Case Note & Summary
The judgment concerns two related matters: a Notice of Motion (No. 540 of 2013) in Suit No. 62 of 2013 and an Arbitration Application (No. 86 of 2013). The Notice of Motion was filed by Samir N. Bhojwani (original Defendant No.2) seeking to refer the suit to arbitration under Section 8(1) of the Arbitration and Conciliation Act, 1996. The Arbitration Application was filed by Samir under Section 11 of the same Act seeking appointment of an arbitrator. The dispute arose out of development agreements concerning a slum redevelopment project. The plaintiff, M/s. Aurora Properties and Investments (Aurora), filed the suit against Bombay Slum Redevelopment Corporation Ltd. (BSRCL) and Samir. Aurora claimed to be the successor-in-interest of the original developer under an Agreement for Sub-Development dated 22nd September 1999 and an Agreement for Development dated 10th March 2003, both containing arbitration clauses. Samir, who was not a signatory to these agreements, sought to enforce the arbitration clause against Aurora. The court examined whether a non-signatory could invoke arbitration. It held that Aurora, having stepped into the shoes of the original developer, was bound by the arbitration agreement. The court allowed the Notice of Motion, referring the suit to arbitration, and allowed the Arbitration Application, appointing Hon'ble Mr. Justice F.I. Rebello (Retd.) as the sole arbitrator to adjudicate the disputes between the parties.
Headnote
A) Arbitration Law - Section 8 Application - Non-Signatory - Arbitration and Conciliation Act, 1996, Section 8 - The court considered whether a suit filed by a non-signatory to an arbitration agreement can be referred to arbitration under Section 8 of the Act. The court held that a non-signatory who claims through or under a signatory to the arbitration agreement is bound by the arbitration clause. The plaintiff, Aurora, being a successor-in-interest of the original developer, was bound by the arbitration agreement contained in the development agreements. (Paras 1-23) B) Arbitration Law - Appointment of Arbitrator - Section 11 Application - Arbitration and Conciliation Act, 1996, Section 11 - The court considered an application under Section 11 for appointment of an arbitrator. The court held that since the arbitration clause existed and disputes had arisen, the court could appoint an arbitrator. The court appointed Hon'ble Mr. Justice F.I. Rebello (Retd.) as the sole arbitrator. (Paras 2-23)
Issue of Consideration
Whether a non-signatory to an arbitration agreement can be referred to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, and whether an arbitrator should be appointed under Section 11 of the Act.
Final Decision
The Notice of Motion is allowed, and Suit No. 62 of 2013 is referred to arbitration. The Arbitration Application is allowed, and Hon'ble Mr. Justice F.I. Rebello (Retd.) is appointed as the sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Arbitration agreement binding on non-signatory transferee
- Section 8 of Arbitration and Conciliation Act
- 1996
- Section 11 of Arbitration and Conciliation Act
- Doctrine of arbitration agreement binding on successors and assigns
