In Civil Courts We ‘Trust': Trust Disputes Inarbitrable In India

• Disputes arising out of Trust Deeds and the Indian Trusts Act, 1882 cannot be referred to arbitration.
• Clauses providing for arbitration in a Trust Deed do not constitute an "arbitration agreement".
• Provisions governing dispute resolution and legal remedies in the Trusts Act act as an implied bar to arbitration of trust related disputes.

INTRODUCTION

The Supreme Court of India ("SC"), in Vimal Shah & Ors. vs Jayesh Shah & Ors.¹, recently held that disputes arising between beneficiaries or trustees of a Trust cannot be referred to arbitration as an arbitration clause contained in a Trust Deed is not an "arbitration agreement" between the trustees inter se, between the beneficiaries inter se or between the trustees and the beneficiaries for the purposes of the Arbitration & Conciliation Act, 1996 ("Arbitration Act") unless the respective parties specifically agree to the same.