2025 Supreme(Online)(Ker) 58345
IN THE HIGH COURT OF KERALA AT ERNAKULAM
S.MANU, J
M/S.NARMADA CONSUMER STORES (P) LTD. – Appellant
Versus
M/S. NARMADA TAILORING & EMBROIDERY INSTITUTE – Respondent
AR NO. 189 OF 2025
For the Appellants/Petitioners: SRI.M.SREEKUMAR
For the Respondents: SHRI.M.R.ANANDAKUTTAN, SMT.M.HEMALATHA, SRI.MAHESH ANANDAKUTTAN, SMT.DONA AUGUSTINE
The court emphasizes that in applying Section 11 of the Arbitration Act, jurisdiction is limited to affirming the existence of an arbitration clause; disputes are for the Arbitrator to resolve.
Headnote:This arbitration request concerns issues arising from a license agreement dated 01.04.1996 between the parties. The applicant seeks arbitration due to the respondent's non-compliance with the agreement. The court determined that a valid arbitration clause exists, directing the appointment of an Arbitrator under the Kerala High Court Arbitration Centre Rules. The court left disputes for the Arbitrator's determination. The request was disposed of with directions for the nomination of an Arbitrator and communication procedures.
| Table of Content |
|---|
| 1. overview of the arbitration dispute and license agreement details. (Para 1 , 2) |
| 2. legal history and appeal context established. (Para 3 , 4) |
| 3. judicial limits in arbitration references and validity of clauses affirmed. (Para 8 , 9) |
| 4. court’s directions specified for arbitration proceedings. (Para 10) |
JUDGMENT
This arbitration request is filed by a Private Limited Company. It owns northern block of a commercial complex building named as “Narmada Shopping Complex” situated at Kowdiar, Thiruvananthapuram. The applicant and the 1st respondent were licensor and licensee. The 2nd and 3rd respondents are the partners of the 1st respondent agreement was executed by the 1st respondent with the applicant on 01.04.1996 for a period of three years in respect of a specified area mentioned in the agreement having an extent of 46 sq.m. in the ground floor of North Block of the Shopping Complex to conduct a specified business.
2. According to the applicant, the 1st respondent neglected to perform the conditions in the license agreement and a registered notice was issued on 01.08.1998 for termination of the license agreement. It resulted in filing O.S.No.1830/1998 by the 1st respondent and some others for permanent prohibitory injunction against eviction. O.S.No.2370/1998 was filed by the applicant seeking eviction of the 1st respondent and others. The suits were tried together by the Addl.Munsiff’s Court (Rent Control Court), Thiruvananthapuram. O.S.No.2370/1998 was dismissed and O.S.No.1830/1998 was allowed. A.S.Nos.168/2009 and 170/2009 were filed before the District Court against the judgments of the learned Munsiff. The Appellate Court, in view of the arbitration clause in license agreement set aside the judgments and remanded the matter to Trial Court so as to enable the Trial Court to refer the parties for arbitration. The said remand was challenged before this Court in FAO (RO) Nos.350/2013, 353/2013 and 5/2014. This Court remanded the appeals to the Appellate Court for fresh consideration, in accordance with law. A copy of the common judgment of this Court dated 25.01.2022 is produced as Annexure A3.
3. Subsequently, the appeals were heard afresh and the judgments of the Trial Court were reversed by the Appellate Court. Respondents and others were directed to vacate the building. A copy of the judgment of the Addl.District Court, Thiruvananthapuram, is produced as Annexure A4. RSA Nos.114/2025 and 119/2025 were filed by the 1st respondent against Annexure A4. Those appeals are pending before this court.
4. Later, the applicant issued notice seeking compensation for wrongful occupation of the building after termination of the arrangement. The 1st respondent did not yield to the demand. Therefore, the arbitration clause is invoked by the applicant and reference to Arbitrator is sought in this arbitration request.
5. Notice was issued and respondents have entered appearance.
6. It is contended by the learned counsel appearing for the respondents that this request is not maintainable and no claim would lie against the parties on account of the principles of res judicata and waiver.
7. Heard the learned counsel for the applicant and the learned counsel appearing for the respondents.
8. Various contentions have been raised in this arbitration request and those contentions have been refuted on merits by the learned counsel appearing for the respondents. In an application under Section 11 of the Arbitration and Conciliation Act , 1996, it is not within the domain of this Court to enter upon the merits of the disputes and make any observations and render findings. It is well settled that such aspects are to be left to the Arbitrator to consider. It is apposite to refer to the following observations of the Hon’ble Supreme Court in Arabian Exports Private Limited v. National Insurance Company Ltd. [2025 SCC OnLine SC 1034], which reads as under:-
“ 40. Thus, the doctrine of Kompetenz – Kompetenz is now firmly embedde