Dispute Over Property Sale: Delhi High Court Appoints Arbitrator for Resolution.
07 October 2024
Arbitration >> Corporate Law | Property Dispute Asbestos >> Property & Real Estate
The petitioner has approached the court under Section 11(5) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator for resolving disputes with the respondents arising from an Agreement to Sell and Purchase dated 24.11.2005. The respondents sold an industrial plot to the petitioner, and later, in 2007, the plot was withdrawn from the respondents and allotted to another party. When the petitioner discovered the plot was in the possession of a third party in 2020, he sought compensation from the respondents, but they denied executing the agreement. Consequently, the petitioner sent a legal notice demanding compensation, which was rejected by the respondents.
The petitioner invoked the arbitration clause in the agreement, which provides that any dispute related to the property shall be referred to an arbitrator. The respondents objected, arguing that the claim was barred by limitation and that arbitration was not possible due to the involvement of a third party. They relied on a judgment suggesting that disputes involving third-party rights are non-arbitrable.
However, the court emphasized that at the stage of appointing an arbitrator, the inquiry is limited to the existence of an arbitration agreement. The issues of limitation and the third party’s involvement could be decided by the arbitrator. The court appointed Mr. Shobhit Chaudhary as the Sole Arbitrator to adjudicate the dispute under the rules of the Delhi International Arbitration Centre (DIAC). The arbitrator's fees would follow DIAC's schedule, and they were also instructed to file a disclosure under Section 12(2) of the Arbitration Act. The petition was disposed of with all rights and contentions left open for adjudication by the arbitrator.
Section 11, Arbitration and Conciliation Act - 1996
Section 12, Arbitration and Conciliation Act - 1996
Arbitration and Conciliation Act, 1996