Lawstreet Journal

'Arbitrators like Courts, are legally bound to resolve disputes in accordance with law': Bombay High Court [READ JUDGMENT]

Lawstreet Journal 26 Jun 2021 8:54pm

Image courtesy: Lawstreet Journal Judiciary 'Arbitrators like Courts, are legally bound to resolve disputes in accordance with law': Bombay High Court [READ JUDGMENT]

In a remarkable judgment, the Bombay High Court has held that Arbitral Tribunals like Courts are legally bound to resolve disputes in accordance with the public policy of the law. 

The Court observed that Arbitral Tribunals do not lack the inherent jurisdiction in considering a claim for specific performance of the MOUs. They have the jurisdiction to entertain, try, and adjudicate upon such claims arising out of not in action in rem. 

A Division Bench of Justice R.D Dhanuka and Justice V.G Bisht was hearing a writ petition challenging the order passed by an Arbitrator wherein the Application filed by the petitioner under Section 16 of Arbitration and Conciliation Act, 1996 was dismissed. [Tirupati Shopping Centre Premises Co-Op. Society Limited v. Shabayesha Construction Company Private Limited].

The respondent, a construction company, had entered into sale agreements to form a society within the timeline as prescribed in the Maharashtra Ownership Flats (Regulations of the Promotion of Construction, Sale Management, and Transfer) Rules, 1964 [MOFA Rules]. The respondent also covenanted that they would execute a conveyance deed within four months of registration of the society.

When the respondent failed to execute a Deed of Conveyance even after 8 years despite taking full consideration from the flat purchasers, the petitioner filed an application before the Competent Authority under Section 11 of the Maharashtra Ownership Flats Act, 1963 for a unilateral Deemed Conveyance. The dispute was then referred to Arbitration under the Arbitration clause forming part of the Agreement entered between the parties.

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Tagged: Bombay High Court   Law of Arbitration  
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