There is no hard and fast rule to include or not the arbitration clause in any contract. Its a tool for alternate dispute resolution system rather approaching to court for any dispute arising out of a contract. There is no bar for arbitration clause to be included in Leave & License agreement.
In Maharashtra in a properly drafted and registered Leave and License Agreement, the competent authority can decide the dispute summarily hence insertion of an arbitration clause will certainly be a misfit and not at all in favour of licensor.
leave and license agreement is governed under Mah Rent Control Act. In Mumbai Competnent authority is in Mhada buiding, wherein licensor can make application for eviction of licensee. every dist. has one competent authority which deals with proceeding regarding leave and license agreement. however, agreement is to be registered.