We previously discussed how the delayed hearing of arbitration clause is impacting hundreds of consumer cases in NCDRC. We also mentioned in our 2 months old post that judgment is expected in July. Much to the relief of consumers, the judgment was pronounced by the larger bench of NCDRC in favor of consumer. The point of conflict was an amendment made to section 8 of Arbitration and Conciliation Act in year 2015 that states that “for matter which is the subject of an arbitration agreement, the parties shall be referred to arbitration unless it finds that prima facie no valid arbitration agreement exists”. Builders had diverted attention of consumer court to this clause and hundreds of consumer cases including around 30 fought by consumer associations were left in lurch since October last year. However, NCDRC finally pronounced a much appreciated judgment on arbitration clause.
NCDRC concluded its judgment stating: “We unhesitatingly reject the arguments on behalf of the Builder and hold that an Arbitration Clause in the afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the jurisdiction of a Consumer Fora, notwithstanding the amendments made to Section 8 of the Arbitration Act.”.
The complete judgment of larger bench of NCDRC is attached here for reference.