Case Note & Summary
The judgment concerns three arbitration petitions filed under Section 9 of the Arbitration and Conciliation Act, 1996, by licensors seeking interim measures pending arbitration against licensees. The lead petition is Arbitration Petition (L.) No. 22526 of 2022 filed by BXIN Office Parks India Pvt. Ltd. against Kailasa Urja Pvt. Ltd. The petitioner is the owner of a building called One World Center in Lower Parel, Mumbai, and had entered into a Leave and Licence Agreement on 6 January 2017 with the respondent, granting licence to use 16,256.70 sq. ft. in Tower 1 for operating a food court. The petitioner alleged that the respondent committed breaches, leading to termination of the licence. The other two petitions involve similar disputes between One International Center Pvt. Ltd. vs. Symphony Kitchen Pvt. Ltd. and Indiabulls Properties Pvt. Ltd. vs. Symphony Kitchen Pvt. Ltd. & Anr. The court considered whether interim relief should be granted to protect the subject matter of the arbitration. The court held that the petitioners have made out a prima facie case, balance of convenience is in their favour, and irreparable loss would be caused if interim relief is not granted. The court directed the respondents to maintain status quo and not create third-party rights. The judgment was reserved on 28 July 2022 and pronounced on 20 August 2022.
Headnote
A) Arbitration Law - Interim Measures - Section 9 of the Arbitration and Conciliation Act, 1996 - Leave and Licence Agreement - Termination - The court considered whether interim protection should be granted to licensors who terminated licence agreements due to alleged breaches by licensees. The court held that a prima facie case exists for grant of interim relief to protect the subject matter of the arbitration, and balance of convenience lies in favour of the petitioners. (Paras 1-10) B) Contract Law - Leave and Licence Agreement - Termination - Breach of Contract - The dispute pertained to termination of leave and licence agreements by the licensors on grounds of non-payment and other breaches. The court found that the agreements contained arbitration clauses and that the disputes were arbitrable. (Paras 3-6) C) Property Law - Recovery of Possession - Licence - The court held that the licensors have a right to seek recovery of possession upon termination of the licence, and such disputes are covered by the arbitration agreement. (Paras 4-7)
Issue of Consideration
Whether the petitioners are entitled to interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, pending arbitration, in respect of disputes arising from termination of leave and licence agreements.
Final Decision
The court granted interim relief in favour of the petitioners, directing the respondents to maintain status quo and not create third-party rights, pending the arbitral proceedings.
Law Points
- Interim measures under Section 9 of the Arbitration and Conciliation Act
- 1996
- Leave and Licence Agreement
- Termination of licence
- Recovery of possession
- Prima facie case
- Balance of convenience
- Irreparable loss
