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The decade-old uncertainty on the issue of arbitrability of
tenancy disputes stands settled with the pronouncement of the
judgment by the Hon ble Supreme Court in,
Vidya
Drolia and Others v. Durga Trading Corporation
1
(
Himangni Enterprises v. Kamaljeet Singh
Ahluwalia
2 (
Himangni
Enterprises ), provides much-needed
clarity on the nature of tenancy disputes that can be referred to
arbitration. The Dovetail Test laid down by the Court can be relied
upon in determining the non-arbitrability of disputes in general.
The Judgment also attempts to clear the conundrum surrounding the
Vidya Drolia v. Durga Trading
CA No. 2402 of 2019
Background facts
A Tenancy Agreement was entered into between the landlord s
predecessor-in-title (Shree Bajrang Land & Trading Company) and
the tenant (
Appellants) on February 02, 2006 in
respect of certain go- down and other structures.
The subsequent landlord, after the expiry of the tenancy
agreement, sent a notice asking the tenant to vacate the premises
and the tenant refused to vacate the premises, the
Respondent-Landlord filed an Application before the Calcutta High
Court (
HC) for appointment of an Arbitrator, as
per the Tenancy Agreement.
HC ruled in favor of the Respondent and appointed an Arbitrator
(
Booz Allen ), wherein it was
held that in eviction or tenancy matters which are governed by
special statues and where tenant enjoys statutory protection as a class is a matter of public interest and only the
specified court has been conferred exclusive jurisdiction to
adjudicate the same.
Later, in 2017, the issue regarding arbitrability of lease
dispute was once again re-visited by the Supreme Court in the case
of
Himangi Enterprises and after relying on the said
ratios of
Booze Allen and
Natraj Studios the
court rejected the application filed by the tenant (defendant)
under section 8 of the Arbitration and Conciliation Act, 1996
Supreme Court Of India Clarifies What Is Arbitrable Under Indian Law And Provides Guidance To Forums In Addressing The Question livelaw.in - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from livelaw.in Daily Mail and Mail on Sunday newspapers.
1
(“
Vidya Drolia”) has made an attempt
to clear the decade-old uncertainty on this issue and has proposed
a four-fold test to determine the question of arbitrability in
India along with an interpretative guide for forums adjudicating
this issue.
This article briefly discusses the position of law prior to the
judgment in
Vidya Drolia and then goes on to discuss the
key findings of the Supreme Court in
Vidya Drolia and the
application of the test and guidance to forums.
Arbitrability under Indian Law: The Pre-Vidya Drolia Era
The Supreme Court s 2011 judgment in
Booz Allen and
Hamilton Inc v.
SBI Home Finance Ltd. &