Karnataka High Court Rules on Arbitration Agreements

The Karnataka High Court has ruled that individuals purchasing property from vendors bound by an arbitration agreement are also subject to its arbitration clause, affirming the broader scope of parties defined under the Arbitration Act. The court referenced the Supreme Court's decision in Cox and Kings, which clarified that non-signatories can be bound by arbitration agreements if their conduct indicates consent. Additionally, the court upheld the principle of lis pendens, stating that property transactions cannot undermine ongoing arbitration proceedings, ensuring that rights in litigation remain protected. Meanwhile, the Bombay High Court determined that individual members of a housing society cannot invoke arbitration for disputes with developers under a development agreement, as they are not parties to the agreement. The ruling emphasized the necessity of consent from the society to pursue arbitration, reinforcing the bilateral nature of arbitration agreements. These court decisions highlight the evolving interpretations of arbitration law in India, addressing both the inclusion of non-signatories and the limitations on individual claims within collective agreements.