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Arbitration and Mediation

PREMISES LEASE & ARBITRATION

Sir, Let me share a few details. We had let out a premises for commercial showroom. The Agreement lease period is over. We had sent a notice to tenant to vacate and handover the premises one week prior to the expiry of Lease period after settling all pending dues to us.The tenant is still occupying the premises, 2 months, even after expiry of lease period and not paid the pending dues. Need clarification and advice regarding the above issue. 1. There is a Arbitration clause in the Agreement. After the expiry of lease period, is Arbitration clause valid and Is it mandatory to go to Arbitration court first ( even after the expiry of Lease Agreement )and then go for regular court ? If so based on which section/article no.? 2. Generally Arbitration court means additional financial implication or can we go to civil court directly . 3. On what basis the quantum of fees for Arbitration court is fixed? 4. Is it shared by tenant and landlord? 5.Will Landlord get the refund from tenant if Judgement is in favour of landlord.6. Should we pay any amount as Fees to civil court for recovery of pending dues if Arbitration is not acceptable?. 7. The pending dues is more than security deposit / advance amount with us. Please guide.

( Bangalore, Karnataka )

4 years ago

Reply

You seem to have several misconceptions. Your issues arise out of agreement only which contains arbitration clause so you have to exhaust arbitration clause. As such there is no arbitration court. On expiration of lease, the arbitration clause and other clauses like damages etc still subsist. No civil court will interfere in the matter when arbitration clause exist. Fee is decided by the arbitrator only. Fee is shared by both the parties but fee is non refundable. However, if you win arbitrator may considering the same as cost may include the same in the decree passed by the arbitrator.

Vidhikarya

Helpful

Hi
Supreme court had very clearly said Property leases come under transfer of property act and as such Arbitration act will not be applicable to the property tenancy/lease agreements.
Your remedy lies in civil court only.
Please file an eviction suit in the civil court and once you win the case, the tenant will have to pay
1) All outstanding dues.
2) Your court fees plus costs of litigation.
Hope this information is useful

Vidhikarya

Helpful

Dear Sir,
Never go for Arbitration and it will always in their favor. File a summary civil suit of eviction and get deposit the arrears of rent otherwise they have no right to contest the case. Please give me Rank 5 if you feel my answer helped you

Kishan Dutt Kalaskar

View All Answers

Helpful

Hi
Supreme court has clearly stated in various judgments that arbitration clauses in Rental are not valid.
Also in your case, the tenancy agreement has lapsed.
You should approach the civil court for
1) Recovery of unpaid rents.
2) Eviction of tenants.
At the time of filing of petition in court, you should pay the court fees and thereafter once you win the case, the court will direct the other side to pay you the monies
Court fees is dependent on the monies that you wish to claim from the other side. You may contact your lawyer who will advise you on the court fees payable (for example, if the claim amount is Rs300000, then court fees is Rs5436-/-).
Hope this information is useful.

Vidhikarya

Helpful

If the parties insert an arbitration clause in the contract and specifically name a person to act as the arbitrator, it will be valid and binding under the Arbitration and Conciliation Act, 1996 ever after expiry.