Arbitration clauses in agreements impose a duty to resolve disputes through arbitration if amicable negotiation fails, as per the Arbitration and Conciliation Act, 1996.

ORDER :

Ashok S.Kinagi, J.

1. This Civil Miscellaneous petition is filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short, "the Act") for adjudication of the disputes between the parties to the petition in terms of Clause (15.2) of the Retail Services Agreement dated 13.06.2024 vide Annexure “A”, as per the provisions of the Act.

2. Brief facts leading rise to the filing of this petition are as follows:

3. The petitioner and M/s.Lulu International Shopping Mall Limited entered into a Leave and License Agreement dated 28.03.2024 regarding the retail space admeasuring 6,124 square feet in carpet area and 10,166 square feet in chargeable area, located at Unit No.SF-03, 2^nd floor, Lulu Mall, Gopalpur, Bengaluru-560023. In terms of the Retail Service Agreement entered into between the parties, the respondent was deemed to have commenced its business operations in retail space.

4. The respondent, in breach of its obligation under the Agreement, failed to make payments due and payable thereunder to the petitioner despite several reminders from the petitioner. The petitioner issued a legal notice on 02.12.2024 to the respondent highlighting various breaches of the Agreement dated 13.06.2024 by the respondent.

5. The respondent issued a reply to the legal notice on 20.12.2024. The petitioner responded to the reply notice on 10.01.2025. It was learnt by the petitioner that the respondent had removed all its goods/inventory/products that were present in the retail space provided by the petitioner.

6. The petitioner invoked the Arbitration Clause (15.2) by issuing a notice dated 07.02.2025 by nominating a sole Arbitrator and referring the dispute between them to the arbitration.

7. The respondent replied to the arbitration notice wherein he has refused to accept the name of the Arbitrator proposed by the petitioner. Hence, this petition.

8. Heard the arguments of the learned counsel for the petitioner and the learned counsel for the respondent.

9. The learned counsel for the respondent submits no objection to nominate any retired High Court Judge as an Arbitrator to resolve the disputes between the parties to the petition.

10. Perused the records and considered the submissions made by the learned counsel for the petitioner and the learned counsel for the respondent.

11. The point that arises for consideration in this petition is :

"Whether the petitioner has made up a ground to refer the matter to the arbitrator to resolve the disputes between the parties to the petition in terms of Clauses (15.2) of the Retail Services Agreement dated 13.06.2024 as per the provisions of the Arbitration and Cancellation Act."

12. There is no dispute regarding the execution of the Retail Services Agreement between the parties on 13.06.2024, and the disputes arose between the parties regarding the payment of certain amounts due and payable to the petitioner. The petitioner requested the respondent to pay the amounts; however, despite several requests made by the petitioner, the respondent did not pay the said amount. The petitioner issued a legal notice on 02.12.2024 highlighting the various breaches of the terms of the agreement and calling upon the respondent to make the payment. The respondent replied to the legal notice, denying the allegations made therein. The petitioner invoked the arbitration Clauses (15.2.1) and (15.2.2), by issuing a notice dated 07.02.2025 under Section 21 of the Act. Clauses 15.2.1 and 15.2.2 of the Agreement dated 13.06.2024 read as follows:

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