Arbitration Request No. 3 of 2018

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **TUESDAY, THE 20TH DAY OF MARCH 2018 / 29TH PHALGUNA, 1939** **AR.No. 3 of 2018** ## **PETITIONER(S)** ## **-------------** **PRADEEP KUMAR NAIR, AGED 49 YEARS, SON OF KANARA KRISHNAN RAMAN, KANARA HOUSE, PAZHUVIL (WEST) P.O., THRISSUR DISTRICT, NOW RESIDING AT ABU DHABI, U.A.E., REPRESENTED BY POWER OF ATTORNEY HOLDER, K.R.UNNIKRISHNAN, AGED 51 YEARS, SON OF KANARA KRISHNAN RAMAN, KANARA HOUSE, POZHUVIL (WEST) P.O., THRISSUR DISTRICT.** **BY ADVS.SRI.VARGHESE.J.PUNNACHALIL SRI.JAWAHAR JOSE** ## **RESPONDENT(S):** **--------------** ## **1. THOMAS ISSAC,** **AGED ABOUT 54, S/O.LATE M.U.ISAAC, MADATHIMYALIL HOUSE, DOOR NO.35/188, NH 47, PALARIVATTOM P.O., KOCHI-682025.** ## **2. ANNIE THOMAS,** **AGED ABOUT 50, WIFE OF THOMAS ISAAC , MADATHIMYALIL HOUSE, DOOR NO.35/188, NH 47, PALARIVATTOM P.O., KOCHI-682025.** **BY ADVS.SRI.JOSEPH MARKOSE (SR.)** **SRI.JOSEPH KODIANTHARA (SR.) SRI.V.ABRAHAM MARKOS SRI.BINU MATHEW SRI.ABRAHAM JOSEPH MARKOS** **THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 20-03-2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **TS** **AR.No. 3 of 2018** **APPENDIX** ## **PETITIONER(S)' ANNEXURES** **-------------------------** **ANNEXURE 1:- COPY OF THE LETTER DATED 25.7.2017. ANNEXURE 2:- COPY OF THE DEED LEASE DATED 6.10.2015. ANNEXURE 3:- COPY OF THE LETTER DATED 09.8.2017.** ## **RESPONDENT(S)'ANNEXURES- NIL** **------------------------------** **/TRUE COPY/** **PS TO JUDGE** **TS 05/04/2018** ## **Sathish Ninan, J. ========================== Arbitration Request No.3 of 2018 ============================= Dated this the 20[th] day of March, 2018** ## **JUDGMENT** The petitioner seeks appointment of an arbitrator to adjudicate on the disputes between the petitioner and the respondents, in relation to a lease. The petitioner is a tenant and the respondents are the landlords. The terms of reference which calls for adjudication as claimed by the petitioner are : “a. Restraining you and your agents from causing any nuisance to the proper functioning of the firm. b. Is there any obligation to my client to pay rent at the agreed rate as long as the facilities were denied by you and caused loss to the business. c. To fix the rent of the premises during the period your closed down the facilities provided to my client. **Arbitration Request No.3 of 2018** -: 2 :- - d. To fix the rent payable by my client till the facilities are opened by you. e. Whether the damage suffered by my client is to be adjusted towards the future rent.” 2. Annexure A2 is the lease deed entered into between the parties and dated 6.10.2015. Clause 25 of the lease deed provides thus: “25) It is further agreed that if any dispute arises between the LESSORS and the LESSEE, the same shall be referred to Arbitration by a common Arbitrator appointed by both the LESSORS and LESSEE in accordance with the Arbitration and Conciliation Act, 1996 and the award passed by the arbitrator shall be final and binding on both the parties. The venue of arbitration shall be Kochi.” 3. Claiming eviction on the ground of arrears of rent, the respondents have initiated proceedings before the Rent Control Court in a petition filed under Section **Arbitration Request No.3 of 2018** -: 3 :- 11(2)(b) of the Kerala Lease and Rent Control Act. The same is pending. The dispute between the parties, which the petitioner-tenant seeks for reference to the arbitrator, essentially flows out of second paragraph of Clause 8 of the lease deed. The said paragraph reads thus: “The LESSEE shall be liable to pay all charges arising out of the use of common facilities of the building such as common electricity, common diesel generator, water supply, lift, security services, cleaning services etc. in equal shares along with the LESSEES occupying the Ground and First Floors of the building of which the SCHEDULE PROPERTY forms a part. Charges for the same shall be billed on actuals for which invoice shall be raised by LESSOR No.2 on a monthly basis. The same shall be paid by the LESSEE before the 5[th] day of the next month.” **Arbitration Request No.3 of 2018** -: 4 :- 4. According to the petitioner-tenant, the amenities as mentioned there in were not provided, which entailes reduction in the rent payable. 