Exclusive jurisdiction clause regarding appointment of arbitrator shall prevail over the seat clause

Brief Facts

Cars24 Services Pvt. Ltd. (“Applicant”) and Cyber Approach Workspace LLP (“Respondent”) entered into a lease deed, whereby the Respondent leased a premises to the Applicant for running an office. The Applicant was to deposit an interest free refundable security deposit of INR 5.28 million and pay the monthly lease rental of INR 0.73 million to the Respondent. Owing to the COVID-19 pandemic, the Applicant claimed that it had to suspend its operations completely. The Applicant issued a notice to the Respondent seeking to terminate the lease deed, invoking Clause 13.2 thereof (which dealt with force majeure). Correspondingly, the Applicant requested the Respondent to refund the interest free refundable security deposit of INR 5.28 million paid by it. The Respondent denied any liability towards the Applicant.

Thereafter, the Applicant issued a separate notice invoking arbitration for the resolution of the dispute in accordance with Clauses 25.2 to 25.4 of the lease deed. The said provisions of the lease deed provided that disputes shall be referred to a sole arbitrator to be appointed mutually by the parties, failing which either party may approach a court of competent jurisdiction in Haryana for appointment of the sole arbitrator. The seat of arbitration was provided as New Delhi. The Applicant’s notice also suggested the name of an advocate as the sole arbitrator. However, the Respondent rejected the Applicant’s suggestion to appoint the advocate and instead recommended the name of Hon’ble Mr. Justice Badar Durrez Ahmed, J.

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