In January 2024, Aarohan Pharma Private Ltd ('Aarohan'), a reputed pharmaceutical manufacturer, entered into a contract with Pentagon Lifesciences Ltd ('Pentagon') for the development and supply of a new line of oncology

CS Professional · Arbitration, Mediation and Conciliation · PYQS · December 2025
In January 2024, Aarohan Pharma Private Ltd ('Aarohan'), a reputed pharmaceutical manufacturer, entered into a contract with Pentagon Lifesciences Ltd ('Pentagon') for the development and supply of a new line of oncology drugs. The contract, valued at ₹150 crore, contained detailed provisions on regulatory approvals, manufacturing timelines, quality control standards, penalties for delay, variation in technical specifications and dispute resolution. Clause 21 of the agreement stipulated that disputes would be resolved through arbitration under the Arbitration and Conciliation Act, 1996, with Hyderabad as the seat and proceedings governed by CIAC Rules. By April 2024, disagreements surfaced as Aarohan alleged that Pentagon delayed release of milestone-based payments and failed to provide timely approvals for raw material sourcing protocols, leading to cost overruns. Pentagon countered that Aarohan had missed regulatory submission deadlines, used substandard excipients in certain trial batches, and ignored directions from the joint project monitoring committee. Quality inspections conducted by Pentagon revealed compliance defects in two pilot production runs, which Pentagon relied on to withhold further payments. Tensions escalated and after weeks of negotiation, the parties signed a Settlement Agreement on July 15, 2024. Pentagon agreed to pay Aarohan ₹30 crore in full and final settlement of all claims, while Aarohan agreed to transfer all partially developed product dossiers and trial data to another manufacturer appointed by Pentagon. However, the settlement did not expressly reaffirm or exclude the arbitration clause. In October 2024, Aarohan, aggrieved that the compensation did not cover its actual R&D and manufacturing expenses, issued a Notice of Arbitration invoking Clause 21 of the original contract. Pentagon objected, contending that the settlement agreement had superseded the original contract and extinguished the arbitration clause. Further, Pentagon challenged Aarohan's nominated arbitrator, citing the arbitrator's past professional ties with Aarohan's counsel. Aarohan then approached the Court seeking constitution of an arbitral tribunal, supporting its application with correspondence, invoices and the disputed settlement terms. Based on the above facts, answer the following questions: Draft an agreement to submit the dispute to an arbitral tribunal, assuming necessary facts.

Answer & Explanation:

ARBITRATION SUBMISSION AGREEMENT This Arbitration Submission Agreement ('Agreement') is made on this [Day] day of [Month] , 2024, by and between: Aarohan Pharma Private Limited , a company incorporated under the Companies Act, 2013, having its registered office at [Address of Aarohan] ('Aarohan'); and Pentagon Lifesciences Limited , a company incorporated under the Companies Act, 2013, having its registered office at [Address of Pentagon] ('Pentagon'). (Aarohan and Pentagon are hereinafter collectively referred to as the 'Parties' and individually as a 'Party'). Recitals The Parties entered into a Contract dated January [Day] , 2024 relating to the development and supply of oncology drugs. Disputes arose between the Parties concerning payment delays, quality compliance, and performance obligations, leading to execution of a Settlement Agreement dated July 15, 2024. The Settlement Agreement did not expressly exclude the arbitration clause contained in Clause 21 of the original Contract. The Parties now mutually agree to submit their disputes to arbitration in accordance with this Agreement. 1. Reference to Arbitration The Parties hereby agree that all disputes, claims, and differences arising out of or in connection with the Contract dated January [Day] , 2024, the Settlement Agreement dated July 15, 2024, and any related dealings between the Parties shall be referred to and finally resolved by arbitration. 2. Arbitral Tribunal The arbitral tribunal shall consist of three arbitrators. Each Party shall appoint one arbitrator within 30 days of execution of this Agreement, and the two appointed arbitrators shall jointly nominate the presiding arbitrator. 3. Seat and Venue The seat of arbitration shall be Hyderabad, India, and the venue of proceedings shall ordinarily be at Hyderabad, unless otherwise agreed by the Parties and the tribunal. 4. Governing Law and Rules The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 and the CIAC Rules as in force on the date of commencement of arbitration. The governing law of this Agreement shall be the laws of India. 5. Binding Effect The award rendered by the arbitral tribunal shall be final and binding on the Parties. 6. Continuation of Obligations Except as modified herein, the terms of the Settlement Agreement and the Contract shall remain binding on the Parties pending final resolution through arbitration. IN WITNESS WHEREOF, the Parties hereto have executed this Arbitration Submission Agreement on the date first written above. For Aarohan Pharma Private Ltd. Authorized Signatory For Pentagon Lifesciences Ltd. Authorized Signatory

Topics: Arbitration Agreement Drafting

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