Authority: High Court of Judicature at Madras

Order Date: 28 August 2026

Case Overview

  • Petitioner: M/s Elnet Technologies Ltd., represented by its authorised signatory Mrs. Indumathi, Chief Financial Officer, address: Elnet Software City, Door No.140 (New No.3), Rajiv Gandhi Salai, Taramani, Chennai – 600 113.
  • Respondents:

1. M/s Cloud Pencils Private Ltd., represented by its Directors Mr. Jafar Sharif and Mr. Mahalingam Kannan, address: P.No.2A, 8th Street, Saraswathi Nagar, Puzhuthivakkam, Chennai – 600 0091.

2. M/s Cloud Pencils LLC., represented by its President Mr. Logan Anjaneyulu, addresses: 4737 College Park, Suite 102, San Antonio, Texas – 78249, USA and 2030 N 1604 W Suite 201, San Antonio, Texas – 78248, USA.

  • Nature of Proceeding: Petition filed under Section 15(1)(a) read with Section 11(5) of the Arbitration and Conciliation Act, 1996 seeking substitution of the sole arbitrator to continue adjudication of disputes arising from a Lease Agreement dated 22 August 2018.
  • Background: The Court had originally appointed a sole arbitrator on 5 January 2022. The appointed arbitrator recused himself by memo dated 17 December 2024 for personal and other reasons. The petitioner argued that the first respondent (Cloud Pencils Private Ltd.) had failed to pay rent from January 2020 despite reminders. The second respondent (Cloud Pencils LLC.) is a foreign entity; its inclusion was contested as an attempt to bring the matter within the Court’s jurisdiction under Section 2(1)(f) of the Arbitration Act.
  • Procedural History: On 9 March 2023, the second respondent filed an application to be deleted from the array of parties; the arbitrator held that the necessity of its presence could be decided later after full adjudication of the issues.
  • Court’s Reasoning: The Court held that it retains the power to substitute an arbitrator when the originally appointed arbitrator recuses himself, and that the dispute primarily lies between the petitioner and the first respondent, with the second respondent being a veritable party only.

Final Outcome

  • The Court ordered substitution of the sole arbitrator: Hon'ble Mr. Justice V. Parthiban (Cell No. 9444094401), former Judge of this Court, residing at "TAISHA‑2", Flat No. 6, N‑Block, 14th Floor, West Natesan Nagar, Virugambakkam, Chennai, is appointed in place of Hon'ble Mr. Justice M. Sathyanarayanan, retired Judge of this Court.
  • The newly appointed sole arbitrator is directed to enter upon the reference and resolve the disputes between the parties. He is entitled to fix his own fees. No order as to costs was made.

Topics: Arbitration, Lease Dispute