Quick Summary: Luxempire Realty Pvt Ltd filed a legal complaint against Eminence Landmarks LLP and others, arguing against being part of an arbitration process they never agreed to. The Bombay High Court sided with Luxempire, stressing that you need agreement from all parties to be involved in arbitration.
Luxempire Realty Pvt Ltd, a company in the real estate business, found itself caught up in an arbitration process started by Eminence Landmarks LLP. The main issue was a financial deal between Eminence and another company, M/s Gagan Platinum Spaces LLP. Eminence claimed that Luxempire, by buying a property from Gagan I-Land Township Pvt Ltd (another involved party), had indirectly agreed to the arbitration.
The problem started when Eminence Landmarks LLP made a deal with M/s Gagan in 2017, lending ₹25 crores for a real estate project. When the project didn't make enough money, Eminence wanted arbitration to get their money back.
Luxempire argued that they were a genuine buyer of the property, with no connection to the original deal between Eminence and M/s Gagan. They claimed they never agreed to any arbitration and were wrongly pulled into the conflict.
"Agreement is key in arbitration. Someone who didn't sign the agreement cannot be forced to be part of an arbitration." - Bombay High Court
Agreement in Arbitration: The court stressed that arbitration needs everyone's agreement. Luxempire, not having signed the original deal, couldn't be forced into arbitration without their clear agreement.
'Claiming Through or Under' Principle: Eminence's argument that Luxempire was involved because they were connected to the original parties was rejected. The court said this principle couldn't apply as Luxempire had no direct link to the original contract.
Role of the Arbitrator: The court criticized the arbitrator's choice to involve Luxempire, saying it was beyond what they were allowed to do.
The High Court decided in favor of Luxempire, canceling the arbitrator's order to include them in the arbitration process. This decision highlights that arbitration needs clear agreement from everyone involved and cannot include those who haven't agreed to it.
