Arbitration – Lease Deeds – Exclusion of disputes of eviction and lease rentals

Judgment dated 9.6.2025 of the High Court of Bombay in Arbitration Appeal (Stamp) No.12153 of 2021 of HLV Limited   Vs.   Airports Authority of India with connected matters.   

There were three lease deeds of 1983 between the parties in respect of the land of AAI for hotel and a flight kitchen, for a period of 30 years. Another lease deed of another land for a hotel wing was executed in 1996 and valid till 31.3.2024.  The lease deeds contained arbitration clause and also a clause that the land would be deemed to be public premises under the Public Premises (Eviction of Unauthorised Occupants) Act,1971.  HLV filed section 11 applications.

The question is whether the proceedings for eviction and recovery of lease rentals falls within the scope of arbitration agreement or Public Premises Act.  Clauses 35 of the Lease Deeds and Clause 37 of the subsequent lease deed provide that all the disputes concerning the Agreement except the disputes to which the Public Premises Eviction Act applies would be outside the scope of the arbitration agreement. Conjoint reading of two clauses of the Lease Agreements show that the parties had explicitly decided that any dispute relating to eviction from the leased land was to be excluded from arbitration.

Once the parties have consciously made a contractual choice to arbitrate on specific disputes, along with an integral conscious choice to exclude specific disputes from arbitration, it is their bounden duty to abide by the terms of their arbitration agreement. It was an integral and critical condition of contract that the land leased by AAI to Leela would be deemed to be public premises and that any facet of disputes and differences relating to eviction from public premises would stand excluded from arbitration. Therefore, the parties agreed that there is no arbitration agreement in existence in relation to the subject matter of eviction. In these circumstances, even if the wider commercial agreement between the parties was one of a joint venture, that proposition would by no means erode the agreed contractual position that disputes over eviction from the leased land is agreed as not being arbitrable.

AAI had initiated eviction proceedings.   In the said proceedings, HLV filed applications under Section 8 AA on the ground that the parties have an arbitration agreement that covers the disputes including eviction between the parties.  The Eviction Officer had dismissed section 8 applications by the order dated 5.5.2021.  This is challenged in the appeals under Section 37 AA read with Section 28K of the AAI Act.