Arbitration and Conciliation Act, 1996
Sections 9 & 11—Appointment of an arbitrator—By a registered deed the second respondent leased out the suit property to the appellant—Lease was due to expire by efflux of time—Appellant offered for renewal—Rejected by respondent—Application under Section 9 of the Arbitration and Conciliation Act allowed by Commercial Court—Appeal by State and application under Section 11 of the Act filed by appellant dismissed by the Division Bench of the High Court—It is well settled that Clauses in a lease deed cannot be read and construed in isolation but as a whole—Clause 4(XIII) has to be read with Clause 3 which clearly provides renewable—Prima facie, the parties to the lease deed have used the expression “shall” which connotes a command—If the lessee offered it’s terms for renewal or extension of the lease within the time stipulated in the lease, the same would have to be accepted—Division Bench fell in error in rejecting the application of the appellant under Section 11(6) of the Act for appointment of an arbitrator—Dispute arising out of non-renewal of the lease is clearly arbitrable—Arbitration clause cannot be rendered otiose by refusal of the respondent State to renew the lease—Appeals allowed.
[Paras 14 to 16, 18 & 19]
Decision : Appeals allowed