High Court of Punjab and HaryanaARB/161/2016allowed

M/S Shalimar Estates Pvt Ltd v. Inox Leisure Ltd

2018-01-29Mr. Justice M.M. Aggarwal7 pages

IN THE HIGH COURT OF PUNJAB & HARYANA AT

CHANDIGARH Arbitration Case No. 161 of 2016 (O&M) Date of Decision: 29.01.2018 M/s Shalimar Estates Pvt. Ltd.

.....Petitioner versus Inox Leisure Ltd.

.....Respondent

Present :

Mr. Prateek Gupta, Advocate, for the petitioner. Mr. Rohit Khanna, Advocate, for the respondent. **** This is an application under section 11(6) of the Arbitration and Conciliation Act, 1996 for the appointment of sole arbitrators in respect of two contracts each of which contains an arbitration clause. 2.

The parties entered into a lease deed dated 12.02.2009 under which the petitioner leased the premises in favour of the respondent on the terms and conditions contained therein. Clause 14 thereof reads as under:<

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The parties entered into an EME Usage agreement also dated 12.02.2009 under which the petitioner granted the respondent various electro mechanical and other equipment facilities which it intended installing and operating for the benefit of the respondent. Clause 12 thereof reads as under:<

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Disputes and differences having arisen between the parties, the petitioner by a letter dated 14.06.2016 invoked the arbitration agreements in respect of both the contracts.

The respondents firstly submit that the petitioner invoked the arbitration clause only in respect of the lease agreement and not in respect of the EME agreement. This would be a rather technical and narrow reading of the letter of invocation. It is true that the letter of invocation specifically refers to clause 14.2.1 of the lease deed and does not specifically refer to arbitration clause No.12 under the EME agreement. The letter, however, refers to the amounts due towards rent as

well as EME charges. The subject of letter itself states that it is a notice for appointment of a sole arbitrator to invoke the arbitration proceedings regarding settlement of claims "towards rent, EME charges, CAM charges, electricity charges and other claims". Thus the claim is in respect of both the agreements. Merely because only clause 14.2.1 of the lease deed is referred to and clause 12 of the EME agreement is not referred to, it would make no difference. Similarly, the body of the letter also refers to the petitioner's claim for rent, EME charges, CAM charges, electricity charges and interest on delayed payments in more than just one place. Again the reference to clause 14.2.1 and not to clause 12 does not make a difference. In fact even if the number of arbitration clause is not stipulated in a notice invoking arbitration, it would make no difference. It would still be a valid invocation of the arbitration agreement.

It was then submitted that as far as the lease deed is concerned, the arbitration clause cannot be relied upon as it is not registered.

Whether the deed is required to be registered or not and if required to be registered the effect of non<registration are issues to be decided by the arbitrator. The arbitration clause is distinct from the underlying contract between the parties. This issue is decided in favour of the petitioner by a judgment of the Supreme Court in

It is important to note that in that case two objections were raised, namely, that the document though compulsory registerable was not registered and that the document had not been duly stamped. The

two defects were dealt with separately. I am concerned with the judgment in so far as it relates to the effect of non<registration of a document that is compulsorily registerable. The Supreme Court held:< 2

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It is important to note that despite all the observations, in conclusion the Supreme Court remitted the matter to the learned Chief Justice of the Gauhati High Court to decide the issue of stamp duty but not the issue of registration. It follows, therefore, that the issue of registration must be left to the arbitrator. It is clear, therefore, that non< registration of a document is not fatal to an application under section 11 of the Act for the appointment of an arbitrator. Whether the petitioner would be entitled to substantiate its claim, even without a reference to the

document, is for the arbitrator to decide. This is not as open and shut a case as the respondent contends. I do not wish to express any view or even suggest the submissions that may fall for the consideration of the arbitrator. It is for the petitioner to raise and for the arbitrators to decide the same.

The respondents reliance upon a judgment of a learned Single Judge of this Court in !

" # $ %& # is not well founded. It is true that the learned Judge in a similar matter observed that no doubt an arbitrator can be appointed but that would be an exercise of futility. However, it was not suggested in that case that the claim could nevertheless be established and that whether or not it is so established it is for the arbitral tribunal to decide. 10.

The petition is, therefore, disposed of by appointing Mr. Justice S.S.Saron, a former Judge of this Court, as the sole arbitrator to adjudicate upon the disputes and differences between the parties. The fees shall be as per the Chandigarh Arbitration Centre (CAC) (Administrative Cost and Arbitrator's Fees) Rules, 2014. The venue of the arbitration shall be the Chandigarh Arbitration Centre 29.01.2018 ravinder Whether speaking/reasoned √Yes/No Whether reportable √Yes/No