What types of disputes can be decided by Arbitration

What types of disputes go to arbitration?

Practically all types of Disputes of Civil Nature except Probate, Child Custody, Family Court Disputes and Tax and Revenue matters can be decided by way of Arbitration.

In a way most of disputes pertaining to Rights in Personam are Arbitrable, while Dispute pertaining to Right in Rem are beyond relam of Arbitration.

Disputes involving joint ventures, construction projects, partnership differences, intellectual property rights, personal injury, product liabilities, professional liability, real estate securities, contract interpretation and performance, insurance claim and Banking & non-Banking transaction disputes fall within the jurisdiction of Arbitration.

What types of disputes can’t be decided by Arbitration

The Supreme Court of India has listed certain disputes non-arbitrable namely:

• Disputes relating to rights and liabilities which arise out of or give rise to criminal offences.
• Matters of guardianship.
• Matrimonial disputes such as divorce, judicial separation, restitution of conjugal rights and child custody.
• Winding up and insolvency.
• Matters of testamentary like grant of probate, letters of administration and succession of certificates.
• Disputes regarding trust deeds involving trust, trustees and beneficiaries. 
• Matters of tenancy and eviction which are dealt with within the special provisions of a particular statute and have exclusive jurisdiction.

Arbitration and criminal offences are two parallel lines that can never intersect at a point.

What cases are eligible for arbitration?

In the case of Bharat Heavy Electricals Pvt. Ltd. v. Assam State Electricity, (1990) 2 Gau LR 130  the High Court has given the following guidelines in respect of tortious arbitrable claims:

1. Claims which are dependable on scope and subject related to the arbitration clause.
2. A claim, which lies in tort, shall be arbitrable if it arises out of, or is related to, the contract or is consequential upon any breach thereof.
3. If within a contract the claims are connected.
4. The nature of claims depends on the arbitrability of claims.
5. Claims arising out of the contract are still subject to an arbitration agreement if there is a close connection between claim and transaction. 
6. The language of the arbitration clause is interpreted in every case to determine whether the claims are direct and interactable.

Even in case of civil rights following matter cannot be referred to arbitration:

(a) Matrimonial matters and matters connected with conjugal rights.

(b) Industrial Disputes and Revenue matters (Income Tax & other Tax matters).

(c) Testamentary matters under Succ3ession act.

(d) Motor Vehicle Accident conversation.

(e) Matters under Indian Trust Act, Trusteeship of Charitable Institutions, Public charity matters failing within the purview of Monopolies and Restrictive Trade Practices Act.

(f) Determination guardianship or wards.

(g) As per Section 24 of Indian Contract Act matters relating to unlawful consideration are void hence these matters can not be referred for arbitration