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        2023 (10) TMI 1510 - SC - Indian Laws

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        Consumer disputes remain non-arbitrable despite an arbitration clause where special statutory consumer remedies are invoked. An arbitration clause does not, by itself, oust consumer forum jurisdiction where a homebuyer's claim falls under consumer protection law, because that ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Consumer disputes remain non-arbitrable despite an arbitration clause where special statutory consumer remedies are invoked.

                          An arbitration clause does not, by itself, oust consumer forum jurisdiction where a homebuyer's claim falls under consumer protection law, because that statute supplies a special beneficial remedy and consumer disputes are treated as excluded from private adjudication by necessary implication. The 2015 amendments to the Arbitration and Conciliation Act narrow judicial scrutiny under Sections 8 and 11 to the existence of an arbitration agreement, but they do not override settled non-arbitrability principles or compel reference of a dispute governed by a special statutory forum chosen by the consumer. The same reasoning applies to a request for appointment of an arbitrator under Section 11.




                          Issues: Whether a consumer dispute covered by the Consumer Protection Act is rendered arbitrable by the presence of an arbitration clause and the 2015 amendment to the Arbitration and Conciliation Act, 1996, and whether the High Court could be compelled to appoint an arbitrator under Section 11.

                          Analysis: The dispute arose from a homebuyer-consumer complaint before the consumer forum, which is a special public remedy under consumer legislation. The existence of an arbitration clause does not, by itself, extinguish the jurisdiction of consumer fora, because consumer protection law provides an additional and special remedy and consumer disputes are treated as falling within the class of disputes excluded from private adjudication by necessary implication. The amendment to Section 8 and Section 11 of the Arbitration and Conciliation Act, 1996 narrows judicial scrutiny to the existence of an arbitration agreement, but it does not override settled principles of non-arbitrability or compel reference where the subject matter is governed by a special beneficial statute and the consumer has chosen that statutory forum. The earlier consumer-law precedents and the later reaffirmation of those principles were held to apply equally to the Section 11 request for appointment of an arbitrator.

                          Conclusion: The consumer dispute was held to be non-arbitrable on the facts, and the High Court was in refusing to appoint an arbitrator under Section 11.


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