A&C Act not inviolable Based on A Non-Binding Arbitration Agreement

Masters Management Consultants (India) Private Ltd Vs Nitesh Estates Limited (Karnataka High Court)

Held that as the agreement between the parties provided for a ‘non-binding’ arbitration, there was absolutely no intention of the parties to enter into an arbitration agreement and that the said agreement could not be termed as an arbitration agreement.

Facts-

The plaintiff claims that it has entered into a project management and construction management agreement with the respondent. The plaintiff has specifically pleaded that he has rendered service as enumerated under the agreement and accordingly invoices are raised. On these set of pleading, the suit for recovery is instituted by the plaintiff before the District Court, Bangalore seeking recovery of the amounts due to the petitioner under the agreement.

The respondent filed an application under Section 8 of the A& C Act and requested the District Court to refer the disputes between the parties to arbitration by invoking the arbitration clause provided in the agreement. The District Court allowed the application filed under Section 8 of the A& C Act and returned the plaint filed by the petitioner. Against this, the petitioner filed the present writ petition.

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