Summary
Allowing a petition for appointment of a sole arbitrator under a sub-lease, the Court held that tenancy disputes governed by the Transfer of Property Act are arbitrable where the parties agreed to arbitration. Disputes governed by special rent legislation conferring statutory protection and exclusive jurisdiction on a specified forum remain non-arbitrable. Because the petitioner was a Kenyan national habitually resident there, the arbitration was international commercial and appointment lay with the Supreme Court despite the contractual reference to the Delhi High Court.
Issues
- Whether disputes under a lease governed by the Transfer of Property Act may be arbitrated, including claims involving relief against forfeiture.
- Which court could appoint the arbitrator where one party was a foreign national habitually resident abroad.
Provisions considered
- Sections 2(1)(f) and 11(5), (6), Arbitration and Conciliation Act, 1996The Kenyan petitioner brought the dispute within international commercial arbitration; the Court exercised appointment jurisdiction despite the clause naming the Delhi High Court. (¶¶ 1, 5–7, 19–20)
- Sections 111, 114 and 114A, Transfer of Property Act, 1882Determination of lease and equitable relief against forfeiture may be considered by an arbitrator; these provisions do not create the exclusive statutory tenancy protection characteristic of special rent legislation. (¶ 14–18)
Held
- Where lease or tenancy rights are governed by the Transfer of Property Act and an arbitration clause binds the parties, disputes concerning determination of the lease and possession may be resolved in arbitration. An arbitrator may consider relief against forfeiture under sections 114 and 114A and pass an appropriate award as a court could exercise that discretion. (¶ 14–16)
- Eviction or tenancy disputes governed by special rent statutes protecting the tenant and vesting adjudication exclusively in a specified court or forum are non-arbitrable. Where such a special statute does not apply when the cause of action arises, the agreed arbitration clause may be invoked. The Court followed the larger Bench answer in Vidya Drolia overruling Himangni Enterprises. (¶ 17–18)
- The petitioner’s Kenyan nationality and habitual residence made this an international commercial arbitration. The Supreme Court, rather than the contractually named High Court, was the competent appointment forum. The respondent neither replied to the nomination notice nor appeared to oppose appointment after service. (¶¶ 3–7, 19–20)
Result
Petition allowed. Justice (Retd.) Mukul Mudgal appointed sole arbitrator; fee payable under the Fourth Schedule to the 1996 Act. No order as to costs.