Consumer Forums Needn’t Refer Parties To Arbitration In Terms Of Valid Arbitration Agreement: SC Upholds NCDRC Order [Read Order]

Dismissing the appeals filed by builders, the Supreme Court has upheld the National Consumer Dispute Redressal Commission order that held that arbitration clause in the agreements cannot circumscribe the jurisdiction of a consumer fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.The bench of Justice AK Goel and Justice UU Lalit had earlier issued notice on. Dismissing the appeals filed by builders, the Supreme Court has upheld the National Consumer Dispute Redressal Commission order that held that arbitration clause in the agreements cannot circumscribe the jurisdiction of a consumer fora, notwithstanding the amendments made to Section 8 of the Arbitration Act. The bench of Justice AK Goel and Justice UU Lalit had earlier issued notice on a Special Leave Petition against the order of National Consumer Dispute Redressal Commission in Aftab Singh vs. M/S EMAAR MGF Land Ltd. Consumer Forum need not refer parties to arbitration, even if valid Arbitration clause exist A single-member bench of the NCDRC had referred the following question to full bench: “Whether the newly inserted Sub-Section of Section 8 of the Arbitration Act mandates Consumer Forums, constituted under the Consumer Act, to refer parties to Arbitration in terms of valid Arbitration Agreement, notwithstanding other provisions of the Arbitration Act and the provisions of the Consumer Act?” The single bench had also observed that the arbitration clauses are generally contained in the buyers’ agreement between the builders and the purchasers of the plot and flats, and also in incorporation in the insurance policies and several other agreements which later on become the subject matter of the consumer disputes.