IN THE HIGH COURT OF DELHI AT NEW DELHI
Suresh Kumar Kait, J.
Greesh Kumar Bansal & Anr. - Appellantss
Versus
Asian Hotels (north) Limited - Respondent
Arbitration Petition No. 97 of 2022
Decided On : 21-02-2022
Arbitration - Lease Agreement - Appointment of Arbitrator
Fact of the Case:
The petitioner filed a petition seeking appointment of an arbitrator for adjudication of disputes arising from a lease agreement due to the respondent's unilateral termination of the agreement during the Covid pandemic period.
Finding of the Court:
The court allowed the petition and appointed a former Judge of the High Court as the sole arbitrator to adjudicate the dispute between the parties.
Issues: Dispute arising from unilateral termination of lease agreement, appointment of arbitrator
Ratio Decidendi: The court relied on Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator and ensure compliance with Section 12 of the Act before commencing the arbitration.
Final Decision: The petition was allowed, and the former Judge of the High Court was appointed as the sole arbitrator to adjudicate the dispute.
JUDGMENT
Suresh Kumar Kait, J. - The present petition has been filed by the petitioner under Section 11(6) of the arbitration and Conciliation act, 1996 seeking appointment of arbitrator for adjudication of disputes with respondent arising out of Lease agreement dated 13.02.2020.
2. Petitioners, who are husband and wife, claim to have entered into a Lease agreement in respect of Service apartment No. 2002, Second Floor, Block-a, New Tower Block, Hotel Hyatt Regency, New Delhi on a rental for Rs.4,91,000/- p.m. with applicable taxes, for a period of seven years.
3. Petitioners have claimed that in terms of Clause 12.2 of the Lease agreement stipulates that the agreement cannot be terminated during subsistence of lock-in period i.e. for seven years and thereafter too, upon furnishing of a six months advance to the lessor. Clause-15.2 of the Lease agreement contains the force majeure clause and Clause-15.4 contains the Dispute Resolution Clause.
4. Petitioner further claims that during the Covid pandemic period, the respondent stopped paying rent to the petitioner from 01.04.2020 and respondent vide notice dated 20.07.2020 unilaterally terminated the Lease agreement and handed over the key of the apartment only on 17.08.2020. a legal notice dated 10.11.2020 was sent by the petitioners to the respondent and invoked arbitration and in terms of Clause 15.4 of the Lease agreement, proposed names of three arbitrators. In reply to the said legal notice, vide letter dated 21.12.2020, respondent refused to consent to the names proposed by the petitioners and rather, proposed names of two arbitrators. Petitioner with a view to resolve the disputes, accepted name of one arbitrator proposed by the respondent vide letter dated 23.03.2021 and requested the respondent to commence the arbitral proceedings. Respondent vide letter dated 16.06.2021 responded to the consent letter and sent documents for commencing arbitration. However, despite repeated requests the respondent failed to appoint sole arbitrator and commence arbitration.
5. Mr. Siddhanth Kumar, advocate, has entered appearance on behalf of respondent and submits that the claims raised in the present petition are disputed. Learned counsel submits that in similar other matters, a Coordinate Bench of this Court in aRB.P.579/2021, vide order dated 23.07.2021 has appointed Hon'ble Mr. Justice (Retd.) Pankaj Kumar Jaiswal to arbitrate on the disputes between the parties and so, the same arbitrator be appointed in this case as well.
6. Learned counsel appearing on behalf of petitioner has also consented to the appointment of Mr. Justice (Retd.) Pankaj Kumar Jaiswal in the present petition.
7. The present petition is accordingly allowed and Mr. Justice (Retd.) Pankaj Kumar Jaiswal (Mobile: 09425155450), a former Judge of the High Court of Judicature at allahabad, is appointed the sole arbitrator to adjudicate the dispute between the parties.
8. The fee of the learned arbitrator shall be governed by the Fourth Schedule of the arbitration and Conciliation act, 1996.
9. The learned arbitrator shall ensure compliance of Section 12 of arbitration and Conciliation act, 1996 before commencing the arbitration.
10. The present petition is accordingly disposed of.
The court applied the provisions of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator and ensure compliance before commencing the arbitration.
The court appointed an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, reaffirming that disputes regarding lease agreements and arbitration initiation can be resolved th....
The court held that disputes arising from a lease agreement, including claims related to force majeure, should be resolved through arbitration when both parties consent to arbitration.
The main legal point established is the court's authority to appoint a Sole Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 to resolve disputes related to lease agreements.
Where a party defaults on contractual obligations and fails to contest a petition for arbitration, the court may appoint a sole arbitrator to adjudicate the dispute.
Appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 in cases of serious breach of lease terms.
The court upheld its jurisdiction to appoint an arbitrator in landlord-tenant disputes based on an arbitration clause, affirming party autonomy in jurisdictional matters despite objections.
The court held that arbitration must be initiated if disputes remain unresolved, particularly when both parties accept the need for arbitration, affirming the provisions of the Arbitration and Concil....
The court affirmed the validity of invoking arbitration under the lease agreement, emphasizing the necessity for resolution of disputes through arbitration as per agreed terms.
The court held that financial hardship cannot prevent arbitration based on a valid arbitration agreement if an arbitrable dispute is present.
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