Here's an interesting legal battle over a development agreement that ended up in the Bombay High Court. Let's break down what happened.
Om Swayambhu Siddhivinayak, a developer, and Harischandra Dinkar Gaikwad, along with others who own the land, had a deal. The developer was supposed to provide developed property to the landowners. But things went wrong, leading to a court case asking for the agreement to be carried out or canceled.
Two agreements are at the center of this issue: the Development Agreement from 2011 and a Supplemental Agreement from 2021. The landowners wanted a specific area delivered, but the developer had different plans.
Om Swayambhu Siddhivinayak argued that the Development Agreement had a rule saying disputes should be settled outside of court, through arbitration. However, the Supplemental Agreement didn’t have this rule, causing confusion. The court initially decided not to send the case to arbitration.
"The arbitrator is not qualified to decide the disputes between the parties."
Dr. Uday Warunjikar, representing Harischandra Dinkar Gaikwad and the other landowners, claimed that the agreements had different ways to solve disputes. He argued that serious fraud claims couldn’t be handled by an arbitrator.
On the other hand, Mr. Dinesh Tiwari, representing Om Swayambhu Siddhivinayak, insisted that the dispute was about the Development Agreement, which should be resolved through arbitration.
The judge, Somasekhar Sundaresan, reviewed everything and found that the initial court order was not reasonable. The law generally prefers arbitration if there's an agreement for it, unless there's a clear reason not to.
Claims of fraud were also part of the problem. The court noted that unless fraud affects the entire contract, arbitration can still be a valid option. The judge emphasized that the fraud claims here were not enough to avoid arbitration.
The court canceled the previous order and directed the parties to go to arbitration. Harischandra Dinkar Gaikwad and the other landowners have four weeks to agree on an arbitrator.
"Since the subject matter of the Suit would need to be referred to arbitration, it is made clear that the Learned District Court ought not to pronounce its judgement."
In summary, the court decided that the case should be settled through arbitration, not in court. This case shows how important it is to have clear rules for solving disputes in legal agreements.
