ANALYSING THE SCOPE OF ARBITRABILITY OF DISPUTES IN INDIA: JUDICIAL EVOLUTION

Arbitrability determines whether a particular dispute can be resolved through arbitration or must be adjudicated by courts or statutory authorities. In India, the concept has evolved through judicial interpretation under the framework of the Arbitration and Conciliation Act, 1996. While arbitration is intended to provide an efficient and party driven mechanism for dispute resolution, not all disputes are considered suitable for arbitration. The determination of arbitrability therefore plays a crucial role in defining the scope and limits of arbitration as an alternative dispute resolution mechanism. The jurisprudence on arbitrability in India has been significantly shaped by decisions of the Supreme Court. The Court in Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. introduced the distinction between rights in rem and rights in personam, laying down an important foundation for determining which disputes may be referred to arbitration. Subsequently, in A. Ayyasamy v. A. Paramasivam, the Court examined the arbitrability of disputes involving allegations of fraud and clarified the circumstances in which such disputes may still be resolved through arbitration. The law was further consolidated in Vidya Drolia v. Durga Trading Corporation, where the Supreme Court formulated the four-fold test to determine non-arbitrable disputes and provided greater clarity on the scope of judicial intervention at the stage of referral to arbitration. This paper examines the development of the doctrine of arbitrability in India through these landmark decisions and analyses the principles that guide courts in determining whether a dispute is capable of being resolved through arbitration. It seeks to highlight the evolving judicial approach that balances party autonomy with the need to preserve matters involving public rights and statutory mandates within the jurisdiction of courts. Through a doctrinal analysis of leading judgments, the paper aims to assess the current legal position on arbitrability and its implications for arbitration practice in India.