The High Court of Judicature at Bombay has appointed retired Justice Rohit B. Deo as the sole arbitrator to resolve a commercial dispute between Nisus Finance Services Co. Limited and its affiliate, Nisus BCD Advisors LLP, and several real estate entities, including Blisvins Realty Private Limited. This decision follows a protracted legal disagreement over unpaid advisory fees and alleged breaches of exclusivity obligations linked to a proposed structured debt funding transaction for the "Treasure Palms Phase 1" project. In his order, Justice Amit Borkar emphasized that procedural irregularities in the initial appointment of an arbitrator do not nullify the underlying arbitration agreement.

The dispute arose in late 2025 after negotiations between the financial advisory firms and the respondent entities for a funding arrangement worth up to ₹65 crore. The parties executed a term sheet on December 15, 2025, followed by an advisory fee letter agreement on December 18, 2025. According to the applicants, these documents created binding obligations, including an exclusivity clause that the respondents allegedly violated by opting for another investor. The applicants sought to recover ₹16.94 crore in unpaid fees, interest, and damages. When the respondents denied liability, arguing the term sheet had lapsed and was non-binding, the applicants invoked the arbitration clause, leading to the current litigation under Section 11 of the Arbitration and Conciliation Act, 1996.

The High Court rejected the respondents' contention that the absence of fully executed, definitive financing agreements rendered the arbitration clause inoperative. Justice Borkar noted that the term sheet contained specific provisions—namely "Transaction Costs," "Exclusivity," and "Confidentiality"—that were explicitly marked as binding. Consequently, the court found that Clause 25 of the term sheet, which mandates arbitration for disputes regarding any binding provision, remained valid and enforceable. The ruling clarified that the court’s role at the preliminary stage of a Section 11 application is limited to confirming the prima facie existence of an arbitration agreement, rather than adjudicating on the merits of the underlying claims or the final enforceability of every clause within the term sheet.

“The arbitration agreement may continue to be valid even if the method of appointment mentioned in it cannot be followed,” Justice Borkar observed, highlighting the distinction between the existence of an agreement to arbitrate and the validity of the specific procedure for appointing an arbitrator. The court took issue with the applicants' prior unilateral attempt to appoint an arbitrator, finding such a process invalid under established legal principles, particularly in light of Supreme Court precedents regarding neutral arbitration. However, this failure to follow a balanced appointment procedure did not serve as grounds to extinguish the arbitration agreement entirely. Instead, the court exercised its authority to nominate an independent, neutral arbitrator to ensure impartiality.

The respondents had also argued that the term sheet had expired seven days after its issuance because it was not signed by all parties within the stipulated timeframe. The court, however, pointed to the subsequent conduct of the parties, including the execution of the advisory fee letter and electronic communications regarding payment of processing fees, as evidence that the business relationship continued beyond the alleged expiry date. “There is sufficient prima facie material to consider the fee dispute as connected with the implementation of the Term Sheet and the binding obligations arising from the transaction,” the judge noted, effectively dismissing the respondents' attempt to isolate the fee agreement from the initial term sheet.

By consolidating the disputes—ranging from the breach of the exclusivity clause to the recovery of advisory fees—under a single arbitrator, the High Court aimed to provide a comprehensive resolution mechanism for the parties. Justice Rohit B. Deo has been tasked with overseeing the proceedings and establishing a schedule for pleadings, witness examinations, and final hearings. The court expressly maintained that all contentions on the merits of the case, including the actual extent of the breach and the quantum of damages, remain open for the arbitrator to decide.

The appointment of the arbitrator marks a significant step forward for the parties, who have been locked in a legal stalemate since mid-2026. The order requires the applicants to notify the arbitrator of the appointment within one week and provide all relevant communication particulars for the respondents. The costs of the arbitral proceedings are to be shared equally by the parties in the first instance, subject to a final decision on costs in the eventual award.

This judgment serves as a reminder to commercial entities regarding the weight of "binding" clauses in preliminary documents. Even when a broader financing transaction does not materialize, the specific obligations defined as binding—such as confidentiality, exclusivity, and dispute resolution mechanisms—carry significant legal force. By validating the arbitration clause, the High Court has ensured that the disputes over these critical elements are addressed through the intended private tribunal, rather than being dismissed based on technical arguments regarding the status of the overall transaction documents. The parties are now directed to appear before Justice Deo to obtain formal procedural directions, shifting the battle from the judicial chambers of the High Court to the arbitral forum.