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Validity of Arbitration Clause

Dear Sir,

I have entered an agreement for sale of an apartment with a builder and the agreement contains an arbitration clause also. Now the Builder delayed the construction of the project and I desire to cancel the agreement. But the Builder is demanding 20 % of the contract amount as his incidental expense for termination.

My question is whether the arbitration clause is banned me from seeking solution from consumer court or civil court.

Kindly advice




 9 Replies

Vishwa Bhushan Arya (Service)     27 July 2009

You may file your claim before the consumer forum. The existence of Arbitration Clause bars a civil suit but not the complaint before the consumer forum. Vishwa Bhushan Arya

R.Ranganathan (Director)     08 June 2010

In your case there is delay by the builder which amounts to negligence and hardship. This type of matters can be referred to consumer courts even if an arbitration clause is there in the agreement. The arbitration clause is for other disputes and not for negligence etc.,

Vishwa Bhushan Arya (Service)     08 June 2010

Dear Gentleman:

Negligience is a cause of action covered within the dispute even where there is arbitration clause unless the clause specifically excludes the same.


R.Ranganathan (Director)     09 June 2010

Mr. Vishwa Bhushan Arya, I feel that Negligence is not covered within a dispute. Dispute is something different from negligence. Due to Negligence, delay and other disputes arise. There will not be any clause in any agreement excluding the negligence clause.

Further What I meant is that the delay caused by the builder will give rise to a cause of action in the consumer court wherein one can claim damages for negligence and other matters. Instead of going for cancelling the agreement a case can be filed in the consumer court for the delay.


Basavaraj (Asst, Manager-Legal)     06 July 2010

Please approch the CONSUMER COURT.

ranjukumari (ser)     06 July 2010

I empresed to read your article.


Manisha Chaturvedi (,LL.B(H))     24 June 2011

Can anyone of you elaborate the contention of referring the dispute to consumer court by siting legal provisions including the relevant sections. Under which act and section, can a person proceed to consumer courts in conditions where arbitration clause already exist.

AKASH GOYAL (self employed)     22 February 2014


S K KARNjhc (Legal Adviser)     22 February 2014

Mr Govind you should approach Consumer court

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