Bombay high court says parties to dispute cannot be forced to arbitrate
Parties to a dispute cannot be forced to arbitrate by issuing a writ, the Bombay high court has said while dismissing separate petitions seeking a direction to the Maharashtra State Road Development Corporation (MSRDC) to refer to arbitration its demand for Rs 107.84 crore as its additional revenue share.
The bench of chief justice Dipankar Datta and justice Girish Kulkarni said forcing parties to arbitration would be contrary to the concept defined under the Arbitration and Conciliation Act. It added it will also be contrary to the Indian Contract Act, under which free consent of the parties is a must for a valid contract.
“It cannot be overlooked that lack of valid arbitration agreement is one of the basic grounds for setting aside an arbitral award,” said the bench. “Thus, to foist an arbitration agreement on a party is nothing short of imposing an illegality.”
MEP RGSL Toll Bridge Private Limited and Raima Toll and Infrastructure Private Limited had moved the court after MSRDC rejected their proposal for referring to arbitration the latter’s demand for additional revenue from the toll collected.
Senior advocate Abhishek Manu Singhvi, who represented the petitioners, cited a clause in their toll collection contracts with MSRDC and said it is akin to an “arbitration clause”. He added it was required to be read as a clause providing for arbitration in case of a dispute.