An arbitrator is bound by the express terms of the contract and cannot rewrite it or deviate from its provisions. An award that ignores the contract, considers unpleaded facts, or is contrary to evidence on record suffers from patent illegality and is liable to be set aside.

ASHWANI KUMAR MISHRA, J.

Jurisdiction of this Court under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) is invoked by M/s Aditya Birla Fashion and Retail Ltd. (hereinafter referred to as the ‘appellant’) in order to assail the order passed by the Exclusive Commercial Court at Gurugram, dated 22.08.2025, whereby appellant’s objection under Section 34 of the Act of 1996 to the Arbitral Award dated 23.12.2023, came to be rejected.

Appellant is a company incorporated under the Indian Companies Act, 1956. It is engaged in the business of ‘apparels’, marketing of garments and garment accessories under various international brand names and trademarks such as ‘Van Heusen’, ‘Louis Philippe’, ‘Allen Solly’, ‘Peter England’ etc. It intended to establish a warehouse for storage of its products at Gurugram. For such purposes, the appellant entered into an agreement with the claimant/respondent, who was the owner in possession of Khasra No.130/19, 12, 20, 21, 22, 23, 18/2 and 131/25, admeasuring 16674 sq. meters situated in village Pataudi, Ward No.13, Rewari Road, Tehsil Pataudi, Gurugram along with his brothers Ramesh Chand, Bhanu Sherawat (son of late brother of Dayanand) and Naresh Kumar. Plan for construction of the warehouse on the aforesaid land of the claimant was already approved by the concerned authorities in the year 2012-2013. Commercial godown in the name of ‘Misha Sehrawat Warehouse’ was constructed over an area admeasuring 103982.72 sq. feet (9660.31 sq. meters) allegedly by incurring an amount of INR 8.62 Crores. A loan of Rs.6 Crores was also availed by the claimant from Punjab National Bank, for such purpose, which was repayable in 93 equal installments of Rs.5,16,563/- per month commencing from 30.09.2015. Rest of the amount i.e. approximately Rs.2.62 Crores was incurred by the claimant for construction of warehouse.

Finally, a lease deed came to be executed on 20.04.2016 in respect of the leased premises by the claimant/respondent in favour of the appellant at a monthly rent of INR 10,00,000/- with a clause providing for 5% escalation after expiry of one year, commencing from 01.05.2016. The appellant also deposited INR 60,00,000/- with the respondent as interest free refundable security. Under the lease deed, the appellant had the right to install, erect and maintain, at its own cost, in or upon the leased premises, any equipment, machinery or any other structure necessary for the purposes of storing, selling or otherwise carrying on trade in consumer products, allied or other products. The leased godown had carpet area of 103982.72 sq. feet. The lease period was nine years commencing from 01.05.2016 to 30.04.2025.

Respective rights and obligations of the parties to the lease have been specified in the lease deed. Clause 13 of the lease deed placed responsibility upon the lessor/claimant-respondent to insure the entire building premises and all equipments provided to lessee, against fire and other perils including earthquake and terrorism etc., during the entire lease period. The responsibility of lessee was limited to insuring of its own goods and equipments etc. during the lease term. Clause 13 is reproduced herein after:-

“13. INSURANCE:

The Lessor shall at all times be responsible for insuring the entire building premises and all equipments provided to Lessee against Fire and other perils including Earthquake and Terrorism, covering the third party liability against all risks at all times and kept valid during the subsistence of the Lease and a copy of such insurance coverage policy shall be made available to Lessee as and when such insurance policy is renewed from time to time without demand by Lessee. Lessee sh