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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Upinderjit Khurana - Appellant
Versus
Sumantu Virmani - Respondent
Arb.P. 620 of 2021
Decided On : 18-08-2021




The court may appoint an arbitrator even when one party fails to attempt amicable resolution, as specified in the arbitration clause.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Lease Dispute - The petition was filed for the appointment of a Sole Arbitrator due to dispute arising from a Lease Deed dated 23.11.2016, with a total outstanding amount claimed of Rs.16,31,539/- - The respondent did not dispute the execution of the Lease Deed but contested the claims made - The court held that the absence of attempts for amicable resolution by the respondent does not impede referral to arbitration. (Paras 1-8)

(B) Jurisdiction - The court rejected the argument regarding lack of jurisdiction, affirming that the arbitration would be conducted in New Delhi as stipulated in the arbitration clause of the Lease Deed, indicating no clause specifying another venue. (Paras 9-10)

(C) Amicable Resolution - The court expressed support for resolving disputes amicably but noted the respondent’s failure to engage meaningfully in such attempts. (Paras 8, 11)

Table of Content
1. petition for appointment of sole arbitrator. (Para 1 , 2 , 3 , 4)
2. respondent disputes lease terms but accepts agreement. (Para 5 , 6)
3. challenges to arbitration based on amicable resolution and jurisdiction. (Para 7 , 8 , 9)
4. court defers appointment of arbitrator to encourage resolution. (Para 10 , 11 , 12)
5. next steps regarding arbitrator's consent and hearing. (Para 13 , 14)

JUDGMENT

[Hearing held through video conferencing]

Vibhu Bakhru, J. (ORAL)--The petitioner has filed the present petition under Section 11 (6) of the Arbitration and Conciliation Act (hereafter the `A&C Act'), inter alia, praying that a Sole Arbitrator be appointed to adjudicate the disputes between the parties arising out of the Agreement/Lease Deed dated 23.11.2016.

2. The parties had entered into Lease Deed dated 23.11.2016. In terms of the said Lease Deed, the petitioner had leased the premises located at Property No.3, New Haridwar Colony, Ranipur More, Haridwar-249407 to the respondent.

3. Concededly, disputes have arisen between the parties in respect of the said Lease Deed. The petitioner had issued a notice dated 22.03.2021, inter alia, calling upon the respondent to handover vacant possession of the demised premises on or before 31.05.2021 and also pay the outstanding amount quantified at Rs.16,31,539/-.

4. The aforesaid notice was followed by another notice dated 04.06.2021 as the respondent had neither complied with the demands made by the petitioner nor responded to the notice dated 22.03.2021. In terms of the notice dated 04.06.2021, the petitioner also invoked the Arbitration Clause as included in the Lease Deed dated 23.11.2016 and appointed a former Additional Sessions & District Judge, Delhi, as the Sole Arbitrator.

5. The respondent responded to the said notice through its advocate contesting the claims made, on several grounds, including disputing the lease rent payable under the Lease Deed. However, the respondent did not dispute the execution of the Lease Deed.

6. The Lease Deed, in question, contains an arbitration clause that reads as under:

    "28 Disputes & Arbitration

    In the event of any dispute or difference between the Parties arising out of or in connection with this Agreement or with regard to performance of any obligations by either Party, the parties hereto shall use their best efforts to resolve such dispute or difference amicably by mutual negotiations.

    All disputes arising in connection with the Agreement which have not been amicably settled shall be referred to a Sole Arbitrator appointed jointly by both the Parties and the proceedings will be conducted as per the provisions of the Arbitration and Conciliation Act, 1996 (with such statutory amendment/ modification thereof). The arbitration shall be conducted and the reasoned award shall be rendered in English language and the venue of such Arbitration shall be at New Delhi.

    The award shall be reasoned award and shall be final and binding on all the parties."

7. Mr Bindra, the learned senior counsel appearing on behalf of the respondent does not dispute the existence of the agreement to refer the disputes arising out of the Lease Deed to arbitration in terms of clause 28 of the Lease Deed. However, he has opposed the petition on two grounds. First, he submits that the parties have not made sincere endeavors to resolve the disputes amicably and failure of such endeavours is a pre-condition for referring the disputes to arbitration. Second, he submits that this Court would have no jurisdiction to entertain the present petition as the leased property in question is in Haridwar and the respondent is also a permanent resident at Haridwar.

8. Both the contentions are unmerited. The respondent has not taken any steps to initiate steps for an amicable resolution of the disputes even after the legal notice dated 22.03.2021 was served on the respondent. Thereafter, the respondent's response dated 26.06.2021 to the notice dated 04.06.2021 also l

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