Black Heron Value Growth LLP vs. Italix Living Spaces Private Limited

This Civil Miscellaneous Petition is filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) seeking for the appointment of the sole arbitrator in terms of clause 7.10 of Black Heron Agreement for sale dated 26.10.2020 vide Annexure-E r/w clause 7.10 of Spoonbills Agreement for sale dated 26.10.2020 vide Annexure-F r/w clause 7 of the Framework Agreement dated 08.03.2021 vide Annexure-G r/w clause 15 of the Deed of Guarantee dated 08.03.2021 vide Annexure J and r/w clause 5.2 of Coupon Servicing Agreements dated 08.03.2021 vide Annexures K and L for resolving the disputes between the parties to the petition.

Brief facts, leading rise to the filing of this Petition are as follows: HC-KAR NC: 2026:KHC:5033

Respondent No.1 entered into an Agreement for sale without possession with Petitioner No.1 regarding the commercial space on 6th floor of Ozone chamber building for a total consideration of Rs. 56,45,13,350/-. On 31.10.2020 as per clause 3.2 of the said agreement, petitioner No.1 paid an Advance Consideration of Rs.4,46,42,857/- to Respondent No.1 along with GST amounting to Rs. 53,57,143/- (aggregating to Rs.5,00,00,000/-). Further, on 08.04.2021 and 12.04.2021, petitioner No.1 paid further sum of Rs. 19,46,42,858/- along with GST of Rs.2,33,57,152/- as a part of overall sale consideration regarding 6th floor premises.

Respondent No.1 also entered into an Agreement for sale without possession dated 26.10.2020 with petitioner No.2 regarding 7th floor Ozone Chambers Building for a total consideration of Rs. 56,21,83,000/-. On 31.10.2020 as per clause 3.2 of the said Agreement, petitioner No. 2 paid an HC-KAR NC: 2026:KHC:5033 advance consideration of Rs.40,17,85,714/- to Respondent No.1 along with GST amounting to Rs.4,82,14,286/- (totally amounting to Rs.45,00,00,000/-). As per the terms of the above said agreement for sale Respondent No.1 was under obligation to complete the construction work within the stipulated time.

Further, the petitioners and Respondent No. 1 along with Respondent No. 2 (guarantor for Respondent No. 1) entered into a Framework Agreement dated 08.03.2021 summarizing the broad framework of proposed transactions. In furtherance of broad understanding set out in the Framework Agreement various agreements came to be entered into between the parties to the petition. It was agreed that the respondents would pay the quarterly interest on sale consideration paid by the petitioners. The Respondents neither made any interest payments nor delivered both the properties. HC-KAR NC: 2026:KHC:5033 The petitioners issued multiple emails and letters seeking payment of accrued interest. Thereafter, in late 2024 and early 2025 the petitioners came to know about the various proceedings which are being faced by the Respondents and the dealing entered into by the Respondents regarding the subject lands.

The petitioners filed an Arbitration application in A.A. No. 118/2025 under section 9 of the Act seeking various interim reliefs against the respondents. The trial court granted ex parte ad interim reliefs restraining the respondents from alienating the subject immovable properties. In furtherance to the above, the petitioners invoked the arbitration clauses incorporated in various agreements, by issuing the Arbitration notice dated 13.05.2025 and proposed the name of the Arbitrator. However, the Respondents neglected to respond to the Arbitration Notice. Hence, this petition. HC-KAR NC: 2026:KHC:5033

Heard the arguments of the learned counsel for the petitioners and the learned counsel for the respondents.

Learned counsel for the petitioners submits that the parties to the petition have entered into multiple agreements which incorporate the Arbitration clause. He submits that the arbitral dispute has arisen between the parties to the petition, the petitioners invoked the arbitration clause by issuing the Arbitration notice and the same has to be resolved by appointing the sole arbitrator. Accordingly, on these grounds, prays to allow the petition.

Per contra, learned counsel for the Respondents submits no objection in appointing the Arbitrator to resolve the dispute between the parties to the petition. Accordingly, prays to dispose of the petition. HC-KAR NC: 2026:KHC:5033

Perused the records and considered the submissions of the learned counsel for the parties.

The point, that would arise for consideration is as follows: “Whether the petitioners made out a ground to refer the dispute to the Arbitration in terms of clause 7.10 of Black Heron Agreement for sale dated 26.10.2020 vide Annexure E R/w clause 7.10 of Spoonbills Agreement for sale dated 26.10.2020 vide Annexure F R/w clause 7 of the Framework Agreement dated 08.03.2021 vide Annexure G R/w clause 15 of the Deed of Guarantee dated 08.03.2021 vide Annexure J and R/w clause 5.2 of Coupon Servicing Agreements dated 08.03.2021 vide Annexure K and L, as per the provisions of the Arbitration and Conciliation Act, 1996?” HC-KAR NC: 2026:KHC:5033

It is undisputed that the petitioners and the respondents entered into Agreements for sale regarding Schedule A and Schedule B properties. Respondent No. 1 and 2 entered into Framework Agreement dated 08.03.2021. In furtherance of the Framework Agreement entered into between the parties, multiple other agreements came to be entered into by the parties. The Respondents agreed to pay quarterly interest on the sale consideration paid by the petitions. The Respondents neither made the interest payments nor delivered the subject properties. The petitioners filed an Arbitration Application in A A 118/2025 under section 9 of the Act seeking interim reliefs. The trial court granted ad interim ex parte relief to the petitioners against the respondents. Thereafter, the petitioners issued an Arbitration notice dated 13.05.2025 proposing the name of the Arbitrator. HC-KAR NC: 2026:KHC:5033

I have perused the Arbitration clauses incorporated in various agreements entered into between the parties to the petition which reads as follows: A. Agreement for Sale between Petitioner No. 1 and Respondent No. 1 dated 26 October 2020 ("Black Heron Agreement for Sale):

3 In the event the Parties are unable to appoint an arbitrator for the resolution of their dispute, the arbitrators shall be appointed in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The venue and seat of arbitration shall be Bangalore and conducted in the English Language. Subject to resolution of disputes by arbitration, the Courts at Bangalore shall have the exclusive supervisory juri iction in regard to this Agreement."

The Guarantor are hereby agrees and confirm that all disputes and differences between the parties under this Guarantee and the transaction and contractual relationship contemplated hereunder shall be referred to a sole arbitrator whose award shall be final and binding on the parties. The arbitration shall be held in Bangalore in the English Language under the provisions of the Arbitration and Conciliation Act, 1996. Subject to the arbitration, the Courts at Bangalore alone shall have juri iction any suit or other legal proceedings arising out of this Guarantee."

From the perusal of the Arbitration clauses referred above, it is evident that the dispute arising out of or in connection with the various agreements mentioned above, the same shall be referred to the Arbitration in accordance with the provisions of the Act.

Admittedly, the dispute arose between the parties to the petition regarding the payment of accrued interest and delivery of the subject lands. The multiple agreements entered into between the parties to the petition contains the Arbitration clause. The petitioners invoked the Arbitration clauses respectively by issuing the Arbitration notice dated 13.05.2025, and proposed the name of the Arbitrator. However, the Respondents did not concur HC-KAR NC: 2026:KHC:5033 with the Petitioners in the appointment of the Arbitrator.

The Arbitral dispute has arisen between the parties to the petition and the same has to be resolved through the Arbitration. Therefore, the petitioners have made out a ground to refer the dispute to the Arbitrator in terms of the Arbitration clause incorporated in the various agreements. Accordingly, I answer the point in the affirmative.

In view of the above discussion, I proceed to pass the following order: ORDER