Delhi HC issues notice in a plea raising important issues concerning payment of rent by Cinema Halls during lockdown, doctrine of incorporation of arbitration clause, recourse in absence of force majeure clause

Delhi High Court: Sanjeev Narula, J., issued notice to the respondent in a petition filed under Section 9 [interim measures, etc. by the court] of the Arbitration and Conciliation Act, 1996.

In the instant petition, it was stated that the disputes arose between the parties pertaining to arrears of rent and other charges arising under Memorandum of Understanding (MOU).

The said MOU was originally executed between the petitioner and Adlabs Films Limited.  Subsequently, Reliance Media Works Limited stepped into the shoes of Adlabs Films Limited and later transferred its business in favour of the respondents.

The Deed of Adherence recorded that the parties had entered into the MOU and the Addendum, further it was also mentioned in the deed that the respondent agreed and confirmed that it shall be bound by all the provisions of the agreement as entered into with the original party and also the agreement shall have the full force of binding effect on the party.

Since the respondent defaulted in making payments towards rent, conducting charges and CAM charges, due under the agreements, the petitioner was constrained to issue the legal notice making the demand of Rs 2.04 Crores.

But the respondent refuted the above compliance citing the COVID-19 pandemic situation.

Petitioner’s counsel further submitted that, though the arbitration clause has not yet been invoked, but the petitioner has all intention to invoke the same.

Adding to the above it was submitted that pending the appointment of Arbitral Tribunal, urgent interim direction were necessary.

Bench directed for the issue of notice to the respondent by all modes, upon the filing of process fee, returnable on 05-04-2021.[Dart Properties (P) Ltd. v. Cinema Ventures (P) Ltd., 2021 SCC OnLine Del 990, decided on 24-02-2021]


Advocates who appeared before the Court:

For the Petitioner: Swarnendu Chatterjee, Advocate

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