High Court of Chhattisgarh (Bilaspur, India). The provisions of the Arbitration and Conciliation Act, 1996 will be applicable and the award made there under shall be final and binding upon the parties hereto, subject to legal remedies available under the law. Such differences shall be deemed to be a submission to arbitration under the Indian Arbitration and Conciliation Act, 1996, or of any modifications, Rules or re-enactment thereof. The Arbitration proceedings will be held at Raipur, Chhattisgarh, India. Any legal dispute will come under the sole jurisdiction of Chhattisgarh. India. e. Compliance with laws: Each party will comply with all applicable export and import laws and regulations. ●Risk of Loss: For each hardware item, MSI bears the risk of loss or damage up to the time it is delivered to the Printed from counselvise.com 13 Implementation/CHiPS-designated carrier for shipment to CHIPS or CHIPS's designated location. ●Third party components: MSI will provide all third-party components solely on a pass- through basis in accordance with the relevant third-party terms and conditions. 13. Though the respondents have vehemently opposed the present arbitration request petition, but this Court, having regard to the existence of an arbitration agreement and the failure of the respondents to act in accordance with the agreed procedure, is of the considered opinion that the disputes deserve to be referred to arbitration. Accordingly, the disputes between the parties are referred to the sole arbitration of a retired Judge of this High Court, to be appointed in accordance with law. 14. In view of the above, Hon’ble Mr. Justice Deepak Kumar Tiwari a retired Judge of this High Court is appointed to act as the Sole Arbitrator to resolve the dispute involved in this arbitration request between the parties a retired Judge of this High Court, to act as the Sole Arbitrator for resolving the dispute between the parties before whom the respondent shall be at liberty to raise all his objections, as has been raised herein. 15. The Registry is directed to communicate this order to Hon’ble Mr. Justice Deepak Kumar Tiwari in the proper address. Printed from counselvise.com 14 16. The remuneration of the Arbitrator shall be settled with the mutual consent of the parties. 17. The arbitration request petition, accordingly, stands allowed. Sd/- (Ramesh Sinha) CHIEF JUSTICE vaibhav Printed from counselvise.com "