Vidya Drolia v. Durga Trading Corporation | An Explainer

by Rishi Batta Law Firm

While considering whether lease deeds are arbitrable, the SC was tasked with the deeper analysis of two interconnected questions: (i) the meaning of non-arbitrability of a dispute and (ii) who decides the question of non-arbitrability.

What is ‘non-arbitrability’?

Arbitrability was widely considered by the SC in Booz Allen[5] and Ayyasamy[6], which in broad strokes identified this to be a question for which the answers lie in the difference between actions in rem and actions in personam. It was observed that a right in rem protects the rights of the society at large and right in personam is for the protection of the individual. Therefore, actions in personam may be referred to arbitration. Booz Allen further went on to state that subordinate rights in personam arising out of rights in rem can be adjudicated by arbitrators.

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