Unilateral appointment of an arbitrator without obtaining express consent violates Section 12(5) of the Arbitration and Conciliation Act, rendering the appointment and the resultant award null and void.

COMMON ORDER

These Arbitration Original Petitions have been filed by the petitioners, seeking to set aside the arbitral award dated 22.03.2021 passed in common, by the learned sole Arbitrator.

2. The facts in brief, necessary for disposal of the present petitions, can be stated as under:

2.1. The 1^st petitioner is a partnership concern, engaged in the business of operating and running retail textile outlets in Tamil Nadu, popularly known as 'The Chennai Silks'. The petitioners 2 to 4 are the partners of the 1^st petitioner's concern. The 1^st respondent is a company engaged in the business of developing and operating commercial projects and shopping malls. The respondents 2 and 3 retired from the 1^st petitioner's firm by executing a Partnership Release Deeds dated 11.09.2019 and30.09.2020 respectively.

2.2. According to the petitioners, the 1^st respondent during its course of business decided to develop a Mall viz., 'VR – Chennai' at Anna Nagar, Chennai. The 1^st petitioner also intended to run the e-commerce store and therefore, approached the 1^st respondent to take on lease the space with a carpet area of 34,434 sq.ft, in the mall 'VR Chennai'. The construction of the Mall was completed on 20.04.2018. Thereafter, the parties herein entered into a deed of lease dated 12.09.2018 registered as Doc.No.3779 of 2018, in the Sub-Registrar Office, Anna Nagar. Subsequently, an Addendum to the Lease Deed was executed between the parties on 25.09.2018, wherein certain changes were brought into the terms and conditions of the deed of lease dated 12.09.2018.

2.3. The demised premises were handed over on 05.09.2018, vide possession notice and the lease was to subsist for a period of nine years with a lock-in period of 36 months i.e from 30.11.2018 to 30.11.2021. However, the petitioners terminated the lease deed due to unforeseen circumstances and claimed for refund of interest free refundable security deposit of Rs.75,75,480/- from the 1^st respondent. In reply to the said termination, the 1^st respondent claimed a sum of Rs.11,88,16,397/- towards the rent for the lock-in period and fit out expenses refuting the claim of the petitioners, which led to the invocation of Clause 17.7 (b) of the lease deed that provides for resolution of disputes through Arbitration. The 1^st respondent on 23.01.2019 without obtaining consent of the petitioners, unilaterally appointed the Sole Arbitrator to adjudicate the disputes inter se the parties. Consequently, the Sole arbitrator, vide its letter dated 07.02.2019, sent a communication to the parties fixing a date for preliminary hearing. The 1^st respondent filed a statement of claim and raised total of 5 claims and the petitioners filed their counter statement raising a counter claim. The Sole Arbitrator passed the impugned award dated 22.03.2021 by partly allowing the claims in favour of the 1^st respondent and rejected the counte