Bombay high court says parties to dispute cannot be forced to arbitrate

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.

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 ₹107.84 crore as its additional revenue share.

The court also pointed out that under the Indian Contract Act, free consent of the parties is a must for a valid contract. (Getty Images/iStockphoto)

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.