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Disputes that cannot be resolved through arbitration.
Disputes that cannot be resolved through arbitration
The Arbitral Tribunal may be a private forum exclusively chosen by the parties to the dispute to urge their civil or commercial disputes to get adjudicated. Every civil and commercial dispute can be adjudicated by arbitration unless the jurisdiction of the Arbitral Tribunal is barred from doing so. The Arbitration and Conciliation Act, 1996 does not explicitly exclude the category of civil or commercial disputes from arbitrability.
Section 8 of the Act casts an obligation on the Judicial Authority to ask for arbitration in terms of the Arbitration Agreement. The Act doesn't exclude the category of disputes which are to be treated as non-arbitrable. However, the courts in certain disputes refuse to refer the parties to arbitration under Section 8 of the Act. Under Indian law, the kinds of disputes that can't be resolved by arbitration include:
- Criminal offences.
- Matrimonial disputes.
- Guardianship matters.
- Insolvency petitions.
- Testamentary suits.
- Trust disputes.
- Labour and industrial disputes.
- Tenancy and eviction matters governed by rent control statutes.
While there's no definitive decision on the problem, existing jurisprudence suggests that disputes involving competition law problems are also not arbitrable. Generally, disputes in rem which are regarding a thing or property can't be resolved through arbitration, while disputes in personam regarding a selected person are often. The law also prohibits regard to arbitration where a specialist forum has been found out to resolve specific sorts of disputes, like consumer disputes.
The Supreme Court recently clarified that allegation of fraud alone isn't sufficient grounds for courts to refuse to refer parties to the arbitration. This was reiterated in the case of Vidya Drolia v Durga Trading Corporation[1]. It held that allegations of fraud would only be a ground to refuse relation to arbitration:
- Where the article or agreement itself can't be said to exist.
- If the allegations are made against the state or state institutions, thereby requiring public enquiry.
The Supreme Court recently held within the same case during a broad-reaching statement that "intra-company" disputes aren't arbitrable. this is often likely to incorporate disputes involving oppression and mismanagement claims in shareholder disputes, on which some courts had taken an inconsistent view. However, this area of law is predicted to evolve within the coming months since the court’s findings were supported little analysis. The implications are pretty vast, and therefore, the outcome is discrepant with previous jurisprudence.
There remains some uncertainty about the arbitrability of property (IP) law disputes. The prevailing view is that while disputes concerning IP rights are in themselves not arbitrable, subordinate rights in personam within the nature of economic arrangements concerning the utilisation of IP rights are arbitrable.
[1] Civil Appeal No. 2402 of 2019
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.
- Under Indian law, the kinds of disputes that can't be resolved by arbitration include: Criminal offences. Matrimonial disputes. Guardianship matters. Insolvency petitions. Testamentary suits.
- While there's no authoritative decision on the problem, existing jurisprudence suggests that disputes involving problems with competition law also are not arbitrable.
- The prevailing view is that while disputes concerning IP rights are in themselves not arbitrable.
