Delhi HC appoints arbitrator to resolve PVR INOX, Ansal Plaza Mall dispute

PVR INOX has filed a claim of approximately Rs 4.5 crore against Ansal Plaza Mall in Greater Noida, seeking arbitration to address the issue

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The Delhi High Court has intervened to address the ongoing dispute between PVR INOX and Ansal Plaza Mall in Greater Noida, appointing an arbitrator to resolve the conflict. PVR INOX alleged that its four-screen multiplex at Ansal Plaza Mall was sealed due to unpaid government dues by the lessor, Sheetal Ansal, leading to significant financial losses for the cinema chain.

PVR INOX - Ansal Plaza Mall dispute

PVR INOX, represented by advocate Sumit Gehlot, has filed a claim of approx Rs 4.5 crore, seeking arbitration to address the issue. The dispute originated from a registered lease agreement dated June 7, 2018, under which PVR INOX took over a four-screen multiplex space on the 3rd and 4th floors of Ansal Plaza Mall, Knowledge Park-1 in Greater Noida.

According to the lease agreement, PVR INOX deposited Rs 1.26 crore as security and made substantial investments in moveable assets, including furniture, equipment, and interior works, to operate its multiplex.

On June 6, 2022, Ansal Property and Infrastructure Ltd was issued a notice by the SDM Gautam Budh Nagar Sadar to recover Rs 26.33 crore in statutory dues. PVR INOX asserted that it had made several requests to the lessor to address the issue, however, failure to do so led to the sealing of the mall, which included the PVR INOX theatre the following month.

PVR INOX’s claims against Ansal Plaza Mall

PVR INOX alleged that the lessor was responsible for all taxes and dues according to the lease terms. Additionally, the company claims that its multiplexes were sealed due to Ansal’s failure to meet its obligation, resulting in significant financial losses.

PVR INOX is therefore, seeking approximately Rs 4.5 crore in compensation from the lessor. This includes its lease security deposit of Rs 1.26 crore, CAM security deposit of Rs 6 lakh, Rs 10 lakh for moveable assets, Rs 2,06,65,166 for movable and immovable assets with interest, and Rs 1 crore for business losses, reputation, and goodwill.

PVR INOX filed two petitions under Section 11 of the Arbitration & Conciliation Act, 1996, in the Delhi High Court, after receiving no response from the lessor, following the termination of the lease.

Ansal’s lawyer informed the Court that they have a counter-claim against PVR INOX, potentially amounting to Rs 4 to Rs 5 crore, which should also be considered in the arbitral proceedings.

Delhi HC appoints arbitrator to PVR INOX-Ansal Plaza Mall dispute

In a ruling by Justice C Hari Shankar, the High Court acknowledged the existence of an arbitrable dispute between the parties, which required resolution through arbitration as outlined in the arbitration clause. Since the parties could not agree on an arbitrator, the Court appointed one to arbitrate the disputes. The Court also noted that Ansal would be entitled to raise all legal objections, including counterclaims, before the arbitral tribunal.

On July 30, 2024, Justice C Hari Shankar appointed an arbitrator to adjudicate the claim. The decision aims to resolve the complex financial and legal issues between PVR INOX and Ansal Plaza Mall, potentially impacting the operations and financial stability of both entities. The arbitration process will now proceed, with both parties presenting their claims and counterclaims before the appointed arbitrator.

(With agency inputs)