The Lease Deed included a clause mandating that any disputes arising from the agreement be settled through arbitration by a mutually agreed-upon arbitrator, Mr. Atul Kumar. When disputes surfaced, the petitioner formally notified the respondent on November 14, 2022, under Section 21 of the Arbitration and Conciliation Act, 1996. However, the respondent failed to respond, leading to complications in the arbitration process.

Instead of approaching the court under Section 11(5) of the 1996 Act for the appointment of Mr. Kumar as arbitrator, the petitioner mistakenly allowed Mr. Kumar to issue a notice directly to the respondent. This unilateral action proved problematic, especially when the respondent did not attend the proceedings, resulting in an ex-parte decision against them.

As the deadline for Mr. Kumar's mandate approached, the petitioner filed a request to extend his mandate. However, this request was subsequently withdrawn, and a new petition was filed seeking to terminate Mr. Kumar's mandate and appoint a substitute arbitrator.

The court identified key errors in the petitioner’s approach, emphasizing that Mr. Kumar’s appointment as the arbitrator was explicitly stated in the Lease Deed. Consequently, there was no justification for replacing him with another arbitrator. The court also highlighted the petitioner’s oversight in not seeking court intervention when the respondent failed to reply to the initial notice, which is a crucial step in the arbitration process.

As a result, Mr. Kumar's ability to arbitrate was deemed invalid, leading to his mandate being terminated under Section 14(1)(a) of the 1996 Act.

In an interesting turn, both parties agreed to reappoint Mr. Kumar as the arbitrator, with the stipulation that the proceedings would start afresh, given the respondent's non-participation in the earlier attempt. The court directed that the arbitration would commence anew, with both parties required to appear before Mr. Kumar on September 17, 2024.

The court made it clear that no unnecessary adjournments would be permitted and that the mandate of the arbitrator would be considered to have commenced afresh from the date of the ruling.

This case serves as a poignant reminder of the procedural requirements inherent in arbitration and the importance of adhering to legal protocols. By correcting the initial missteps and ensuring that both parties have a fair opportunity to participate, the court aims to facilitate a just resolution to the lease dispute. As arbitration continues to be a favored method for dispute resolution, this ruling reinforces the necessity of diligence and compliance with statutory provisions.