In a recent legal matter in the Supreme Court, the appellants, originally plaintiffs in a civil suit initiated in 2021, sought a declaration nullifying the Conveyance Deed of 17.12.2019 and valid termination of Development Agreements dated 17.09.2007, 20.11.2007, 30.11.2007, 03.12.2007, and 27.02.2008. The defendants invoked Section 8 of the Arbitration & Conciliation Act, 1996, asserting that the dispute should be arbitrated based on the clauses within agreements dated 31.03.2007 and 25.07.2008. The Trial Court and subsequently the Bombay High Court upheld the referral to arbitration, leading to the appellants challenging these decisions before the apex court.

The central issue examined by the court was whether the Trial Court and the High Court correctly referred the dispute to arbitration. The appellants contended that the absence of an arbitration clause in the Conveyance Deed invalidated the arbitration referral. However, the court ruled that the broad language of the arbitration clauses in the 2007 and 2008 Tripartite Agreements encompassed the dispute raised in the civil suit, justifying the arbitration reference.

The bench of Justices Sudhanshu Dhulia and Aniruddha Bose emphasized on the limited role of the judiciary in arbitration matters, citing amendments made in 2015 to Sections 8 and 11 of the Arbitration Act to reduce judicial interference. The amendments aimed to minimize court involvement unless there was prima facie evidence of the absence of a valid arbitration agreement.

Addressing the appellants' objections, the court clarified that the subject matter of the dispute fell within the ambit of the arbitration clauses in the 2007 and 2008 Tripartite Agreements. It rejected the argument of non-arbitrability, asserting that the Arbitral Tribunal possesses the authority to decide on its own jurisdiction, including the existence and validity of an arbitration clause.

The court also addressed objections related to the nature of the suit, categorically stating that a suit for cancellation of a document concerning immovable property is not inherently non-arbitrable. It referred to precedent, particularly the case of Deccan Paper Mills v. Regency Mahavir Properties, to support the position that such suits are actions in personam, not in rem.

Lastly, the court scrutinized the appellants' fraud claim, emphasizing the need for serious allegations that permeate the entire contract to oust the jurisdiction of an arbitrator. In the absence of substantiated fraud claims with implications in the public domain, the court upheld the arbitration referral.

In conclusion, the court dismissed the appeal, affirming the correctness of the Trial Court and High Court decisions to refer the dispute to arbitration. The judgment highlights the legislative intent to restrict judicial interference in arbitration matters and underscores the importance of upholding arbitration agreements in resolving complex property disputes.

Case: SUSHMA SHIVKUMAR DAGA & ANR.vs MADHURKUMAR RAMKRISHNAJI BAJAJ & ORS,

CIVIL APPEAL NO.1854 OF 2023.

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