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As per case facts, the Petitioner, a real estate developer, entered into a Lease Deed with the Respondent, a hotel operator, for a commercial complex. The Petitioner paid an advance
...for technical and pre-opening services. The Petitioner alleged non-performance by the Respondent, sought a refund, and terminated the Lease Deed, subsequently invoking arbitration. The Respondent opposed this, arguing that the notice invoking arbitration and the petition were premature as the amicable resolution procedure in the Lease Deed had not been exhausted. The question arose whether pre-arbitral dispute resolution mechanisms, such as negotiation and conciliation, stipulated in the arbitration clause, are mandatory conditions precedent to invoking arbitration or merely directory, especially when parties have already attempted resolution or shown willingness to arbitrate in related matters. Finally, the Court observed extensive correspondence between the parties indicating attempts at resolution and noted the Respondent's prior willingness to refer similar disputes to arbitration with a sister concern. Citing various judgments, the Court held that pre-arbitral mechanisms for dispute resolution are directory, not mandatory, and further attempts at amicable resolution would be a futile exercise. The Court concluded that a valid arbitration clause exists and appointed a Sole Arbitrator to adjudicate the disputes.
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