Siesta Hospitality Services Ltd v. Spicejet Ltd

NAVIN CHAWLA, J DECEMBER 07, 2017/rv

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP (COMM) NO. 465/2016 Reserved on:24th November, 2017 Date of decision: 07th December, 2017 SIESTA HOSPITALITY SERVICES LTD. ..... Petitioner Through: Ms.Awantika Manohar, Mr.Dhawesh Pahuja, Advs. versus SPICEJET LTD. ...... Respondent Through: Mr.Samrat Nigam, Mr.Abhimanyu Wali, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner Siesta Hospitality Services Ltd. challenging the Arbitral Award dated 06.12.2014 passed by the Sole Arbitrator dismissing the claim filed by the petitioner holding as under :- "The Prayer of the Claimant to declare that the action of the Respondent in terminating the Agreement on 13.10.2008 was illegal, arbitrary and contrary to the provisions of the Agreement dated 14.02.2008 cannot be sustained as the relationship between the parties in regard to the properties at Powai and Malad was not governed by the Agreement (Exhibit C-2). It was governed by the e-mails dated 02.11.2007 and 06.11.2007 which clearly indicate that relationship was on temporary basis and could be terminated any time. The termination procedure as laid down in the Page 2 Agreement dated 13.02.2008 was not incorporated in the e-mails. Therefore, the Claimant is not entitled to the declaration also as prayed". 2. The learned counsel for the petitioner submits that the Award is vitiated by patent illegality appearing on the face of the same in as much as the Arbitrator has not only failed to consider "Annexure-I" to the Service Agreement dated 14.02.2008 executed between the parties to the present petition, but also the reply dated 17.12.2008 sent by counsel for the respondent to the legal notice dated 10.11.2008 of the petitioner and the letter dated 18.02.2010 of the counsel for the respondent agreeing to the amendment of the Arbitration Clause contained in the Service Agreement and agreeing to the appointment of the Sole Arbitrator. 3. It is submitted that the Arbitrator, himself being appointed under the Service Agreement could not have concluded that the Service Agreement itself is inapplicable to the disputes between the parties. The learned counsel for the petitioner has further drawn my attention to the reply to the statement of claim filed by the respondent herein to contend that even in the reply, the plea taken was not that the Service Agreement is not applicable to the claim of the petitioner, but that the Service Agreement was void for uncertainty. 4. On the other hand, the learned counsel for the respondent submits that the Sole Arbitrator having construed the terms of the agreement and having concluded that the same is not applicable to the two properties in question, this Court cannot substitute such finding while exercising its jurisdiction under Section 34 of the Act. Page 3 5. I have considered the submissions made by the parties. The learned Arbitrator has placed reliance on the e-mails dated 02.11.2007 and 06.11.2007 to conclude that the properties in disputes would be governed by these e-mails and not by the Service Agreement. E-mail dated 02.11.2007 suggests that a "Master Service Agreement" was attached thereto. This e- mail was in relation to the property at Malad. There is another e-mail dated 06.11.2007 from the petitioner to the respondent which states that the parties would be entering into a "Pan India Tie Up". E-mail dated 15.11.2007 from the respondent to the petitioner speaks of premises at Mumbai, Ahmedabad, Kolkata and Chennai. There are other e-mails also exchanged between the parties. These e-mails pre-date the Service Agreement dated 14.02.2008. Clearly, the parties were negotiating for hiring of corporate residence facility by the respondent from the petitioner in various cities and this eventually culminated into the 'Service Agreement' dated 14.02.2008. A few terms of the Service Agreement, r