JUDGMENT> Arbitration > Arbitrator
SYNOPSIS : Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator to resolve the dispute between the Building Constructor and the individual flat owners of the Apartment pursuant to the Joint Development Agreement entered into them and to direct the flat owner to pay costs.
Arbitration Original Petition (Commercial Division) filed under section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator to resolve the dispute between the petitioners and the respondents pursuant to the Joint Development Agreement entered into between the petitioners and the respondents and to direct the respondents to pay costs.
The respondents are individual flat owners and they entered into joint development agreement with the applicants to develop the properties and construct flats after demolition.
Madras High Court granted an order of interim injunction restraining the respondents from alienating/encumbering the properties in O.A. No.870 of 2024 dated 15.11.2024.
The respondents are now not willing to adhere to the terms and conditions of the contract by fulfilling their part of the contract.
Out of 27 owners, Only 26 flat owners had signed the first Joint Development Agreement entered into with the first applicant dated 15.03.2021 and thereafter, the owners representing 12 flats had signed the second Joint Development Agreement entered into with the second applicant inbetween July and September 2023.
21 flat owners had executed a General Power of Attorney in favour of the second applicant authorising the second applicant to deal with the properties,
17 flat owners have cancelled the General Power of Attorney executed in favour of the second applicant
Unless and until all the flat owners have executed the Joint Development Agreements in favour of the applicants, it may not be possible for the applicants to develop the properties.
Learned counsel for the applicants informed that as per the provisions of Tamil Nadu Apartments Ownership Act, 2022, if 2/3rd of the flat owners give consent for development of the properties, the applicants are entitled to develop the properties.
The respondents also state that only a sum of Rs.2,00,000/- was paid as a security deposit that too only for 12 flat owners. In addition to that, the applicants have spent a sum of Rs.50,00,000/- for paper work to fulfill their part of the contract
Court is not inclined to extend the interim order granted by this Court in favour of the applicants on 15.11.2024.
Liberty is granted to the applicants to file an appropriate application if they so desire before the Arbitrator, appointed by this Court under section 17 of the Arbitration and Conciliation Act to protect their interest and liberty is also granted to the respondents to raise all their objections known to them under law whenever such an application is filed by the applicants before the Arbitrator.
the group of companies doctrine will also not apply to the case and the respondents as they are individual flat owners
Learned counsel for the petitioners have said that 21 respondents have executed General Power of Attorney in terms of the Joint Development Agreements and therefore, all of them are bound by the arbitration clause contained in both the Joint Development Agreements.
On the other hand, learned counsel for the respondents have said that the Power of Attorney executed by 21 flat owners was cancelled by 17 of them and therefore, the said Power of Attorney cannot be relied for the purpose of claiming that the arbitration clause binds all the respondents
"22. If any dispute arises between the Land owners 1 to 24 and the Builder, the same shall be referred to a Sole arbitrator dulyappointed by the mutual consent and agreement between both the Builder and the Land owners 1 to 24, whose decision shall be final. The venue of arbitration shall be at Chennai. The proceedings of arbitration shall be according to the Arbitration and Conciliation Act, 1996. The Arbitration proceedings shall be subject to the provisions, rules and regulations of THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016, Tamil Nadu Real Estate (Regulation and Development) Rules, 2017 and Tamil Nadu Real Estate Regulatory Authority (General) Regulations, 2018"
"31. The parties herein agree to settle all disputes, misunderstandings and difference of opinion that might be arising between them whether as to the interpretation of the terms and conditions, contained herein and/or as to the determination of their respective rights, by way of referring such dispute(s) to the Sole Arbitrator to be appointed by the Party of the Second Part with the consent of the Party of the First part. The procedure as prescribed by the Indian Arbitration and Conciliation Act, 1996 as amended up to date shall be adopted by the sole arbitration/umpire as the case may be. The law application shall be Indian Law and the venue of Arbitration shall be at Chennai. The Courts in Chennai alone shall have sold and exclusive jurisdiction to try allconsequential proceedings arising from the said award/arbitration proceedings."
The Existence of an arbitration clause in the agreements, which are the subject matters of the dispute between the parties
The petitioners have also invoked arbitration by issuing a notice to the respondents on 14.09.2024 as per the provisions of section 21 of the Arbitration and Conciliation Act.
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