Suits for declaration of nullity of arbitration clauses not maintainable, Delhi High Court

Today, the Delhi High Court held in Dr. Devinder Kumar Gupta vs Realogy Corporation & Anr. that no civil suit seeking a declaration that an arbitration clause is void is maintainable.

It was argued before the Court that it was well settled that civil courts could go into questions of existence and validity of arbitration clauses. However, the Court rightly pointed out that this position would hold true only while disposing off an application under Section 8 or Section 45 of the Arbitration & Conciliation Act whereby a party to an already instituted suit requests reference to arbitration contending that an arbitration clause between the parties to the suit covers the subject matter of the dispute. The Court held that precedents that clarify the scope of examination under Section 8 and Section 45 cannot be extended to allow suits seeking declaration of nullity of an arbitration clause.

The relies on the decision of the Supreme Court in Kvaerner Cementation India Ltd. v Bajranglal Agarwal, 2001(6) SCC 265 while arriving its conclusion.