Agreement restricting Legal rights

Ritu Mehrotra (Querist) 12 June 2009 This query is : Resolved
As per section 28 of the Contract Act, any contract abosolutely restricting the legal rights are void to the extent of that restriction.

However, if both parties to the contract, agreed to resolve the proceedings through Arbitration, can any party go beyond that and may file a legal case on any disputed matter to the Court / High Court.

Further my second question is that,

4-5 companies have executed contracts seperately with GOI. They have also formed an association for their benefit of them and to protect their interest against any deteriment. that association is not the party to the contract.

Can that association file a case against GOI against any dispute if arises i.e. can that association being association of all 4-5 companies be a party to the contract.

If yes, can it file a case in the High Court when the parties agree to resolve the matter through arbitration only.

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Manish Singh (Expert) 12 June 2009
Section 28 of the Contract Act had nothing to with the Arbitration Clause in the present matter. the Aribtration Act is a complete code itself which restrict the party to move courts when they agree for arbitration to resolve their dispute. if the matter in your case is a dispute and covered by the Arbitration act, both the parties are barred from moving the court without going for arbitration first.

pertaining to the second question, since the third pary is a benefeciary under the contract they can claim their benefits against the defaulting party by filing suits. But for settlement of dispute arising out of contract, in my view, they cant take any action. i will try to find out a case law on the above.

but again you cant move the HC without going for arbitration first. but keep in mind that your restricted to move a court only when the matter could be termed as dispute and not otherwise.