Litigation like OTT shows, its stages like successive seasons: Delhi High Court

Litigation like OTT shows, its stages like successive seasons: Delhi High Court

A party to an arbitration agreement must apply in writing to refer the parties to arbitration, the court held

With the proliferation of Over-the-Top (OTT) platforms, litigation is akin to the shows on such platforms and its stages are similar to the successive seasons of these shows, a division bench of the Delhi High Court (HC) recently ruled in Alok Kumar Lodha versus Asian Hotels.

Justice Rajiv Sahai Endlaw observed: "This has also been the season of lockdowns and having an opportunity to watch OTT media platforms and which, as distinct from watching cinema, compressing the story in three odd hours, have shows where the story spans several seasons with each season comprising of several episodes. Holding Court, during the pandemic, virtually from our respective homes instead of from the Courtrooms has also given us an opportunity to look at litigation differently and we could not but notice the similarity of litigation with the dramas/shows comprising of several seasons which we have now also had the occasion to watch."

Not only the stages of litigation are similar to successive seasons of OTT shows but other aspects of litigation too resemble them, the court said. Justice Endlaw further said, "We will thus give this judgment, the flavour of the seasons of the dramas/shows," before penning the rest of the judgment in an unique "seasonal style". The division bench also comprising Justice Asha Menon was hearing an appeal related to a single Judge bench order.

The Court noted: "The season one of this litigation opened with the filing of the suits, from which these appeals arise, on the original side of this Court, by persons/entities claiming to be occupants of the Shopping Arcade in Hyatt Regency Hotel, Bhikaji Cama Place, New Delhi (hereafter for the sake of convenience and without attributing any legal rights thereto, called as 'Occupants'), with the script in the form of plaint, penned by their counsel. The first episode of season one opened when the suits first came up before the commercial division of this Court."

According to the Occupants, the licenses in their favor in respect of the shops were irreversible and for all time which is why the defendant – Asian Hotels (North) Limited's termination was unlawful. The defendant raised concern about the suits' maintainability under the Arbitration and Conciliation Act, 1996, Section 8.

The Single Judge, after hearing the parties for "several dates/episodes, drew curtains to the first season" by setting aside the suit owing to arbitrability of disputes. Both the Hotel and the Occupants favoured an appeal against the judgments for various reasons.

The Court observed: "The story having thus remained incomplete, both are in appeal in this second season of the litigation, scripted by the counsel for the Occupants as well as the counsel for the Hotel. In subsequent episodes of this second season, the counsel were heard on 24th September, 2020; 12th October, 2020; and 6th November, 2020, when the order/judgment was reserved."

Construing Section 8 as allowing verbal application could lead to trouble because the defendant's counsel could have the suit referred to arbitration or disposed of simply based on a Vakalatnama, the Court opined. A party to the arbitration agreement must apply in writing to refer the parties to arbitration, the Court said, adding that an oral prayer was insufficient.

The Court said: "It cannot be lost sight of that all suits where a plea of Section 8 may be required to be taken, do not have such a high profile star cast as in the two seasons of this litigation and whose verbal argument carries weight, and to hold the plea of Section 8 to be maintainable, if taken verbally, is fraught of complications and such an interpretation has to be always avoided." Further, since the Single Judge's order was short of Section 8's vital needs, it was not a judicial authority's order directing the parties to arbitration, the Court held. Hence the bar under the Arbitration Act Section 37 to these appeals' maintainability was not applicable, the Court said.

It said, "… the order of dismissal of suits on a verbal plea of Section 8 is not an order referring the parties to arbitration under Section 8, so as to be not appealable under Section 37." Accordingly, the Single Judge's order was dismissed. The Court decided, "We, as students of law, shall wait for the third season, if any."