SHINHAN BANK versus CAROL INFO SERVICES LIMITED

Citation: [2023] 5 S.C.R. 706 · Decided: 13-03-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Judgment (excerpt)

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SUPREME COURT REPORTS
[2023] 5 S.C.R.
   [2023] 5 S.C.R. 706
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SHINHAN BANK
v.
CAROL INFO SERVICES LIMITED
(Arbitration Petition (Civil) No 1 of 2019)
MARCH 13, 2023
[DR. DHANANJAYA Y CHANDRACHUD, CJI,
PAMIDIGHANTAM SRI NARASIMHA AND
J. B. PARDIWALA, JJ.]
Arbitration and Conciliation Act, 1996: ss.7, 8 – Arbitration
agreement – Leave and License agreement as also amenties
agreement between the petitioner and the respondent – Disputes
between the parties – Invocation of Arbitration clause by the
petitioner by Proposing appointment of a sole arbitrator for
settlement of disputes – However, denial of existence of an arbitration
agreement by the respondent – Case of the respondent that the
Amenities agreement contained an arbitration agreement, and not
the Leave and Licence agreement; and that the petitioner should
move an application u/s. 8 for seeking a reference to arbitration –
On appeal, held: Plain consequence of clause (1) of the Amenities
agreement is that all the terms of the agreement constitute an integral
part of the Leave and Licence agreement – Thus, the parties have
intended to make the arbitration clause in the Amenities agreement
an integral part of the Leave and Licence agreement – s. 7(5)
stipulates that the reference in a contract to a document containing
an arbitration clause constitutes an arbitration agreement if the
contract is in writing and the reference is such as to make that
arbitration clause part of the contract – Thus, it cannot be said that
the petitioner should be now relegated to pursuing the remedy u/s.
8 – In view of the clear terms of the contract between the parties, a
reference to arbitration would be necessitated – Sole arbitrator
nominated by the petitioner having assumed the position of Lokyukta
of the State of Maharashtra, the disputes and differences between
the parties to be referred to the former Judge of the High Court.
M R Engineers and Contractors Private Limited vs Som
Datt Builders Limited (2009) 7 SCC 696 – referred to.
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Case Law Reference
(2009) 7 SCC 696
referred to
Para 13
CIVIL ORIGINAL JURISDICTION : Arbitration Petition (Civil)
No.1 of 2019.
Arbitration Petition Under Section 11(6) read with Section 11(12)(a)
of the Arbitration and Conciliation Act, 1996.
Abhishek Puri, Ms. Surabhi Gupta, Manish Dhingra, Mrs. Reeta
Puri, P. N. Puri, Advs. for the Petitioner.
Sanjeev Kumar Kapoor, M/s. Khaitan & Co., Advs. for the
Respondent.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, CJI
1. On 5 August 2011, the petitioner entered into a Leave and
License agreement with the respondent for the use and occupation of
office premises situated on the 4th Floor of the West Wing at Wockhardt
Towers, C-2, Block G, Bandra Kurla Complex, Bandra (East), Mumbai
400051 for a period of five years. On the same day, an Amenities
agreement was contemporaneously executed with the Leave and Licence
agreement. Upon the expiry of the term of the Leave and License
agreement, a fresh Leave and Licence agreement was executed between
the petitioner and the respondent on 1 July 2016 for the continued use
and occupation of the premises for a period of two years.
2. On 25 August 2016, the petitioner entered into an Amenities
agreement with the respondent.
3. On 22 March 2017, the petitioner issued a notice of termination
to the respondent stating that the Leave and Licence agreement and the
Amenities agreement would stand terminated upon the expiry of the
lock-in period, namely, on 1 July 2017.
4. The respondent replied to the termination notice on 30 March
2017. Asserting that the termination was not in accordance with the
terms of the Leave and Licence agreement and the Amenities agreement,
the respondent declined to refund the security deposits to the petitioner.
According to the petitioner, vacant and peaceful possession of the licensed
premises was handed over to the respondent on 13 June 2017.
SHINHAN BANK v. CAROL INFO SERVICES LIMITED
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5. On 3 July 2017, the petitioner served a notice of demand for
refund of the security deposits together with interest. The claim was
denied in a letter dated 13 July 2017. By another letter of 13 July 2017,
the respondent served upon the petitioner a notice claiming an amount
of Rs 2,59,85,856 towards the balance license fee and amenities charges
for the period between 1 July 2017 and 30 June 2018 and claimed
consequential losses amounting t

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