Parties: M/S EMINENT COLONIZERS PRIVATE LIMITED VS RAJASTHAN HOUSING BOARD
Lawyers: YOOTHICA PALLAVI
Judges: JUSTICE J.B. PARDIWALA, JUSTICE K.V. VISWANATHAN
Judgment By: JUSTICE K.V. VISWANATHAN
Case Number: 14254/2021
Recently, the Supreme Court of India changed a decision made by the Rajasthan High Court, confirming that Clause 23 of a contract between M/S Eminent Colonizers Private Limited and the Rajasthan Housing Board is indeed a clause for arbitration, which is a way to settle disputes without going to full court. This decision affects two civil appeals and could influence similar future cases.
In 2009, M/S Eminent Colonizers Private Limited was hired by the Rajasthan Housing Board to build housing in Jaipur. Problems started when the company said they weren't paid extra costs and that the committee set up to solve disputes under Clause 23 wasn't formed properly.
In 2014, a judge appointed Justice J.R. Goyal to be the arbitrator, which the Rajasthan Housing Board agreed to. The arbitrator decided in favor of M/S Eminent Colonizers Private Limited, awarding them Rs. 17,10,624.70 with interest. However, the Rajasthan High Court later said that Clause 23 was not for arbitration, leading to the current appeal.
The Supreme Court, led by Justice K.V. Viswanathan, decided that the High Court and Commercial Court misunderstood the situation. The Supreme Court stressed that the initial appointment of the arbitrator was final and could not be challenged because no one appealed it.
The court mentioned that if the 2015 changes to the Arbitration and Conciliation Act were relevant, the situation might be different. But since the appointment happened before these changes, the original decision remains.
The Supreme Court canceled the High Court's decision and sent the cases back to the Commercial Court in Jaipur to look at other issues. They asked for a quick resolution within three months because the case has been going on for a long time.
This judgment highlights how important arbitration clauses are and how initial judicial decisions are binding, setting a clear example for similar contract disputes.
