Arbitration clause in a retirement deed extends to a simultaneously executed, interconnected MOU for composite transactions.

The Applicant/Petitioner was a partner in Respondent No. 1, a firm developing 'Ventura Commercial Hub'.

On 16 October 2017, the parties executed four simultaneous documents to facilitate the Petitioner’s exit: a Retirement-cum-Partnership Deed, a Deed of Cancellation, an Allotment Letter for 5,000 sq. ft. of space, and a Memorandum of Understanding (MOU).

The Retirement Deed contained an arbitration clause (Clause 13), but the MOU, which detailed the payment of ₹17.60 crores as consideration for retirement, did not.

The Respondents defaulted on payment.

The Petitioner sought appointment of an arbitrator under Section 11 and interim measures under Section 9 of the Arbitration Act to secure the 5,000 sq. ft. area.

Respondents contested the existence of an arbitration agreement for disputes arising from the MOU.

Whether an arbitration clause contained in a Retirement Deed can be invoked for disputes arising out of a mid-transaction MOU that lacks such a clause but forms part of a composite transaction.

Whether the "doctrine of election" bars the Petitioner from seeking arbitration when the MOU provides for specific consequences of default, such as reinstatement of partnership.

The Court applied Section 11 and Section 9 of the Arbitration and Conciliation Act, 1996.

It relied on the principle of "composite transactions" established in *Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc.*, which holds that non-signatories or ancillary agreements can be bound by an arbitration clause in a mother agreement if they are part of a single commercial project.

This was reinforced by *Ameet Lalchand Shah v. Rishabh Enterprises*, where the Apex Court held that interconnected agreements executed for a common object must be referred to arbitration collectively.

The Court also cited the Constitution Bench in *Cox and Kings Ltd. v. SAP India Pvt. Ltd.*, affirming that in composite transactions involving multiple agreements, the court must assess if the agreements are consequential or follow-ups to the principal agreement.

The Court determined that the Retirement Deed was the "principal/mother document" while the MOU and Allotment Letter were ancillary documents executed to give effect to the Petitioner’s exit.

Since all four documents were executed on the same day for the sole purpose of the Petitioner’s retirement, they constituted a single commercial transaction.

The Court rejected the Respondents' "entire agreement" argument, noting that the MOU was inseparably intertwined with the Retirement Deed and had no independent legs to stand on.

Regarding the doctrine of election, the Court held it inapplicable because the Arbitral Tribunal, not the Court at this stage, should decide whether the Petitioner is entitled to monetary consideration or reinstatement.

The Court found it necessary to preserve the 5,000 sq. ft. area as it forms the subject matter of the dispute and acts as security for the agreed consideration.

It answered Issue 2 in the negative, leaving the choice of relief to the Arbitral Tribunal.

The Court allowed the Section 11 application, appointing Smt. Justice Sadhana Jadhav (Retd.) as Sole Arbitrator.

Under Section 9, it directed the Court Receiver to retain physical possession of five specific units (totaling 4,920 sq. ft.) and restrained Respondents from creating third-party rights therein pending the final award.