High Court order on expiry of lease agreement

Hyderabad: Justice M S Ramachandra Rao of the High Court at Hyderabad has declared that if a lease agreement between parties has expired, so does a clause of arbitration.

The judge was dealing with a revision petition filed by Viom Networks questioning an order of the City Civil Court refusing to stay a suit on the basis of an arbitration agreement between the parties.

It is the case of the plaintiff that the lease itself had expired prior to the filing of the suit and therefore the suit filed by the plaintiff for the removal of a cell tower and electricity power generator from the land in question was not maintainable.

Justice Ramachandra, after dealing with the case law of the matter, pointed out that once the period ended, the relationship between the parties would cease to be governed by the lease deed and that once the lease deed became redundant, any clause contained in it also would cease to be of any relevance to the parties.

The judge further ruled that if there was an effective arbitration clause between the parties, the court was bound to stay the suit and consider referring the matter to arbitration.