GUJARAT COMPOSITE LIMITED versus A INFRASTRUCTURE LIMITED & ORS.

GUJARAT COMPOSITE LIMITED versus A INFRASTRUCTURE LIMITED & ORS.

Because only the original licence agreement contained an arbitration clause and the tripartite agreement and subsequent conveyances (involving the bank and other purchasers) did not, and the substantive reliefs in the suit related to the tripartite agreement, mortgage and non-parties (including allegations of fraud), there was no prima facie valid arbitration agreement covering the entire subject-matter; therefore the courts below rightly declined to refer the dispute to arbitration under Section 8 and the appeals were dismissed.

Parties
Appellant: Gujarat Composite Limited; Respondent No.1: A Infrastructure Limited; Respondent No.2: Bank of Baroda; Respondent No.3: Real Home Corporation; Respondent No.4: M/s. Raj Corporation; Respondent No.5: RJD Buildcon Ltd.
Jurisdiction
India
Judgment Date
01 May 2023
Procedural Posture
Civil Appeal / Appeal to Supreme Court Against High Court Judgment Dismissing Appeals From Commercial Court Order Under Section 8
Outcome
Appeals dismissed
Legal Topics
Arbitrability, Section 8 Arbitration and Conciliation Act, 1996 (as Amended), Tripartite Agreement, Non Parties to Arbitration Agreement, Fraud Allegations
Arbitration Contract Property Banking Arbitrability Section 8 Arbitration and Conciliation Act, 1996 (as Amended) Tripartite Agreement Non Parties to Arbitration Agreement +1 more

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Parties

Gujarat Composite Limited

Appellant

A Infrastructure Limited

Respondent No.1

Bank of Baroda

Respondent No.2

Real Home Corporation

Respondent No.3

M/s. Raj Corporation

Respondent No.4

RJD Buildcon Ltd.

Respondent No.5

Procedural Posture

Civil Appeal / Appeal to Supreme Court Against High Court Judgment Dismissing Appeals From Commercial Court Order Under Section 8

Legal Issues

  1. 1 Whether the disputes in the suits are referable to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996
  2. 2 Whether the arbitration clause in the original licence agreement (07.04.2005) extends to the tripartite agreement and subsequent conveyance transactions involving non-parties (bank and purchasers)
  3. 3 Whether the subject-matter of the suit can be bifurcated for partial reference to arbitration

Ratio Decidendi

Because only the original licence agreement contained an arbitration clause and the tripartite agreement and subsequent conveyances (involving the bank and other purchasers) did not, and the substantive reliefs in the suit related to the tripartite agreement, mortgage and non-parties (including allegations of fraud), there was no prima facie valid arbitration agreement covering the entire subject-matter; therefore the courts below rightly declined to refer the dispute to arbitration under Section 8 and the appeals were dismissed.

Court Disposition

Appeals dismissed

Orders

  • Appeals dismissed
  • High Court judgment and order dated 23.04.2018 affirmed