13 June 2024 Contract Enforcement >> Business & Commercial Law   |   Arbitration >> Corporate Law   |   Sale Deed >> Personal Law  

A recent court order compels arbitration in a disagreement between a builder and a landowner. The dispute stems from a contract (Annexure-I) for the construction of a building on the landowner's property.

Facts:

The contract included an arbitration clause (Clause 19) specifying that disagreements regarding interpretation or fulfillment of the agreement would be settled through arbitration. However, the current dispute involves the landowner's refusal to execute a sale deed for a specific portion of the completed building, as requested by the builder. The landowner argued that the contract also contained a clause (Clause 22) allowing the builder to file a lawsuit for specific performance. Based on this, they contended that the dispute wasn't subject to arbitration.

Conclusion:

The court disagreed with the landowner's argument. It determined that Clause 22 offered the builder an alternative course of action, not a reason to exclude arbitration. The court bolstered its decision by citing past Supreme Court rulings that supported the arbitrability of disputes concerning specific performance of contracts. The court's order upholds the arbitration request and appoints a sole arbitrator to handle the case. The arbitrator holds the authority to rule on their own jurisdiction if challenged by either party. The next steps involve sending the court order to the arbitrator and both parties presenting their arguments before the appointed individual on a designated date.

  Arbitration and Conciliation Act, 1996