Arbitration clause in retirement deed extends to interconnected MOU forming a single composite transaction.

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

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

While the Retirement Deed contained an arbitration clause (Clause 13), the MOU—which detailed the financial settlement—did not

The Petitioner alleged non-payment of the consideration and sought appointment of an arbitrator under Section 11 and interim measures under Section 9 of the Arbitration and Conciliation Act, 1996

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

Whether an arbitration agreement exists for disputes arising out of an MOU that lacks an arbitration clause but is part of a composite transaction involving a Retirement Deed that contains such a clause

Whether the Court should grant interim measures to preserve the "security" property (5,000 sq. ft. area) pending the arbitral proceedings

The Court applied the "Composite Transaction" doctrine, establishing that where multiple agreements are interlinked to achieve a common commercial goal, an arbitration clause in the "mother" or "principal" agreement can bind parties across the ancillary agreements

It relied on *Ameet Lalchand Shah v. Rishabh Enterprises* (2018), which held that disputes in single commercial projects involving multiple agreements should be resolved via a composite reference to arbitration

It further applied the principles from the Constitution Bench in *Cox and Kings Ltd. v. SAP India Pvt. Ltd.* (2024), which affirmed that for interlinked transactions, performance of the principal agreement may not be feasible without the ancillary agreements

The Court found that all four documents executed on 16 October 2017 were part of a single, composite transaction aimed at the Petitioner's exit from the firm

The Retirement Deed was identified as the "principal" document, while the MOU was merely a "follow-up" to provide the methodology for paying the exit consideration

The Court rejected the Respondents' argument that the MOU’s "entire agreement" clause precluded arbitration, noting that the MOU had no independent existence and specifically referred to the Retirement Deed

Regarding interim measures, the Court held that the 5,000 sq. ft. area constituted the "subject matter" of the dispute as it served as contractually agreed security

The Court maintained the previous order of the Court Receiver taking possession of five specific units (totaling approx. 4,920 sq. ft.) to ensure the effectiveness of a potential future award

Justice Sadhana Jadhav (Retd.) was appointed as the Sole Arbitrator

The Court granted interim relief by directing the Court Receiver to retain physical possession of Unit Nos. 1305, 1009, 1110, 1101, and 1001, and restrained the Respondents from creating any third-party rights in these units until the final award

Both the Section 11 Application and Section 9 Petition were disposed of with these directions