Delhi High Court Says DDA Lease Clause Is a Valid Arbitration Agreement, Appoints Arbitrator

The Delhi High Court has cleared the path for arbitration in a decades-old dispute between Jhankar Banquets and the Delhi Development Authority (DDA), holding that their lease and licence agreements contain a valid arbitration clause.

The order was passed by Justice Jyoti Singh, who allowed two petitions filed under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996. While interpreting the dispute resolution clause, the Court observed: “Perusal of the clauses indicates that parties were ad idem with respect to the mode and method by which the dispute resolution had to take place… the agreements are in writing and hence, in my view, all attributes of an arbitration agreement… are met, leading to a conclusion that parties envisaged reference of disputes for adjudication through arbitration as a dispute resolution mechanism."

Jhankar Banquets had entered into a long-term lease agreement and a separate licence arrangement with the DDA for running a banquet and restaurant facility. Over the years, disputes arose relating to compliance issues, sealing actions, alleged delays, and financial losses. The company eventually invoked arbitration under the dispute resolution clause; however, DDA opposed the request, arguing that the clause did not amount to an arbitration agreement and that the disputes were not arbitrable.

Court rejected DDA’s objections, holding that at the stage of appointing an arbitrator, the Court is only required to examine whether a valid arbitration agreement exists. Issues such as whether the disputes fall within the scope of arbitration must be left to the Arbitral Tribunal.

Justice Singh noted: “ The second objection that the disputes sought to be raised by the Petitioner are non-arbitrable, cannot be entertained in the present petition. It is now well settled that the determination of the question of arbitrability of the disputes is to be left to the Arbitral Tribunal and is beyond the remit or domain of the referral Court under the Section 11 of the 1996 Act. The scope of enquiry, at the stage of appointment of Arbitrator, is limited to determining the existence of a valid arbitration agreement and whether the petition is barred by limitation."

Allowing the petitions, the Court appointed Dr. Amit George, Advocate, as the sole arbitrator to adjudicate the dispute. The arbitration will proceed under the Delhi International Arbitration Centre (DIAC), and the arbitrator’s fees will be determined as per the DIAC fee schedule.

The petitions were disposed of accordingly.

For Petitioner: Mr. Ravi Gupta and Mr. Ankit Jain, Senior Advocates with Mr. Aditya Chauhan and Ms. Muskaan Mehra, Advocates.

For Respondents: Mr. Sanjay Vashishtha, Mr. Siddhartha Goswami, Ms. Geetanjali Reddy and Mr. Aditya Sachdeva, Advocates.

Case Title: JHANKAR BANQUETS THROUGH ITS PARTNER MR. MAHESH KAPOOR v. DELHI DEVELOPMENT AUTHORITY

Bench: Justice Jyoti Singh

Order Date: 4 December 2025