Delhi High Court Refers PhysicsWallah Lease Dispute To Arbitration Despite 'Inelegantly Drafted' Clause

The Delhi High Court has, on Wednesday, referred a lease dispute between edtech company PhysicsWallah Ltd. and three other individuals to arbitration.

The court held that an arbitration clause, even if inelegantly drafted or lacking precision in its phraseology, can still constitute a valid arbitration agreement if it sufficiently reflects the parties' intention to arbitrate.

Justice Harish Vaidyanathan Shankar appointed Advocate Mohini Bhat as the Sole Arbitrator to adjudicate the dispute valued at approximately ₹7 crore. The Court clarified that its role at the Section 11 stage is limited to a prima facie examination of the existence of an arbitration agreement rather than adjudicating contested factual or legal issues.

“This Court is of the view that, although Clause 26 is inelegantly drafted and lacks precision in its phraseology, the same sufficiently reflects the intention of the parties to resolve inter se disputes through arbitration,” the Bench held.

The dispute concerns a Lease Deed dated February 22, 2023, in respect of which the landlords sought appointment of an arbitrator under Clause 26.

Clause 26 of the agreement provided that, “in case of any dispute, both parties shall be approaching a mutually agreed arbitrator for resolving the problem. If the dispute continues further then the parties can move to Delhi jurisdiction.”

After disputes arose in relation to the lease arrangement, the landlords issued a statutory notice dated January 23, 2026 under Section 21 of the Arbitration and Conciliation Act, 1996, invoking arbitration under the clause.

PhysicsWallah opposed the move. It argued that Clause 26 only contemplated the appointment of an arbitrator by mutual consent and did not create a binding obligation to resolve disputes through arbitration, especially since it also referred to “Delhi jurisdiction.”

The landlords, on the other hand, argued that the clause clearly reflected the parties' intention to arbitrate disputes. They said the reference to “Delhi jurisdiction” contemplated recourse to the competent court to facilitate the arbitral process if the parties failed to agree on an arbitrator.

The Court reiterated that while exercising jurisdiction under Section 11 of the Arbitration Act, it is required to confine itself to a prima facie examination of the existence of an arbitration agreement. It said it cannot undertake a detailed adjudication of issues reserved for the arbitral tribunal.

Regarding the language of the Lease Deed, the Court found merit in the landlords' submissions.

It noted that the reference to Delhi jurisdiction was “reasonably capable of being construed as conferring jurisdiction upon this Court to facilitate constitution of the Arbitral Tribunal in event the parties fail to arrive at a consensus regarding appointment of an Arbitrator.”

The court accordingly appointed Mohini Bhat as the Sole Arbitrator to adjudicate the disputes.

It directed the arbitrator to furnish the disclosures required under Section 12(2) of the Act. The arbitrator's fees and arbitral costs will be shared equally by the parties.

All rights and contentions of the parties in relation to their claims and counterclaims were left open for the arbitrator to decide on merits in accordance with law.

For petitioners (Akash Katyal & Anr.): Advocates Prabhjit Jauhar, Shreya Narayan, Shreyangana Bag, Misha Thakur.

For respondents (PhysicsWallah Ltd. & Anr.): Advocates Shashwat Mukherjee, Aditya Maheshwari.