The court affirmed that the inquiry under Section 11(6) of the Arbitration Act is restricted to the existence of an arbitration agreement, allowing disputes to proceed to arbitration without mandatory pre-arbitral resolutions where previous attempts have been made.

JUDGMENT :

MINI PUSHKARNA, J.

1. The present petition has been filed on behalf of the petitioner under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) seeking appointment of a Sole Arbitrator in terms of the arbitration clause, i.e. Clause 15 (b) of the Lease Deed dated 15^th November, 2022 (“Lease Deed”) which provides for adjudication of disputes between the parties by arbitration.

2. Facts of the case, as canvassed in the petition, are as follows:

2.1 The petitioner is a private limited company engaged in the business of real estate development, including, construction of integrated townships, residential apartments, commercial spaces, hotels and related infrastructure across India.

2.2 The respondent is a private company engaged in the business of operating and managing hotels in association with third party brands in the hospital sector.

2.3 The petitioner is in the process of constructing and developing a commercial complex in the name and style of „Beacon Street‟, on approximately seven acres of land situated at Village Bharonjian, Tehsil- Kharar, S.A.S. Nagar, Mohali-160055, Punjab (“Project”). For the purposes of the said Project, the respondent approached the petitioner, seeking lease of approximately, 1,75,000 sq. ft. of super area being Unit no. S. Suite Floors Nos. 19^th to 28^th of the Project (“Demised Portion”), to operate and manage the said area as a branded hotel.

2.4 In view of the above, the parties entered into a Lease Deed dated 15^th November, 2022, by way of which, the Demised Portion was leased to the respondent, and the respondent was to enter into another agreement with a reputed hotel for operation of the same in the Demised Portion of the Project.

2.5 As per Clause 4.1 and Annexure-II of the Lease Deed, the respondent was to provide technical and pre-opening services, and towards the same, the petitioner had agreed to pay a onetime lump sum amount of Rs. 3,30,00,000/- to the respondent, towards applicable sign-up fees, including, brand association fees and for the technical and pre-opening services.

2.6 Consequently, as per Clause 8 (I)(a) of the Lease Deed, the petitioner paid to the respondent a sum of Rs. 1,65,00,000/- along with applicable Goods and Service Tax (“GST”) of Rs. 29,70,000/-, totalling to Rs.1,94,70,000/-, as an advance payment.

2.7 Due to the non-performance of obligations by the respondent, the petitioner sought for refund of the advance amount, i.e., Rs. 1,94,70,000/-, paid to the respondent, towards which only Rs. 50,00,000/-, was refunded and an amount of Rs. 1,44,70,000/- remained to be refunded by the respondent.

2.8 Due to the continuous breach of the Lease Deed and on account of non-payment of pending advance amount, the petitioner issued a notice dated 22^nd August, 2025 and sought for refund of the remaining advance amount along with damages. Since, the said amounts were not paid to the petitioner, the petitioner was constrained to invoke arbitration under Section21 of the Arbitration Act.

2.9 The respondent has not replied to the notice dated 22^nd August, 2025. Admittedly there exists a clear dispute between the parties, therefore, as per the valid arbitration clause, i.e., Clause 15 of the Lease Deed, and there being no alternative remedy, the petitioner has filed the present petition.

3. The present petition has been opposed by the respondent on the grou