Arbitration clause in a retirement deed extends to a simultaneous MOU lacking such clause in a composite transaction.

The Petitioner was a partner in Respondent No. 1, a firm developing the ‘Ventura Commercial Hub’ project.

On 16 October 2017, the parties executed a series of documents to facilitate the Petitioner’s exit: (i) a Retirement-cum-Partnership Deed, (ii) a Deed of Cancellation, (iii) an MOU for payment of ₹17.60 Crores, and (iv) an Allotment Letter for 5,000 sq. ft. as security.

The Retirement Deed contained an arbitration clause, but the MOU—which detailed the payment terms—did not.

When the Respondents failed to pay the consideration, the Petitioner filed for interim measures under Section 9 and appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

The Respondents opposed the applications, arguing that the dispute arose from the MOU, which lacked an arbitration agreement.

Whether an arbitration clause contained in a Retirement Deed can be invoked to resolve disputes arising out of a simultaneously executed MOU that lacks such a clause but forms part of a composite transaction.

Whether the Petitioner is entitled to interim measures for the preservation of property offered as security under the MOU during the pendency of arbitration.

The Court applied the principle of "composite transactions" under the Arbitration and Conciliation Act, 1996.

It relied on the Apex Court’s rulings in *Ameet Lalchand Shah v. Rishabh Enterprises*, which held that even if an ancillary agreement lacks an arbitration clause, it can be referred to arbitration if it is integrally connected to a "mother agreement" containing the clause.

This was supported by the Constitution Bench in *Cox and Kings Ltd. v. SAP India Pvt. Ltd.*, which affirmed that in composite transactions involving multiple interlinked agreements, the arbitration clause in the principal agreement binds the parties across the transaction.

The Court also referenced *Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc.* regarding the commonality of subject matter in composite nature transactions.

The Court reasoned that the four documents executed on 16 October 2017 were inseparable components of a single commercial objective: the Petitioner’s exit from the firm.

The Retirement Deed was identified as the "mother document," while the MOU was merely the mechanism to give shape to the financial commercials of that retirement.

The Court rejected the Respondents' argument that the MOU was a standalone contract, noting that the MOU itself referred to the Retirement Deed and provided for the reinstatement of the Petitioner as a partner in case of default, thereby maintaining a continuous jural link to the original partnership.

Consequently, the arbitration clause in the Retirement Deed was held to govern disputes regarding the non-payment of consideration stipulated in the MOU.

Regarding interim relief, the Court found it necessary to preserve the 5,000 sq. ft. area as it constituted the "subject matter of arbitration" and acted as security for the Petitioner's claim.

The Section 11 application was allowed, appointing Smt. Justice Sadhana Jadhav as the Sole Arbitrator.

Under Section 9, the Court granted interim measures, directing the Court Receiver to retain physical possession of five specific units (totaling approximately 4,920 sq. ft.) and restraining the Respondents from creating any third-party rights in said units until the final award is made.