The key legal principle is that the terms of the MOU, including the arbitration agreement, continue to apply even after the expiry of 5 years, and the arbitrator has the authority to interpret and decide on disputes arising from the MOU.

1. By this petition, the petitioner seeks to impugn the arbitral award dated 28th March 2014 allowing the claims made by the respondent and directing the petitioners to pay an amount of Rs.15,61,101/- with interest @ 9% p.a. from the date of filing of claim till the date of payment or realization.

2. On 11th December 2000, the parties entered into Memorandum of Understanding (MOU). Under the said MOU, the petitioner agreed to pay certain compensation amounts to the respondent for the premises used and occupied.

3. It is the case of the petitioner that there was discussion held on 12th August 2010 between the officers of the respondent and the petitioners wherein the officers of the respondent agreed for one time settlement and agreed to accept 50% of the compensation in full and final settlement of the entire arrears of the petitioners. The petitioners accordingly by its letter dated 16th August 2010 recorded such alleged settlement arrived at between the officers of the respondent and the petitioners and forwarded a cheque of Rs.3,33,960/-. On 28th September 2010, the petitioners handed over the possession of the shop to the respondent.

4. The parties entered into further correspondence in respect of the balance amount. In response to the correspondence addressed by the respondent for recovery of the amount, the petitioners once again contended that the amount is already paid by its letter dated 16th August 2010 in full and final settlement as per the terms orally agreed between the officers of the respondent and the petitioners in the meeting held on 12th August 2010. The dispute arose between the parties. The matter was referred to the arbitration.

5. By the impugned award dated 28th March 2014, the learned arbitrator directed the petitioners herein to pay an amount of Rs.15,61,101/- with interest @ 9% p.a. from the date of filing of claim till the date of payment or realization.

6. Learned counsel appearing for the petitioners submits that though in the meeting held before the learned arbitrator on 4th June 2013, the learned arbitrator recorded the agreement of both the parties that there would be no oral evidence or examination of any witnesses, the learned arbitrator rejected the contents of document dated 29th June 2010 holding that the contents of the said letter did not suggest in support of plea that there was complete accord and satisfaction of the terms orally agreed between the officers of the respondent and the petitioners. It is submitted that the learned arbitrator once having recorded that no oral evidence would be led, he could not have rejected the said document relied upon by the petitioners.

7. Next submission of the learned counsel is that under the MOU dated 11th December 2000 entered into between the parties, it was agreed that the said MOU shall remain in effect for a period of 10 years from the date of Agreement i.e. 11th December 2000. It is further agreed that the terms and conditions of the said MOU would be reviewed mutually at the end of the initial 5 year period. Under clause 12 of the said Agreement, it was agreed that the parties would execute necessary legal documents in the form of Leave and License Agreement for each location/site separately and cost of such documentation including registration and stamp duty would be borne by the petitioners. The term of such Leave and License Agreement would be for a period of 5 years.

8. It is submitted that after expiry of 5 years from the date of execution of the said MOU, though the petitioners identified the shop to be given on leave and license, the parties did not enter into any Leave and License Agreement but continued the arrangement on payment of agreed compensation. Learned counsel submits that since the parties had agreed for execution of a fresh Leave and License Agreement after expiry of 5 years and having failed to execute subsequent agreement, the Arbitration Agreement recorded in paragraph 34 of the said MOU also has come to an end a