M/S Pothys Retail Private Limited vs. M/S Evolve Business Ventures

Heard the arguments of the learned counsel for the petitioner and the respondent.

Learned counsel for the petitioner submits that AAI terminated the license of the respondent and the petitioner requested a refund of the security deposit and advance rent with interest. The respondent failed to refund the deposit inspite of several reminders. She submits that the petitioner has invoked an Arbitration Clause by issuing a notice dated 20.01.2023 under Section 21 of the Act, 1996, proposing the names of the Arbitrators. She submits that the respondent did not reply to the Arbitration Notice. HC-KAR NC: 2025:KHC:21808 Hence, she prays to nominate the Arbitrator to resolve the dispute between the parties to the petition.

Per contra, learned counsel for the respondent submits that in similar circumstances, this Court has already passed an order nominating Sri. Kukkaje Ramakrishna Bhat, Retd. District Judge as an Arbitrator and prays to nominate Sri. Kukkaje Ramakrishna Bhat as Arbitrator.

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

The point that arises for consideration is: “Whether the petitioner has made out a ground to refer the dispute to the Arbitrator in terms of Article 13.2 of the Retail Partner Agreement dated 17.12.2018 as per the provisions of the Arbitration and Conciliation Act, and Rules?”

There is no dispute regarding the execution of the Retail Partner Agreement dated 17.12.2018 between the petitioner and the respondent. It is not in dispute that HC-KAR NC: 2025:KHC:21808 the respondent invited the petitioner to build a store for its range of merchandise at the general retail outlet located at the Domestic & international departures in Chennai Airport at the Domestic Terminal. The petitioner expressed the desire to enter into an agreement with the respondent to lease the space for building, operating and maintaining the petitioner’s brand store, subject to the terms and conditions. Accordingly, the terms and conditions were set out in the Retail Partner Agreement dated 17.12.2018 and the lease was for 36 months. It was agreed that as per the terms agreed between the parties, the petitioner agreed to pay a fee of either the fixed minimum monthly guarantee amount or 28% of the gross revenue, generated at the store, on a monthly basis whichever is higher. The fee shall be exclusive of GST, which shall be payable in addition to the amount by the petitioner.

The AAI has terminated the respondent’s license on 16.02.2022. As per Article 11 of the agreement, HC-KAR NC: 2025:KHC:21808 the respondent should have indemnified the petitioner for any default by the respondent. The AAI had extended an offer to enter into a contract agreement directly with the AAI for carrying out business in the premises of the Airport temporarily. Despite not adhering to the agreed upon terms, indemnifying the petitioner from any loss, the respondent issued a letter attaching Annexure-1, which falsely displayed a balance of Rs.26,84,685/- for both International and Domestic Terminals. It is stated that there is no outstanding amount to be paid by the petitioner to the respondent. The petitioner made an attempt to negotiate a settlement in terms of the agreed upon Clause, however it was also futile.

There is an Arbitration Clause in the Retail Partner Agreement which reads as under: 13.2 of the Retail partner agreement dated 17.12.2018 and referring the aforesaid disputes to arbitration which is extracted as below.

1 Any Dispute, which is not settled by negotiation and conciliation, shall be resolved by HC-KAR NC: 2025:KHC:21808 final and binding arbitration. The arbitral tribunal shall consist of only 1 (one) arbitrator. The sole arbitrator shall be appointed mutually by both the parties.

2 The arbitration shall be regulated under the provisions of the Arbitration and Conciliation Act, 1996. 13.2.3 A Party seeking to commence arbitration under this Clause shall first serve a written notice (an "Arbitration Notice"), specifying the matter or matters to be so submitted to arbitration, on the other disputing Parties hereto.

4 All arbitration proceedings shall be conducted in the English Language and the venue of arbitration shall be Bangalore, India. In connection with the arbitration proceedings, the Parties hereby agree to cooperate in good faith with each other and the arbitral tribunal, to use their best efforts to respond promptly to any reasonable discovery demand made by any Party and the arbitral tribunal. The language of arbitration shall be English.

5 The cost of the arbitration including fee of the arbitrator, administrative expenses etc., shall be shared equally by the disputing Parties. However, in the award, the arbitrator may award and direct payment of such costs to the successful Party by the losing Party in which case the award shall prevail."

The petitioner, by invoking an Arbitration Clause, issued Arbitration Notice on 20.01.2023 as per Section 21 of the Act,1996, proposing the name of the Arbitrator. The respondent did not reply to the Arbitration HC-KAR NC: 2025:KHC:21808 Notice. Admittedly, there is an Arbitration clause in the Retail Partner Agreement and a dispute arose between the petitioner and the respondent and the same has to be resolved through Arbitration.

Learned counsel for the respondent submits no objection to nominate Sri. Kukkaje Ramkrishna Bhat as an Arbitrator. He also submits in other connected matters Sri. Kukkaje Ramkrishna Bhat was nominated as an Arbitrator by this Court.

In view of the above discussion, the petitioner has made out a ground to refer the matter to the Arbitrator to resolve the dispute. Hence, I answer the point for consideration in the affirmative.

Accordingly, I proceed to pass the following: