Madras Sporting Youngsters Football Club vs Tamil Nadu Football Association

IN THE HIGH COURT OF JUDICATURE AT MADRAS

RESERVED ON :25.01.2022

PRONOUNCED ON : 31.01.2022

CORAM:

THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSE

O.P.No.563 of 2019 and O.A.No.1210 of 2018

Madras Sporting Youngsters Football Club Rep. By its Honarary Secretary T.P.Thangaraj ..... Petitioner

Vs

1. Tamil Nadu Football Association Rep. By its Presidents Room No.73, Jawaharlal Nehru Stadium, Chennai – 600 003.

2. Chennai Football Association Room No.73, Jawaharlal Nehru Stadium, Chennai – 600 003.

3. Rohit Ramesh 4. E. Sugumaran 5. Ramu 6. S. Anandaraj 7. K.Madurai 8. Srish Balakrishnan 9. E. VallavanSingiah 10. V.M.P. Hari Prasad 11. D.R. Padmanabhan

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12.T. Ramesh Babu 13. M.L. Alex Dominic 14. C. Balaji 15. V. Durai 16. S. Grand Durai Pandian 17. S.K. Gokul Ram 18. Joseph Antony Noel 19. P. Munuswamy 20. S. Rajan 21. B.Raghupathy 22. S.K. Thanigaivelan 23. V. Thiyagarajan 24. E. Venkatesan ...Respondents

Prayer: Petition filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 to appoint arbitrators to settle the disputes with regard to the manner of conduct of the elections and the elections held on 30.06.2018 to the 2nd respondent Association and all other related matters.

For Petitioner : Mr.Arun C. Mohan For Respondents : Mr.J.Sivanandaraaj for Mr.Maheshkumar for R2

ORDER

The question that arises for consideration in this petition filed under

Section 11 of the Arbitration and Conciliation Act, seeking for

appointment of an Arbitrator is whether a dispute pertaining to election of

office bearers of a Society in terms of its bye-laws is arbitrable.

2. The dispute relates to the election for the post of office bearers

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namely one President, four Vice Presidents, one Secretary, four Assistant

Secretaries, one Treasurer and ten Executive Committee Members in the

2nd respondent Association for the period 2018-2022 which was held on

30.06.2018. The 1st respondent is the State Association and the 2nd

respondent is a District Association, which is controlled and monitored by

the 1st respondent. The 4th respondent in the said election was elected as

Secretary for the 2nd respondent Association. The petitioner challenges

the election of the 4th respondent as Secretary of the 2nd respondent

Association. According to the petitioner, there is an arbitration agreement

in the bye-laws of the 2nd respondent Association and as per the said

arbitration agreement, parties are entitled to refer any dispute even in the

nature of one raised by the petitioner to arbitration. Since there was no

consent given by the respondents for arbitration, the petitioner has filed

this petition seeking for appointment of an Arbitrator.

3. However, it is the contention of the respondents that the nature of

the dispute raised by the petitioner which is an election dispute cannot be

referred to arbitration as it is not an arbitrable dispute. According to them,

the dispute raised by the petitioner is of public domain and third party

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interest are involved and therefore such a dispute cannot be adjudicated by

an Arbitral Tribunal. Further it is their contention that the arbitration

agreement referred to in the respective bye-laws of the 1st and 2nd

respondent Associations is not meant for deciding election disputes

pertaining to election of office bearers.

4. Heard Mr.Arun C. Mohan, learned counsel for the petitioner;

and Mr.J.Sivanandaraaj, learned counsel for the 2nd respondent.

5. Mr.Arun Mohan, learned counsel for the petitioner drew the

attention of this Court to Article 66 of the 1st respondent's bye-laws and

would submit that it facilitates referring any dispute to arbitration so long

as it does not fall under the purview of the other two committees, i.e. the

Disciplinary Committee or the Appeals Committee. According to him, the

present dispute is a dispute between the members of the 1st respondent

Association and hence directly falling under the purview of Article 66 and

therefore, it is an arbitrable dispute.

