15 December 2023 Arbitration >> Corporate Law   |   Property Law >> Personal Law  

The Supreme Court of India recently weighed in on a property dispute, upholding the enforcement of an arbitration clause in a series of agreements. The case involved a conveyance deed challenged by the wife and son of the deceased owner, who sought to have it declared null and void. They also wanted certain development agreements terminated.

The opposing party, a company established by the deceased and his wife, argued that the dispute should be settled through arbitration as per clauses in two tripartite agreements. The lower courts agreed, referring the matter to arbitration. The wife and son appealed this decision to the Supreme Court.

The Supreme Court dismissed the appeal, siding with the enforcement of arbitration. Here's a breakdown of the Court's reasoning:

• Valid Arbitration Clause Exists: There was no dispute regarding the existence of a valid arbitration clause within the tripartite agreements.
• Broad Clause Encompasses Dispute: The Court found the wording of the arbitration clause broad enough to encompass the specific dispute raised by the appellants.
• Property Subject to Tripartite Agreements: The disputed property was directly connected to the subject matter of the tripartite agreements, further strengthening the applicability of the arbitration clause.
• Appellants' Arguments Rejected: The Court rejected all arguments raised by the appellants against arbitration. These arguments included:
• The dispute concerned the cancellation of a conveyance deed, which they claimed was an action in rem (affecting property rights) and not subject to arbitration. The Court disagreed, classifying it as an action in personam (relating to rights between parties).
• The alleged fraud lacked specifics and wasn't considered serious enough to oust the arbitrator's jurisdiction.
• The absence of an arbitration clause in the conveyance deed itself was irrelevant since the broader clause in the tripartite agreements governed.