Writ jurisdiction and arbitration clause: commercial disputes should ordinarily be referred to the agreed arbitral remedy

A writ petition challenging a commercial dealership dispute was held not maintainable where the contract contained an arbitration clause. The court restated that alternative remedy is a rule of discretion, not compulsion, but writ jurisdiction is reserved for recognised exceptions such as enforcement of fundamental rights, breach of natural justice, or complete lack of jurisdiction. As no exceptional circumstance was shown, the agreed arbitral remedy could not be bypassed, and the parties were directed to arbitration.

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Issues: Whether the writ petition was maintainable despite the arbitration clause in the dealership agreement, or whether the parties were required to be relegated to arbitration.

Analysis: The availability of an alternative remedy is a rule of discretion and not of compulsion, but writ jurisdiction may be exercised only in recognised exceptional situations such as enforcement of fundamental rights, breach of natural justice, or complete lack of jurisdiction. The dispute arose out of a commercial contract governed by an arbitration clause, and no such exceptional circumstance was shown. In these circumstances, the agreed arbitral remedy could not be bypassed for invoking writ jurisdiction.

Conclusion: The writ petition was not maintainable and the parties were to be referred to arbitration.

Ratio Decidendi: Where a commercial dispute is covered by an arbitration clause, writ jurisdiction will not ordinarily be exercised unless a recognised exception justifies departure from the alternative remedy rule.

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