ADRNon arbitrabilitySupreme Court of India

Booz Allen and Hamilton Inc. v SBI Home Finance Ltd.

(2011) 5 Supreme Court Cases 53220111 min read
The case in brief30-second read
Facts
Booz Allen (US company) entered into a joint venture agreement with SBI Home Finance. The agreement contained an arbitration clause. Disputes arose regarding the management and control of the joint venture.
Issue
Which categories of disputes are non-arbitrable (not capable of resolution through arbitration) under Indian law?
Held
Non-arbitrable categories (illustrative, not exhaustive):.
Principle
Laid down categories of non-arbitrable disputes in India: rights in rem, criminal offences, matrimonial status, insolvency, testamentary matters, patent validity
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Facts

  • Booz Allen (US company) entered into a joint venture agreement with SBI Home Finance
  • The agreement contained an arbitration clause
  • Disputes arose regarding the management and control of the joint venture
  • The matter involved questions of company law (oppression and mismanagement) within the exclusive jurisdiction of the Company Law Board (now NCLT)
  • The question was whether such disputes could be referred to arbitration

Issue

  1. Which categories of disputes are non-arbitrable (not capable of resolution through arbitration) under Indian law?

Held

  • Non-arbitrable categories (illustrative, not exhaustive):
  • Disputes relating to rights and liabilities giving rise to or arising out of criminal offences
  • Matrimonial disputes relating to status (divorce, nullity)
  • Matters of guardianship and custody
  • Insolvency and winding-up matters

Ratio decidendi

Certain disputes are reserved for public fora because they involve rights in rem (enforceable against the world), affect third parties, require sovereign/State functions, or fall within exclusive statutory tribunal jurisdiction. Such disputes cannot be submitted to private arbitration.

Exam use

How to use it in an answer

  • Part A: List the 6-7 categories of non-arbitrable disputes per Booz Allen. State the principle: rights in rem = non-arbitrable; subordinate rights in personam = may be arbitrable.
  • Part B: Use for questions on scope and limits of arbitration. Distinguish arbitrable from non-arbitrable. Connect to Vidya Drolia v Durga Trading (2021) which refined the test with a four-fold formula.
  • Key line: "All disputes relating to rights in personam are considered to be amenable to arbitration; disputes relating to rights in rem are required to be adjudicated by courts."

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Citation

Booz Allen and Hamilton Inc. v SBI Home Finance Ltd. (2011) 5 Supreme Court Cases 532

Reported: Supreme Court judgment. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.