Contract Discharged By Settlement – Dispute Under Contract Is A Deadwood; Cannot Be Referred To Arbitration: Bombay High Court

Contract Discharged By Settlement – Dispute Under Contract Is A Deadwood; Cannot Be Referred To Arbitration

Case: Vishwajit Sud & Co. versus L & T Stec JV, Mumbai

Coram: Justice G.S. Kulkarni

Case No.: Arbitration Application No. 295 Of 2021

Court Observation: “There is thus a clear attempt on the part of applicant appears to be to wriggle out of the settlement and drag the respondent into unwarranted arbitration so as to resurrect dead issues. The Court cannot be oblivious to such conduct of the applicants in which considering the reliefs as prayed for as such conduct of the applicants is certainly not a conduct of a bonafide litigant.”

“The legal position which would be brought about by virtue of a settlement agreement as entered between the parties is that such settlement would discharge the contract by mutual agreement which is a process akin to the process the parties having entered into a contract, thereafter decide to discharge the contract by mutual agreement. Such eventuality is well-known in common law as accord and satisfaction by substituted agreement.”

“Adverting to the position in law as being consistently held by the Supreme Court in the decisions as noted above, in the facts of the present case, it is crystal clear that the applicants with open eyes had entered into a settlement agreement with the respondent. If there was to be any apprehension of a fraud, coercion, undue influence or duress, the settlement agreement which was conceived on 31 October, 2020 could not have have ever been signed by the applicants on 2 July, 2021”

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Contract Discharged By Settlement,