"You're Family Members Ultimately": Supreme Court Suggests Lalit Modi, His Mother Bina Modi & Siblings Solve Property Dispute Through Mediation In India

The Supreme Court of India on Monday suggested businessman Lalit Modi, his mother Bina Modi, and his brother and sister to solve their ongoing family property dispute through mediation in India. Lalit Modi had initiated arbitration proceedings in Singapore over property disputes in the family. The same was opposed by Lalit Modi's mother Bina Modi, his sister Charu and brother Samiras who filed a suit seeking to restrain those proceedingsA Bench comprising Chief Justice of India NV Ramana, Justice Surya Kant and Justice Hima Kohli was hearing a petition filed by businessman Lalit Modi challenging a Delhi High Court judgment which held as maintainable the anti-arbitration injunction suit filed by his mother and siblings against him.While the Bench initially stated that being family members, the parties may agree to Arbitration or Mediation in India, it later suggested that they should resort to mediation. The Bench also at the outset clarified that it is only a suggestion and the parties can choose to not agree to the same."What we feel is, it is a dispute of family members apart from trust etc. There's a provision in your deed also about resorting to mediation, or arbitration. This is only a suggestion. Why don't you agree for mediation or arbitration in India?" CJI told the Counsels appearing for both parties.The Bench made suggestion after Senior Advocate Harish Salve appearing for petitioner Lalit Modi agreed that while they are ready for arbitration the other side is not.However, Senior Advocate Kapil Sibal appearing for respondents (Lalit Modi's mother and siblings) submitted that they don't don't have a problem with mediation and had in fact suggested mediation even before the High Court."We had said we're ready to settle the matter. We're ready to give son the share." Mr Sibal said.Addressing Mr Salve, the Bench said, "The impression one may get is, you (Lalit Modi) are not in India. The other family members are here. You want International arbitration to be decided by Singapore centre etc. You are family members ultimately, whatever money or property you'll ultimately get according to trust deed. We don't suggest arbitration, we suggest mediation." Both Senior Advocate Harish Salve and Senior Advocate Kapil Sibal agreed to decide on one venue for mediation and come back to the Court with the same, so a formal final order can be passed. The Bench will take up the matter on 13th December next.Courtroom Exchange: During the hearing, Senior Advocate Harish Salve submitted that the present matter involves a legal question of construction of Section 5 of the Arbitration act. He submitted that a suit was filed to injunct an arbitration, which was dismissed by the single judge stating that section 5 is an absolute bar, and whatever are the objections they have to be raised before the arbitrators. He submitted that, "The Division Bench in appeal reversed the order saying that by not compelling me to file a written statement and apply under section 8, single judge made a mistake. Since if I had filed a section 8, they'd have had opportunity of arguing that arbitration clause is void."Mr Salve submitted that their case before the High Court was simple, that section 5, as also interpreted by Supreme Court, is an absolute bar. A suit cannot be brought in to stop an arbitration and a suit if filed, it is barred by section 5 . Therefore the suit was rightly dismissed by the Single Judge as the suit wasn't filed on merits, it was filed only to injunct arbitration. He submitted that the present case is one where admittedly there is an arbitration clause, that clause relates to a deed of trust of a private family. According to the petitioner , the trust has now been executed as upon death of the father, property was to be distributed amongst the three heirs."We argued out 2-3 defences, to say these are all matters to be decided by arbitration. The Single bench said you have defences to go to arbitration," Salve said." So you want arbitration & the other side doesn't," the Bench asked."Yes. 2-3 years this dispute has been going on. The deed of trust is very simple, the settler has died and parties haven't agreed on how to continue so property has to be sold and distributed. Last 2-3 hearings we've been dancing around, some preliminary objection is being raised about some power of attorney, etc," Mr Salve said.Senior Advocate AM Singhvi, also appearing for the petitioner submitted that the suit was an injunction suit against initiation of arbitration, a suit unknown to the law. A suit to injunct initiation of arbitration isn't maintainable is what the Single Bench of the High Court had held.Mr Singhvi argued that the matter has been distorted to suggest its a matter of Trust Act, to take unfair advantage of principles that actual enforcement of trust matters under trust act are not arbitrable. However, it is actually a family settlement, where patriarch who died said, if there's lack of unanimity, everything including...

"You're Family Members Ultimately": Supreme Court Suggests Lalit Modi, His Mother Bina Modi & Siblings Solve Property Dispute Through Mediation In India

Srishti Ojha

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