The Supreme Court, in a ruling, allowed arbitration in a property dispute, emphasizing the expansive language of the arbitration clause within the Tripartite Agreements. Rejecting contentions that a suit for deed cancellation rendered the dispute non-arbitrable due to its action in rem, the Court affirmed that cancellation of a deed constituted an action in personam and, thus, was arbitrable.
The Court noted that the Tripartite Agreements formed the foundational basis for subsequent agreements between the parties, including those central to the present dispute. Although the Conveyance Deed and Development Agreements lacked specific arbitration clauses, the Court upheld the lower court’s decision to refer the matter to arbitration based on the comprehensive arbitration clause in the underlying Tripartite Agreements.
Justices Aniruddha Bose and Sudhanshu Dhulia remarked, “The Trial Court and the High Court have rightly held that the broad language of the ‘arbitration clause’ in the two Tripartite Agreements…would cover the dispute raised by the appellants before the Civil Court, and hence the case has been rightly referred for arbitration.”
The appellants, acting as plaintiffs in a civil suit, sought the nullification of the Conveyance Deed and the valid termination of registered Development Agreements. The defendants, now respondents, invoked Section 8 of the Arbitration & Conciliation Act, 1996, asserting that the arbitration agreements within the Tripartite Agreements warranted arbitration. The trial court, subsequently affirmed by the Bombay High Court, upheld the Section 8 application, leading the matter to the Supreme Court.
The pivotal consideration lay in the arbitration clause contained in the Tripartite Agreements, stipulating the resolution of disputes under the Arbitration & Conciliation Act, 1996, in case of any conflicts arising from the agreement.
The Court extensively discussed the limited role of a ‘Court’ in arbitration matters and highlighted the 2015 amendments to the Act. Post-amendment, the Court’s scrutiny primarily focuses on the existence of a valid arbitration agreement.
Referring to the case’s facts, the Court emphasized the Tripartite Agreements’ pivotal role in subsequent agreements and underscored the broad scope of the arbitration clause.
Furthermore, the Court dismissed contentions that the dispute fell under non-arbitrable categories, citing precedents such as Booz Allen and Hamilton Inc. v. SBI Home Finance Limited and Others, and VidyaDrolia v. Durga Trading Corpn. It differentiated the present case from the non-arbitrable scenarios outlined in the aforementioned precedents.
Addressing objections regarding the nature of the dispute being an action in rem and allegations of fraud, the Court referred to precedents such as Deccan Paper Mills v. Regency Mahavir Properties and emphasized that the suit for cancellation of a deed constitutes an action in personam. Additionally, it dismissed unsubstantiated claims of fraud, stressing that serious fraud allegations are required to oust an arbitrator’s jurisdiction.
The conclusion reached by the Court reflects a careful examination of the presented facts and the context surrounding the case. Despite the appeal made, the Court chose not to interfere with the decisions made by the lower courts. This decision implies a recognition of the legitimacy and thoroughness of the lower courts’ findings. By dismissing the appeal, the Court upheld the integrity of the judicial process and affirmed the rulings previously made, suggesting a deference to the judgments rendered by the lower courts based on the evidence and legal considerations presented before them.