JUDGMENT

% 23.11.2022 MINI PUSHKARNA, J.

1. The present petition has been filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as „the Act‟) seeking appointment of an arbitrator for adjudication of the disputes that have arisen between the petitioner and the respondent.

2. Petitioner is engaged in the business of building, managing, running and operating multiplex theatres across the country, under various brand names such as „PVR‟, „PVR Premier‟, „PVR Gold Class‟. Respondent is engaged in the business of real estate and development.

3. A Memorandum Of Understanding dated 06.05.2016 was executed between the parties for entering into an arrangement for operating a multiplex having six screens and approximately 1151 seating capacity situated on 3rd and 4th floor of 37th Avenue Mall, Commercial Complex, Sector 37-C, Gurugram, Haryana.

4. As per Clause 7(n) of the MOU, the petitioner was to pay an interest free refundable security deposit to the respondent amounting to Rs.1,65,00,000/-, which was payable in four stages of different amounts as follows:

“1. Rs. 27,50,000/- (Rupees Twenty Seven Lakhs Fifty Thousand only) within 15 days of signing of the MOU.

2. Rs.55,00,000/- (Rupees Fifty Five Lakhs only) to be paid Post Legal due diligence and signing of agreement to lease, which shall be signed after the Developer provides the application for revised Sanctioned Plans.

3. Rs.55,00,000/- (Rupees Fifty Five Lakhs only) to be paid on Handover Date which shall be handed over upon receipt of revised Sanctioned Plans.

4. Rs.27,50,000/- (Rupees Twenty Seven Lakhs Fifty Thousand) to be paid at the time of signing the lease deed, which shall be executed at the time of commencement of commercial operations at Multiplex.”

5. Rs.27,50,000/- was to be given within 15 days of signing of the MOU which was duly paid by the petitioner to the respondent on the execution of the MOU towards security deposit.

6. Clause 7(y) of the MOU provides for resolution of disputes between the parties through arbitration. The said Clause is reproduced as below:

“7(y) Arbitration Any dispute or difference arising between the Parties shall be resolved amicably at the first instance. Unresolved disputes, controversies, contests, disputes, if any, shall be submitted to arbitration. The arbitration shall be conducted in accordance with the Provisions of the Arbitration and Conciliation Act, I996, along with the rules framed there under and any amendments thereto by a sole arbitrator appointed mutually by both the Parties. The arbitration shall be conducted in English. The decision/award of the arbitrator shall be final/conclusive and binding on the Parties. The seat of arbitration shall be at New Delhi.”

7. The MOU provided that the parties shall execute an Agreement to lease within six months from the date of signing of the MOU and execute a lease deed within 60 days of obtaining occupation certificate/ any other document required to get Cinema Operating Licences.

8. Subsequent to the execution of the MOU, a tripartite agreement to lease was executed on 18.01.2017 between the petitioner, the respondent and Prime IT Solutions Pvt. Ltd. (which was the confirming party). Petitioner in terms of Clause 6.1.2 of the Agreement to Lease, paid further amount of Rs.42,87,085/- to the respondent on 25.01.2017. Therefore, total amount of Rs.70,37,085/-

was paid by the petitioner to the respondent towards security deposit.

9. As per Clause 6.3 of the Agreement to Lease, the respondent was liable to refund the security deposit amount within a period of one month from the date of expiry or termination of the Agreement to Lease. In case, any dispute arose between the parties, the same was to be settled through arbitration contained in Clause 14 of the Agreement to Lease. The same is reproduced as below:

“CLAUSE 14. ARBITRATION:

14.1 In the event of any dispute, controversy or claim arising out of or in connection with this Agreement/ Lease