Unraveling Lease Disputes: Delhi High Court Upholds Arbitral Tribunal’s Award in OYO Apartments Case
Case Title: Vivek Khanna vs. OYO Apartments Investments LLP
Date of Decision: September 18, 2023
Case Number: O.M.P. (COMM) 266/2023, CAV 377/2023, I.A. 13723/2023, I.A. 13724/2023, I.A. 13725/2023, I.A. 13726/2023
Coram: Hon’ble Mr. Justice Manoj Kumar Ohri
Introduction
The case involves a petition filed under Section 34 of the Arbitration & Conciliation Act, 1996, where the petitioner challenged an award passed by an Arbitral Tribunal.
Factual Background
This case involved a dispute between the petitioner, Vivek Khanna, and the respondent, OYO Apartments Investments LLP, regarding a Lease Agreement dated February 18, 2019, for a property in Ghaziabad. The lease had a lock-in period of 36 months, during which neither party could terminate it. The lease commencement date was February 20, 2019, but the liability to pay rent began on June 1, 2019. Disputes arose, and the respondent terminated the lease in November 2019, alleging a breach by the petitioner. The petitioner challenged the termination through arbitration, and the Arbitral Tribunal was formed.
The Arbitral Tribunal (AT) found that the termination of the lease by the respondent was illegal. However, it partially allowed some of the petitioner’s claims and awarded interest. It also awarded a sum to the respondent in its counterclaim. Both parties challenged the award in court.
Key Legal Issues
The key legal issues in this case revolved around the interpretation of the Lease Agreement terms, specifically regarding the payment of minimum guaranteed amounts, rent for the remaining lock-in period, and the legality of the lease termination.
Contentions of the Parties
The petitioner sought several claims, including outstanding rent, investment, and expenses incurred. The respondent raised counterclaims for damages, refund of business advance, and return of fixtures.
Decision of the Court
The court held that the grounds for challenging the award were limited, and the petitioner’s challenges did not fit within the narrow scope of patent illegality. The court upheld the award regarding rent arrears and the counterclaim. It found that the petitioner did not provide evidence of losses due to the early termination of the lease. Therefore, the court dismissed the petition and the pending applications.
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Written by – Ananya Chaudhary