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X, under an agreement with Y, was to construct a residential complex within a set time. Some flats were sold during construction. A High Court status quo order halted construction, and Y later terminated the contract. Y has now invoked arbitration and seeks a declaration from the Arbitral Tribunal regarding X’s liability towards the homebuyers (who are not parties to the agreement). Can Y legally seek such a declaration?
No, the Arbitral Tribunal can decide only between parties to the agreement, not third parties like homebuyers. Homebuyers must file separately in RERA or civil court. Y cannot legally ask the Tribunal to fix X’s liability to those not part of the contract. For further legal assistance contact us on our helpline number.