THE HON’BLE Ms. JUSTICE G. ROHINI ARBITRATION APPLICATION No.74 OF 2010 DATED: 23.03.2011 Between : M/s. Anand Agros Limited, Tarnaka, Secunderabad, rep. by Its Director Sri Suri Babu .. Applicant And M/s. Haritha Bran-tech, Habshiguda, Hyderabad, Rep. by its partner Sri Yada Krishna Moorthy… Respondent THE HON’BLE Ms. JUSTICE G. ROHINI ARBITRATION APPLICATION No.74 OF 2010 ORDER : This application is filed under Section 11 (5) & (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for appointment of sole arbitrator to adjudicate upon the disputes between the parties arising out of lease deed dated 12.12.2007. The applicant is a company carrying on business in rice bran and oil extraction. It is stated that the respondent herein has taken on lease the factory premises of the applicant situated in Sy.Nos.607 & 611, Kondamadagu Village. Bibinagar Mandal, Nalgonda District vide Lease Deed dated 12.12.2007. As per the terms agreed upon, the respondent has to pay a sum of Rs.1 Lakh every month excluding electricity and maintenance charges. It is alleged that the respondent company committed default in payment of the lease amount and also abandoned the premises in the month of December, 2009. In the circumstances, the applicant got issued a notice dated 29.1.2010 calling upon the respondent to pay a sum of Rs.33,64,735/- towards the arrears of lease amount, electricity charges, maintenance charges and etc. Having received the said notice, the respondent gave a reply making false allegations and denying the claim of the applicant. In the circumstances, the applicant by notice dated 10.03.2010 invoked the arbitration clause and proposed the name of Shri Shyam Sriram, Advocate, 69, R.P. Road, Secunderabad as sole arbitrator to resolve the disputes. However the respondent by Reply dated 29.3.2010 did not agree for the arbitrator proposed by the applicant. Hence the present application before this Court under Section 11 of the Act. In the counter-affidavit filed on behalf of the respondent, the execution of the lease agreement dated 12.12.2007 has not been disputed. However it is contended that the said agreement was not acted upon and as such it was not binding on the respondent. It is also contended that since the period of lease under the lease deed was only for a period of 2 years and the lease itself came to an end on 30.11.2009, it is not open to the applicant to invoke the arbitration clause. The other allegations that the respondent committed default in payment of the lease amounts and that the respondent was liable to pay a sum of Rs.33,64,735/- have been denied. Thus it is contended that the application is not maintainable and the same is liable to be dismissed in limini. I have heard the learned counsel for both the parties. As could be seen from the material placed before this Court the execution of the lease deed between the parties is not in dispute. Admittedly the lease deed contains an arbitration clause which reads as under: “In case of any dispute or difference of opinion in the matter of interpretation, execution of carrying out the objects and functions of the company, the matter shall be referred to a mutually appointed arbitrator. The decision of the arbitrator would be binding upon all concerned.” Having regard to the allegations and counter-allegations made by the parties in the pleadings, it is apparent that the disputes arising out of the said lease deed are existing. The law is well-settled that in order to set in motion the arbitral procedure the Chief Justice or his designate has to decide the issues regarding territorial jurisdiction and as to the existence of an arbitration agreement between the parties. Even assuming that the agreement came to an end, it does not disentitle the parties to the agreement to invoke the arbitration clause since the arbitration agreement subsists for certain purposes irrespective of the termination of the agreement. So far as the contention of the respondent that the lease deed was not acted upon is concerned, it requires consideration on evidence by the arbitrator and it is not necessary for this Court to go into the same at this stage. As held by the Supreme Court in NATIONAL INSURANCE CO. LTD. v. BOGHARA POLYFAB (P) LTD.[1] it is an issue which can be left to the decision of the arbitral tribunal. For the aforesaid reasons, I am of the opinion that the applicant is justified in invoking the jurisdiction of this Court under Section 11 of the Act. Accordingly, Sri N. Subba Redy, a practising advocate of this Court (1304) is hereby appointed as the sole arbitrator. The learned Arbitrator is at liberty to fix his fees and the same shall be borne by both the parties equally. Both the parties shall file their claims before the Arbitrator and the further proceedings shall be taken up in accordance with law. Arbitration Application is accordingly allowed. No costs. ______________ G. ROHINI, J. Dt. 23.03.2011 gbs [1] (2009) 1 SCC 267