Delhi High Court in a recent judgment held that arbitration could not be invoked against a party that is not part of the arbitration agreement. The court observed that because members of a registered society are parties to an arbitration agreement, it does not automatically make the society amenable under section 8 of the Arbitration and Conciliation Act, 1996, as it is a separate legal entity.
In the Uniworld Garden Apartment Owners Association v Unitech Realty case, Uniworld filed a suit against Unitech in Delhi High Court, seeking a recovery of ₹177 million (US$2.7 million) plus interest. The apartment owners association filed the case on the basis of Unitech’s written admissions about its liability to hand over the interest bearing maintenance security. Unitech had collected the amount from individual apartment owners, but was to return it to Uniworld when it took over the maintenance of the apartment complex.
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The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
