Facts: ISON Builders LLP, the Petitioner-Developer, filed a Commercial Arbitration Petition seeking interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, to stay a termination notice issued by Om Sai Ram Cooperative Housing Society (Proposed) & Ors., the First Respondent. The Society terminated a Development Agreement executed in favor of the Petitioner, and the Petitioner sought an injunction against the Society and its members from appointing another developer. The land in question is owned by the Municipal Corporation of Greater Mumbai (MCGM) and has 28 tenanted structures. The Society resolved to appoint the Petitioner as the developer in 2014, and a Development Agreement was executed. The Petitioner claims to have submitted a redevelopment proposal under Regulation No. 33(7) of Development Control Regulations, 1991 (DCR 1991).
Procedural Posture: The Petitioner filed Commercial Arbitration Petition (L) No. 36533 of 2025 under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures. Additionally, Commercial Arbitration Application (L.) No. 37280 of 2025 was filed under Section 11 of the Arbitration Act for the appointment of an arbitrator. Both petitions were heard analogously.
Issue: Is the Petitioner-Developer entitled to interim measures under Section 9 of the Arbitration and Conciliation Act, 1996, to stay the termination of the Development Agreement, considering the delays in the project and the Society's decision to appoint a new developer? Should an arbitrator be appointed to adjudicate the disputes?
Holding: The Court dismissed the Commercial Arbitration Petition (L.) No. 36533 of 2025, denying the interim measures sought by the Petitioner. However, the Court allowed Commercial Arbitration Application (L.) No. 37280 of 2025 and appointed Smt. Justice Anuja Prabhudesai, former Judge of the Court, as the Sole Arbitrator.
Reasoning: The Court found that the Petitioner was responsible for significant delays in the project, particularly in conducting consent verification and providing necessary financial documents to MCGM. The Society and its members could not be made to wait indefinitely for the Petitioner to take necessary steps. The Court also noted that the Petitioner was attempting to transfer the project to another developer, indicating a motive to profit without completing the project. The Court emphasized that the rights of the society members to have their dilapidated buildings redeveloped outweighed the Petitioner's interest in earning profits. The Court cited previous judgments, including Huges Real Estate Developers LLP, to support the principle that redevelopment should not be stalled due to delays caused by the developer. The Court also considered the provision for change of developer under the revised guidelines dated 17 November 2020. While acknowledging that the Development Agreement could be specifically performed, the Court held that this did not automatically entitle the Petitioner to interim measures, given the specific circumstances of the case.