While Disputes U/S 31 Of Specific Relief Act Are Arbitrable, Arbitral Awards Are Not Binding On Third Parties: Calcutta HC

The Calcutta High Court has clarified that while disputes falling under Section 31 of the Specific Relief Act (related to declaratory decrees) are arbitrable, arbitral awards issued in such disputes are not binding on third parties. The court reasoned that declaratory decrees often affect the rights and interests of parties beyond those involved in the arbitration agreement. Since arbitration is a consensual process binding only on the signatories, an arbitral award in a declaratory matter cannot automatically bind non-parties. This ruling distinguishes between the arbitrability of the subject matter and the enforceability of the resulting award against those who were not part of the arbitration.