Supreme Court rules the Arbitrability of Consumer Disputes
The Supreme Court of India, vide its judgment in M/s Emaar MGF Land Limited v Aftab Singh (Review Petition (C) Nos 2629-2630 of 2018 in Civil Appeal Nos 23512-23513 of 2017), has indisputably concluded that if a dispute brought before the consumer forum emerges from an agreement which has an arbitration clause, the consumer forum will be the proper and appropriate forum for hearing the dispute. The decision depends on the reason that consumer dispute is public and subsequently, the remedies under the Arbitration and Conciliation Act, 1996 (Arbitration Act) for the same are banished by suggestion. The Supreme Court set reliance on different landmark judgments regarding the matter of "arbitrability". It further showed how the alterations and amendments made to Section 8(1) of the Arbitration Act vide the Arbitration and Conciliation (Amendment) Act, (2015 Amendment) didn't bar the National Consumer Dispute Redressal Commission (NCDRC) from refusing to allude the dispute to arbitration.
The tendency of the Supreme Court not to overrule Ayyasamy and Booz Allen is apparent. Public policy contentions and arguments are typically outlandish as they include and involve rights in rem. An analogy might be drawn with criminal cases. All crimes of specific gravity should be fundamentally and necessarily dealt on an equal footing, in case the guilty parties affirm infringement of Article 14 of the Constitution of India on grounds of differential treatment of correspondingly arranged individuals. The rule of precedents applies with utmost meticulousness in such cases. Moreover, in consumer cases also, complaints of like nature should be managed and dealt with similarly to set a uniform standard of reparation.
Moreover, the Consumer Protection Act, 1986 is unique and special legislation, which provides a detailed mechanism for managing consumer grievances and complaints. The legislation was enacted in any case to help customers/ consumers who were aggrieved by the product or service they had bought or the service they had received in return for valuable consideration, and where remedies under the Civil Procedure Code, 1908 were either inaccessible or inefficient. The Consumer Dispute Resolution Commission intended to provide customer-specific remedies that likewise happened to be effectively and easily available, fast, and successful. Therefore, the Supreme Court must have suspected it fit to bar the alternative remedy by virtue of accessibility and availability of a specific remedy under the Consumer Protection Act, 1986.
It is not necessarily the case that the judiciary has disrespected the arbitration clause, as the decision doesn't force a general prohibition on arbitration of consumer disputes. It is just in those occurrences or instances wherein the consumer has first moved or approached the NCDRC that this judgment shall apply.
This judgment should be read considering the Consumer Protection Bill (the "Bill") which was passed by the Lok Sabha on 20 December 2018, about seven days after this judgment was articulated. The Bill provides for even more elaborate and expanded system for dispute resolution. Aside from the Consumer Dispute Resolution Commissions at the district, state, and national levels, it accommodates a Central Consumer Protection Authority, aside from Consumer Protection Councils likewise comprised at the three government levels. The Bill itself accommodates reference to the issues to mediation by the individuals from the Commission.
The Supreme Court attempted to give an agreeable and harmonious development to the two opposing situations in law alluded to above. While it didn't put aside the decisions in Ayyasamy and Booz-Allen, it gave a confined translation to the Amendment Act. The thinking given by the appointed authorities is by all accounts persuading. The Consumer Protection Act, 1986 is a government assistance enactment, with an essential target of security of oppressed purchasers, who are as a general rule in a more powerless situation than their comparing merchants or specialist organizations. In this manner, the Court thought it fit to agree with the assessment of the NCDRC to ensure the primary object of the Consumer Protection Act.