Mandatory arbitration clause in a lease deed upheld where disputes were required to go to arbitration, not court proceedings.

An arbitration clause in a lease deed was construed as mandatory where disputes on interpretation and implementation had to be referred to arbitration, and the reference to Delhi court jurisdiction was treated as the supervisory forum rather than an alternative to arbitration. The objection that the clause created an impermissible split between lessor and lessee claims was rejected because the arbitration agreement applied mutually and the related clause did not narrow its scope. The note also reflects the settled approach that landlord-tenant disputes of this kind are arbitrable and that, at the Section 11 stage, a prima facie view is taken with doubts generally resolved in favour of reference to arbitration.

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Issues: Whether the arbitration clause in the lease deed constituted a valid and binding arbitration agreement so as to justify appointment of an arbitrator under Section 11; and whether the lease deed created any impermissible classification of claims so as to prevent reference of disputes to arbitration.

Analysis: The arbitration clause was construed as mandatory because disputes concerning interpretation and implementation of the lease deed were required to be referred to arbitration and the reference to Delhi court jurisdiction was read as governing the supervisory court forum, not as an option to bypass arbitration. The objection based on alleged optionality was rejected as a misreading of the clause. The plea that Clause 25 read with Clause 27 created a split between the lessor's and lessee's claims was also rejected, since the arbitration agreement operated mutually for both sides and Clause 27 did not curtail the width of Clause 25. The Court also relied on the settled position that landlord-tenant disputes of this nature are arbitrable, that contractual language should be interpreted to uphold rather than defeat arbitration, and that at the Section 11 stage only a prima facie view is required, with doubts ordinarily resolved in favour of reference to arbitration.

Conclusion: The arbitration agreement was held to be valid and operative, and the disputes were held fit for reference to arbitration.

Final Conclusion: A sole arbitrator was appointed to adjudicate the disputes, with objections on jurisdiction, existence, or validity of the arbitration agreement left open for decision by the arbitral tribunal.

Ratio Decidendi: At the Section 11 stage, a court should adopt a prima facie approach and give effect to a mandatory arbitration clause where the contract, read as a whole, shows an intention to refer disputes to arbitration; interpretive doubts should ordinarily be resolved in favour of arbitration rather than by invalidating the clause.

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