Disputes Exclusively Under Statutory Authorities' Jurisdiction Are Not Arbitrable : Supreme Court
The Supreme Court in the case of Dushyant Janbandhu v. Ms Hyundai AutoEver India Pvt. Ltd. reaffirmed that disputes falling exclusively within the jurisdiction of statutory authorities are non-arbitrable. A bench of Justices PS Narasimha and Sandeep Mehta ruled that disputes concerning wages and employee termination must be resolved exclusively by statutory authorities under the Payment of Wages Act, 1936 (PW Act) and the Industrial Disputes Act, 1947 (ID Act).
The case involved an employee of M/S Hyundai AutoEver India Pvt. Ltd., who appealed against a Madras High Court decision appointing an arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996. The appellant argued that disputes over non-payment of wages and termination fell within the exclusive jurisdiction of statutory authorities, rendering them non-arbitrable.
The Court set aside the High Court's decision, emphasizing that Section 22 of the PW Act prohibits civil courts and arbitral tribunals from addressing wage disputes, while Section 2(A) of the ID Act assigns jurisdiction over termination disputes to the Industrial Tribunal. Applying the arbitrability test from Vidya Drolia v. Durga Trading Corporation, the Court ruled the disputes non-arbitrable as they are governed by mandatory statutory provisions.
The Court also criticized the respondent’s pursuit of arbitration as an abuse of legal process, imposing a ₹5 lakh cost payable within three months. The appeal was allowed.