Mr. Deepak Lokanath Sindhe vs. Mr. Atreya Tiwari

Facts

The petitioner, Mr. Deepak Lokanath Sindhe, represented by his Power of Attorney holder, filed a Civil Miscellaneous Petition under Section 11(5) of the Arbitration and Conciliation Act, 1996. The petition sought the appointment of a sole arbitrator as per Clause 22 of a Lease Deed dated 03.10.2016, entered into with respondents Mr. Atreya Tiwari and Mindful Hospitality LLP. The petitioner had previously issued a notice on 18.11.2020 demanding arrears of rent, maintenance, and other charges. The respondents, in their reply dated 01.12.2020, admitted their liability but sought time to pay. Subsequently, the petitioner invoked the arbitration clause on 22.12.2020. The petitioner had also approached the City Civil Court under Section 9 of the Act, seeking a direction for the respondents to deposit Rs. 4,86,202/- along with GST at 18% per month for illegal occupation, which the court allowed.

Held

The Court held that the petitioner had satisfied the requirements of law under the Arbitration and Conciliation Act, 1996, for the appointment of a sole arbitrator. The Court found that Clause 22 of the Lease Deed dated 03.10.2016 contained a valid arbitration clause. The Court noted the petitioner's submission regarding the notice invoking arbitration and the respondents' failure to pay the admitted arrears of rent and charges. The Court also considered the order passed by the City Civil Court in a Section 9 application, which indicated the existence of a dispute and admitted damages. Based on these facts and the petitioner's contentions, the Court was convinced that the conditions for appointing an arbitrator were met. Consequently, the Court allowed the petition and appointed Hon’ble Sri Justice P.G.M. Patil, Former Judge, High Court of Karnataka, as the sole arbitrator. All contentions between the parties were left open for adjudication in the arbitration proceedings. The office was directed to communicate the order to the Arbitration and Conciliation Centre and the appointed arbitrator.

Key Issues

1. Whether the petitioner has satisfied the requirements under Section 11(5) of the Arbitration and Conciliation Act, 1996, for the appointment of a sole arbitrator, considering the arbitration clause in the Lease Deed dated 03.10.2016. The petitioner argued that a valid arbitration clause exists in the Lease Deed and that the respondents failed to pay the admitted arrears of rent and charges, necessitating the invocation of arbitration. The petitioner highlighted the respondents' admission of liability and the subsequent failure to clear the dues. The petitioner also pointed to the order passed by the City Civil Court in a Section 9 application, which directed the deposit of admitted damages, further substantiating the existence of a dispute and the petitioner's claim. The respondents were served notice but remained unrepresented and ex-parte. Therefore, no arguments were recorded on their behalf.