A Valid Arbitration Clause Cannot Oust Jurisdiction Of The Consumer Forums In A Builder's Agreement

In order to protect the customers from the situation arising out of unequal bargaining power, the Legislature has tried to provide an additional remedy under Section 3 of the Consumer Protection Act, which states that the provisions of the Act are in addition to and not in derogation of the provisions of any other law prevailing for the time being.³⁰

Section 3 of the Consumer's Protection Act (hereinafter referred to as "CP Act") prima facie appears to be in direct conflict with the amended Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Arbitration Act") which states that in the situations of dispute matters which are arbitrable and the presence of a valid arbitration agreement, the reference to an arbitration is must once invoked by a party. There are many case laws on the issue and the law is well settled that notwithstanding the provisions under Section 8 of the amended Arbitration Act, the arbitration agreements do not bar