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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Fleur Hotels Private Limited - Petitioner
Versus
Hind Inns and Hotels Ltd. and Others - Respondents
ARB.P. 131 of 2023
Decided On : 17-04-2023
Arbitration - Lease Dispute - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioner, Fleur Hotels Private Limited, sought the appointment of a Sole Arbitrator to adjudicate disputes arising from a Lease Deed with M/s. Hind Inns and Hotels Ltd. and M/s. Hind Motors. The disputes arose due to the outbreak of Covid-19 and the subsequent termination of the Lease Deed.
Finding of the Court:
The court appointed Justice (Retd.) Shiva Kirti Singh as the sole arbitrator to adjudicate the disputes between the parties and directed compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996. The court also ordered the parties to appear before the arbitrator within 10 days and kept all contentions of the parties open.
Issues: Appointment of Sole Arbitrator, Compliance with Arbitration and Conciliation Act, 1996
Ratio Decidendi: The disputes between the parties were found to be arbitrable in nature, and the court appointed a sole arbitrator to resolve the disputes in accordance with the Arbitration and Conciliation Act, 1996.
Final Decision: The petition was disposed of with the appointment of the sole arbitrator and directions for compliance with the Act.
ORDER :
Chandra Dhari Singh, J.
The file is taken up today as 14th April, 2023 was declared as a public holiday on account of Birthday of Dr. B.R. Ambedkar.
2. The instant petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act, 1996”) has been filed on behalf of the petitioner seeking appointment of a Sole Arbitrator to adjudicate the disputes between the parties.
3. The petitioner is Fleur Hotels Private Limited having its registered office at Asset Area 6, Aerocity Hospitality District, New Delhi, 110037. The respondents are M/s. Hind Inns and Hotels Ltd. and M/s. Hind Motors their registered office at 15, Industrial Area, Phase I, Chandigarh, 160002 and Delhi International Arbitration Centre (DIAC).
4. The parties executed a Lease Deed dated 25th April 2019, for the efficacious running of ‘Red Fox Hotel’ located at 15, Industrial Area, Phase 1, Chandigarh, for 30 years w.e.f. 1st June 2016. According to Clause 30.1 of the said Deed dated 25th April 2019, respondent no. 3 was entrusted with the responsibility for the appointment of the sole arbitrator in case of any dispute between the parties.
5. After the execution of the Lease Deed, the Petitioner came into possession of the premises and started the operations of the hotel. However, due to the outbreak of Covid-19, a nationwide lockdown was imposed and the hotel industry was completely shut down. The said force majeure event led to a dispute between the parties and the petitioner terminated the Lease Deed dated 25th April 2019 vide Notice dated 24th May 2020 and issued various notices to the Respondent No. 1 and 2 requesting them to refund the Security Deposit of INR 10,00,00,000/- and an additional Security Deposit of INR 1,47,35,650/- totalling INR 11,47,35,650/-.
6. The petitioner addressed another letter dated 8th June 2020 to the respondents No. 1 and 2 whereby the petitioner conveyed its willingness to vacate and handover the possession of the premises on 12th June 2020 and once again sought refund of the security deposit.
7. Thereafter, the respondents No. 1 and 2 sent a Termination Notice dated 22nd December 2020. The petitioner contested the validity of the Termination Notice dated 22nd December 2020 by way of reply dated 14th January 2021 and advised the respondents no. 1 and 2 to withdraw the said purported Termination Notice. However, no reply was received from the respondents No. 1 and 2.
8. The respondents no. 1 and 2 sent a Legal Notice dated 6th March 2021 invoking Arbitration under Article 30.1 of the Lease Deed addressed to respondent no. 3 and the Petitioner. Respondents no. 1 and 2 sent a request for Arbitration to respondent no. 3 under Rule 4.2 of the Delhi International Arbitration Centre (Arbitration Proceedings) Rules, 2018 dated 9th March 2021. Article 30.1 of the Lease Deed has been enclosed below:
Any dispute or difference arising between the parties hereto regarding the construction, meaning or effect or obligation of the parties hereto under this Deed or any article thereof or matter or thing herein contained or as to the rights and liabilities of the parties hereto shall be referred to Arbitration in accordance with the provisions of Arbitration and Conciliation Act, 1996, or any statutory modifications or re-enactment for the time being in force. The Delhi International Arbitration Centre, New Delhi, will appoint the Sole Arbitrator and will conduct the Arbitration in accordance with its rules for conduct of Arbitration proceedings then in force and applicable to the proceedings. The seat and venue of arbitration shall be New Delhi, India. The proceedings shall be undertaken in English. The arbitration award shall be final and binding on the parties. Subject to the aforegoing, the courts at New Delhi alone shall have the jurisdiction in relation to the disputes as mentioned herein before.”
9. The petitioner issued a Notice dated 27th September 2022 to the respondents No. l and 2 al
The court's decision emphasized the arbitrability of the disputes and the appointment of a sole arbitrator in accordance with the Arbitration and Conciliation Act, 1996.
The court emphasized the need for adherence to arbitration clauses in agreements and proceeded to appoint a Sole Arbitrator for the resolution of disputes stemming from a Lease Deed.
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 applied the provisions of the Arbitration and Conciliation Act, 1996 to appoint an arbitrator and ensure compliance before commencing the arbitration.
The central legal point established in the judgment is the appointment of a Sole Arbitrator in accordance with the arbitration clause, the objection to unilateral appointment, and the agreement betwe....
The importance of consent of both parties in appointing an arbitrator and the interpretation of Section 10 of the Arbitration and Conciliation Act, 1996.
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.
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