2 weeks, 1 day ago

Whether Rights In Favor Of Third Party Are Created In Property Which Is Subject Matter Of Arbitration Cannot Be Decided Under Writ Jurisdiction: Karnataka HC

The Karnataka High Court bench of Mr Justice Krishna S Dixit and Mr Justice Ramachandra D. Huddar has held that whether rights in favor of a third party based on sale deeds have been created in the property, which is the subject matter of arbitration, cannot be decided by the court under writ jurisdiction. The order so passed by the Arbitrator has far reaching consequences for third party stakeholders, including the petitioner, who were neither informed nor given an opportunity to participate in the arbitration. Contentions: The Petitioner submitted that the arbitration, which was initially a dispute in pursuance between the respondents, has now acquired non arbitrability due to the creation of third party rights over the years. It was also argued that the interim order passed by the Arbitrator has created uncertainty regarding the validity of the sale deed in favour of third party, including that of the petitioner It was further argued that when disputes involve third party rights and non-arbitrable subjects, it must be adjudicated by Civil Court.

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