The COVID-19 lockdown is recognized as a force majeure event affecting contractual obligations, necessitating equitable treatment for parties under similar circumstances.

JUDGMENT

Sanjeev Narula, J. (Oral)--Pursuant to the order dated 2nd May, 2022, Ms. Mini Pushkarna, counsel for North Delhi Municipal Corporation [hereinafter, "NDMC"], states on instructions that she is agreeable if the Court were to appoint an Arbitrator in the instant petition. Ms. Manmeet Arora, counsel for the Petitioner, is also agreeable to the same.

2. Although the present petition is under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"], the Court is inclined to accept the request for appointment of arbitrator since there is a consensus between the parties. That said, existence of arbitration agreement between the parties in terms of Clause 28.2 of the License Agreement which forms part of the Tender document dated 22nd April, 2016, is not in dispute. Accordingly, parties are referred to arbitration before Hon'ble Mr. Justice (Retd.) Rajiv Sahai Endlaw, former judge of this Court [+91-9717495002] for adjudication of disputes arising from the Tender document and Allotment Letter dated 17th June, 2016.

3. The parties are directed to appear before the Sole Arbitrator as and when notified. This is subject to the Arbitrator making necessary disclosure(s) under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.

4. The Arbitrator appointed by the Court shall fix their fee in consultation with counsel for the parties. Both the parties shall be free to raise their claims/counter-claims before the Arbitrator in accordance with law.

5. In view of the above, since the Arbitral Tribunal is now in place, the only question before the Court is qua interim measures to be granted. In fact, on this aspect, Mr. Arora has stated that the instant petition itself can be treated as one under Section 17 of the Act - which can now be adjudicated by the Arbitral Tribunal. However, she prays for an interim arrangement pending consideration of the application by the Arbitrator, in view of the emergent situation arising from NDMC's impugned action - threatening to cancel the contract between the parties.

6. Accordingly, it is directed that the instant petition will be decided by the Arbitral Tribunal treating it as one under Section 17 of the Act. NDMC is permitted to file a reply/response to the said petition within a period of four weeks from today.

7. Pending adjudication by the Arbitral Tribunal, interim measures are necessary since NDMC has issued a Demand Notice dated 26th April, 2022, whereby it has threatened to cancel the contract, forfeit the security deposit and blacklist the Petitioner. On this issue, Ms. Manmeet Arora as well as Ms. Pushkarna have been heard at length.

FACTS

8. Briefly stated, the Petitioner-P.K. Advertising Services Pvt. Ltd., vide Allotment Letter dated 17th June, 2016, was awarded a contract for allotment of exclusive advertisement rights at various advertisement sites in Civil Line Zone, Cluster No. 1 of NDMC [hereinafter, "the Contract"]. This was subject to payment of a monthly license fees for an initial period of three years - which was extendable for a further period of four years. The contract is subsisting and is valid up to 16th June, 2023.

9. Disputes have arisen on account of Petitioner's invocation of the provision for force majeure (Clause 18 of the License Agreement). Petitioner claims the period of lockdown imposed by the Government viz. from 16th April, 2021 to 30th June, 2021 to be a force majeure event, owing to which, it should be excused from fulfilling its obli