5. The question posed is, is the dispute 'arbitrable' since it flows out of a tenancy relationship. The apex court has held that various disputes relating to rights and liabilities which arise out of criminal offences, matrimonial disputes, divorce, judicial separation, restitution of conjugal rights, child custody, guardianship matters, insolvency and winding up matters, testamentary matters and eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes, are 'non arbitrable' disputes. However, I do not think that in exercise of the powers under Section 11 of the Act, I am to decide upon the 'arbitrability' of the issue. In **Booz Allen and** **Arbitration Request No.3 of 2018** -: 5 :- **Hamilton INC v SBI Home Finance Limited and Others** ( **2011(5) SCC 532)** the apex court held that there is wide difference in the jurisdiction conferred under Section 11 and 8 of the Arbitration and Conciliation Act, 1996. The scope under Section 11 for appointment of arbitrator is much narrower than one under Section 8 of the Act. Paragraphs 32 and 33 therein are relevant and are extracted hereunder. “32. The nature and scope of issues arising for consideration in an application under Section 11 of the Act for appointment of arbitrators, are far narrower than those arising in an application under Section 8 of the Act, seeking reference of the parties to a suit to arbitration. While considering an application under Section 11 of the Act, the Chief Justice or his designate would not embark upon an examination of the issue of “arbitrability” or **Arbitration Request No.3 of 2018** -: 6 :- appropriateness of adjudication by a private forum, once he finds that there was an arbitration agreement between or among the parties, and would leave the issue of arbitrability for the decision of the Arbitral Tribunal. If the arbitrator wrongly holds that the dispute is arbitrable, the aggrieved party will have to challenge the award by filing an application under Section 34 of the Act, relying upon sub-section(2)(b)(i) of that section. 33. But where the issue of “arbitability” arises in the context of an application under Section 8 of the Act in a pending suit, all aspects of arbitrability will have to be decided by the court seized of the suit, and cannot be left to the decision of the arbitrator. Even if there is an arbitration agreement between the parties, and even if the dispute is covered by the arbitration **Arbitration Request No.3 of 2018** -: 7 :- agreement, the court where the civil suit is pending, will refuse an application under Section 8 of the Act, refer the parties to arbitration, if the subject-matter of the suit is capable of adjudication only by a public forum or the relief claimed can only be granted by a special court or Tribunal.” 6. Therefore it is clear that, in a pending suit, if an application under Section 8 of the Arbitration and Conciliation Act is moved seeking reference to arbitration and the issue of 'arbitrability' arises, the court will have to decide on the same. However, in an application under Section 11 of the Act, dwelling into the issue of 'arbitrability' does not arise. All that is to be looked into is as to whether there is an arbitration agreement between the parties. The issue of arbitrability is to be left for decision by the tribunal. The finding of arbitrability entered into by the ## **Arbitration Request No.3 of 2018** -: 8 :- arbitrator can be challenged by the aggrieved party in an application under Section 34 (2)(b)(i) of the Act. The same principle has been reiterated by the apex court in **Arasmeta Captice Power Company Private Limited and Another v Lafarge India Private Limited ((2013) 15 SCC 414** and **Rajesh Verma v Ashwani Kumar Khanna (AIR 2016 SC 1910)** . 7. Since undisputedly there is an arbitration agreement and the parties are bound by it, there is no reason why an arbitrator should not be appointed. I hereby nominate and appoint Sri.N.Sukumaran, retired District Judge, H.B- 50, Panampally Nagar, Cochin - 16 as the arbitrator in the cause. Arbitration Request is ordered accordingly. **Sd/- Sathish Ninan, Judge.** vdv