Ar­bi­tra­tion agree­ments can­not oust the ju­ris­dic­tion of con­sumer fo­rums

Consumer Voice - - In The News -

In a re­cent judge­ment, the Supreme Court af­firmed that ar­bi­tra­tion agree­ments can­not oust the ju­ris­dic­tion of con­sumer fo­rums. The or­der will ben­e­fit home­buy­ers who usu­ally have an ar­bi­tra­tion clause in their agree­ments with the real es­tate com­pa­nies. Such clauses lay down that in cases of dis­putes, ag­grieved con­sumers will have to re­sort to ar­bi­tra­tion be­fore mov­ing to civil courts.

Em­pha­sis­ing upon con­sumers’ rights, a bench of jus­tices Adarsh K Goel and Uday U Lalit has up­held the Na­tional Con­sumer Com­mis­sion’s judeg­ment that had main­tained that de­spite an ar­bi­tra­tion clause in the agree­ments, con­sumers could still knock on the doors of con­sumer fo­rums to seek quick re­dres­sal. The apex court passed this or­der while dis­miss­ing sev­eral ap­peals that were filed by Emaar MGF Land Ltd. “In terms of the signed or­der, the ap­peals are dis­missed. Pend­ing ap­pli­ca­tions, if any, shall also stand dis­posed of,” stated the or­der.

Emaar MGF had chal­lenged the Na­tional Com­mis­sion’s full-bench ver­dict of July 2017 wherein the apex con­sumer fo­rum ruled that au­thor­ity and ju­ris­dic­tion of con­sumer fo­rum could not be cir­cum­scribed by any ar­bi­tra­tion clause. Ac­cord­ing to the Com­mis­sion, con­sumer dis­putes are not ca­pa­ble of be­ing set­tled by ar­bi­tra­tion and that the ju­ris­dic­tion of the con­sumer fora to ad­ju­di­cate upon con­sumer dis­putes is not af­fected by Sec­tion 8 (as amended) of the Ar­bi­tra­tion and Con­cil­i­a­tion Act, 1996, that man­dates ref­er­ence to ar­bi­tra­tion.

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