HC dismisses plea by Fedn of Motor Sports Clubs of India

The Madras High Court today dismissed a plea by The Federation of Motor Sports Clubs of India to refer any dispute between it and Mumbai's Sportscraft Sporting Company to arbitration.
Dismissing the plea, Justice R S Ramanathan said "according to me, the issue involved in this case is whether the Federation of Motor Sports Clubs of India can amend the criteria regarding qualification of a member and it cannot be decided in arbitration and it has to be decided in a court".
Originally a civil suit was filed by the Sporting company seeking to declare the resolution altering eligibility criteria for ordinary members in the council meeting held on November 6, 2012 as ultra vires and void.

They also sought for a permanent injunction restraining the Federation of Motor Sports Clubs of India, or persons claiming through or under them in any manner whatsoever giving effect to the resolution and altering the status of the Sporting Company from that of an ordinary member.
The Federation of Motor Sports Clubs of India filed an application before the Madras High Court to dismiss the above suit and prayed to refer the dispute to arbitration saying that they have agreed that disputes between them will be resolved by arbitration and accordingly the company executed an annual return form on December 13, 2011 wherein it has stated to follow the arbitration process for resolving the disputes.

"Having regard to the fact that there is no clear proof of existence of an arbitration agreement between the parties and the clause in the annual return will not have the effect of agreeing to refer any dispute to arbitration in the absence of any clause for arbitration in the Articles of Association and the issue involved in this suit is not an arbitral issue, in my opinion, the application to refer the dispute to arbitration cannot be sustained and the application is dismissed", the judge said.