Case Note & Summary
The judgment concerns five arbitration petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996, by various petitioners (Rajesh K. Shah as Karta of R.K. Shah (HUF), Ramesh K. Shah as Karta of K.V. Shah (HUF), Smt. Bharti Haren Chheda, and Smt. Bhanuben R. Shah) against the respondent, Mr. Kamlesh K. Sahani (sole proprietor of Kamal Enterprises) and M/s Shant Snacks & Beer Bar. The disputes arose from leave and license agreements executed between the parties, under which the petitioners had granted licenses to the respondent for use of premises. The petitioners alleged that the respondent failed to vacate the premises after termination of the agreements and committed breaches. The arbitration clauses in the agreements provided for resolution of disputes through arbitration. The petitioners invoked the arbitration clauses and sought appointment of an arbitrator, but the respondent did not cooperate, leading to the filing of these petitions. The respondent raised objections that the disputes were not arbitrable as they related to possession and termination of leave and license, that the agreements were not properly stamped, and that the arbitration clause did not survive termination. The court, after hearing both sides, held that the existence of an arbitration clause is sufficient for appointment under Section 11, and objections regarding stamping and arbitrability are matters for the arbitrator to decide. The court also held that the arbitration clause survives termination of the agreement. Accordingly, the court allowed all five petitions and appointed a sole arbitrator to adjudicate the disputes. The court directed the parties to appear before the arbitrator and left all issues open for the arbitrator to decide.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of Arbitration and Conciliation Act, 1996 - Existence of Arbitration Clause - Petitioners sought appointment of arbitrator under Section 11 based on arbitration clauses in leave and license agreements - Respondent objected on grounds that disputes were not arbitrable, agreements were not properly stamped, and arbitration clause did not survive termination - Court held that existence of arbitration clause is sufficient for appointment under Section 11, and objections regarding stamping and arbitrability are for the arbitrator to decide - Held that arbitration clause survives termination of agreement (Paras 1-12). B) Arbitration Law - Non-Arbitrability - Section 11 of Arbitration and Conciliation Act, 1996 - Disputes relating to leave and license - Respondent argued that disputes regarding possession and termination were not arbitrable - Court held that disputes arising from leave and license agreements are arbitrable, and the arbitrator can decide all disputes including those relating to possession - Held that such disputes are not excluded from arbitration (Paras 1-12). C) Arbitration Law - Stamping of Agreement - Section 11 of Arbitration and Conciliation Act, 1996 - Respondent contended that agreements were not properly stamped and thus arbitration clause was not enforceable - Court held that objections regarding stamping are for the arbitrator to decide under Section 11(6A) - Held that the court at the stage of appointment need not examine stamping (Paras 1-12).
Issue of Consideration
Whether arbitration petitions under Section 11 of the Arbitration and Conciliation Act, 1996 should be allowed for appointment of arbitrator despite objections regarding non-arbitrability of disputes, lack of proper stamping, and termination of agreements.
Final Decision
All five arbitration petitions are allowed. A sole arbitrator is appointed to adjudicate the disputes between the parties. The parties are directed to appear before the arbitrator on a date to be fixed. All issues are left open for the arbitrator to decide.
Law Points
- Arbitration clause survives termination of agreement
- Existence of arbitration clause is sufficient for appointment under Section 11
- Objections regarding stamping are for arbitrator to decide
- Disputes relating to leave and license are arbitrable
