The court held that an appellate court can modify an arbitral tribunal's interim order if the appellant demonstrates a prima facie case, balance of convenience, and irreparable harm, while also clarifying the nature of license agreements as operating under permissive licenses.

JUDGMENT

Mini Pushkarna, J.

1. The present appeals have been filed under Section 37(2)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter called "the Act") against the common order dated 23.04.2022 passed by the Arbitral Tribunal disposing of the applications filed under Section 17 of the Act on behalf of appellant and respondents respectively, seeking interim measures.

2. The disputes between the parties relate to the revocation of the licence agreement of the respondents by the appellant. The present appeals deal with different shops situated in the premises of the appellant's hotel, details of which are given herein below:

(i) Arb. A (COMM) 48/2022- Shop No. L-79, Shopping arcade, Hotel Hyatt Regency, Bhikaji Cama Place, New Delhi

(ii) Arb. A (COMM) 49/2022- Shop No. L-78, Shopping arcade, Hotel Hyatt Regency, Bhikaji Cama Place, New Delhi

(iii) Arb. A (COMM) 50/2022- Shop No. L-73, Shopping arcade, Hotel Hyatt Regency, Bhikaji Cama Place, New Delhi

(iv) Arb. A (COMM) 51/2022- Shop No. L-81, Shopping arcade, Hotel Hyatt Regency, Bhikaji Cama Place, New Delhi

3. The appellant and respondents entered into unregistered licence agreements/Supplementary Agreements as follows:

(i) Arb. A (COMM) 48/2022- Unregistered Licence Agreement dated 01.09.1982 read with Supplementary Agreement dated 01.09.1982; Supplementary Agreement II dated 10.08.1984 and Amended Agreement dated 01.09.1983.

(ii) Arb. A (COMM) 49/2022- Unregistered Licence Agreement dated 18.02.1992 and Supplementary Agreement dated 18.02.1982.

(iii) Arb. A (COMM) 50/2022- Unregistered Licence Agreement dated 09.09.1992 and Supplementary Agreement dated 09.09.1992.

(iv) Arb. A (COMM) 51/2022- Unregistered Licence Agreement dated 01.09.1982 and Supplementary Agreements dated 01.09.1982 and 10.08.1984.

4. In terms of the aforesaid agreements, the use of the licensed premises were restricted only to the purposes authorised under the Licence Agreements i.e. for the purpose of carrying on the business of sale of jewellery, arts and handicrafts, in all the cases. Any change in the use of the licensed premises required the prior written permission of the appellant. Under the licence agreements, the respondents had no right to make any alterations or additions to the licensed premises. The respondents required the appellant's prior written permission and approval for the interior decoration of the licensed premises. The respondents further required prior approval of appellant for transfer of any interest or right under the licence agreement.

5. The respondents in all the cases were granted the right to use the licensed premises for a term of 5 years, subject to renewal for further 5 year terms. The appellant retained the right to terminate the licence agreements in terms of Clauses 3(t) and 9 of the respective licence agreements. In return for use of the licensed premises, respondents paid monthly licence fee. Respondents were further required to pay security deposit towards proper maintenance of the premises. Any disputes arising between the parties in relation to the agreement were to be referred to arbitration in terms of Clause 11 of the licence agreements.

6. In Arb. A. (COMM) 48/2022, the licence agreement was last renewed upto 31.08.2017. In Arb. A (COMM) 49/2022, the licence agreement was last renewed upto 28.02.2017. In Arb. A (COMM) 50/2022, the licence agreement was last renewed upto 31.08.2017. In Arb. A (COMM) 51