6. Mr.Arun Mohan, also submits that Section 16 of the Arbitration

and Conciliation Act, 1996 empowers the Arbitral Tribunal to rule on its

own jurisdiction as and when the jurisdiction of the Arbitral Tribunal is

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questioned. Therefore, according to him, when there is an arbitration

agreement found in the bye-laws of the 1st respondent, this Court will

have to necessarily appoint an Arbitrator under Section 11 of the

Arbitration and Conciliation Act, 1996 and if at all any question regarding

jurisdiction of the Arbitral Tribunal is raised, it can be done only under

Section 16 of the Arbitration and Conciliation Act before the Arbitral

Tribunal which is empowered to rule on its own jurisdiction.

7. He would further submit by way of illustration that the Tamil

Nadu Co-operative Societies Act does not by any means explicitly bars

arbitration proceedings and the same stands open to adaptation to any

Society so far as it is confined to law. According to him, there being no

exclusion of resorting to arbitration under the law governing the 1st

respondent Society, the present dispute cannot be precluded from arbitral

jurisdiction.

8. In support of his submission, Mr.Arun Mohan, learned counsel

relied upon a decision of the Hon'ble Supreme Court in the case of

Mayavati Trading Pvt. Ltd., V. Pradyuat Deb Burman reported in 2019

8 SCC 714 and would submit that the scope of a judicial authority under

Section 11 is only to see whether there exists an arbitration agreement

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between the parties. According to him, as per the said decision all other

preliminary issues have to be decided only by the Arbitral Tribunal and

cannot be decided under Section 11 of the Arbitration and Conciliation

Act.

9. Mr.Arun Mohan, learned counsel also relied upon the decision of

a learned Single Judge of this Court in the case of Tirunelveli District

Football Association, v The President, Tamil Nadu Football

Association and another reported in 2016 (1) CTC 26 and would submit

that in that decision also it was held that a writ petition cannot be

entertained against the very same 1st respondent Association herein as

there is an effective and efficacious alternative remedy of arbitration.

10. Mr.Arun Mohan, learned counsel also drew the attention of this

Court to another judgment of the Hon'ble Supreme Court in the case of

Afcons Infrastructure Ltd. V. Cherian Varkey reported in 2010 (8) SCC

24 and in particular, he referred to paragraph No.27 of the said judgment

which has listed out the categories of cases that are normally considered to

be not arbitrable having regard to their nature. He would submit that the

present dispute will fall under the exception to category No.(ii) mentioned

in paragraph No.27 as it involves a dispute between two groups trying to

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get control over the Management of a Society. According to him, though

the present dispute is an election dispute, no third party interest are

involved as no other party has questioned the validity of the election of

the 4th respondent as Secretary excepting for the petitioner and the

petitioner has also arrayed all the parties as party respondents who may be

aggrieved by any interference by the Arbitral Tribunal.

11. Mr.Arun Mohan, learned counsel finally drew the attention of

this Court to the latest decision of the Hon'ble Supreme Court as regards

arbitrability of disputes viz., Vidya Drolia V. Durga Trading

Corporation reported in 2021 (2) SCC 1. According to him, the present

dispute raised by the petitioner is not an action in rem as the petitioner's

grievance is only against the 4th respondent, who has been elected as

Secretary and according to him any relief granted by the Arbitral Tribunal

will not affect the rights and liabilities of the persons who are not bound by

the arbitration agreement. Therefore, according to him Vidya Drolia's

case referred to supra supports the case of the petitioner for referring the

dispute to arbitration.

12. Per contra, Mr.Sivanandaraaj, learned counsel for 2nd

respondent would submit as follows :-

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a) The dispute challenging the election process is not an arbitrable dispute.

b) The dispute in relation to election falls within the domain of public forum.

c) Dispute challenging the election in an association can only be challenged in a Civil Suit.

d) The election dispute is not covered under the ambit of arbitration clause provided under the bye-laws of the 1st respondent Association.

e) The reason for challenging the election of Mr.E.Sugumaran, the 4th respondent does not exist any more since, the Arbitral Award dated 18.11.2017 passed against him which is the basis of the dispute raised by the petitioner has been set aside by order of this Court on 26.02.2020 in O.P. No.627 of 2018 and hence the entire dispute is a deadwood.

f) Few respondents in the application and petition are not parties to the Arbitration agreement and hence not amenable to arbitration.

g) Under Section 89(2) of the Code of Civil Procedure, 1908 the applicability of Alternative Dispute Resolution to certain categories which clearly excludes dispute in relation to elections in societies, clubs, associations etc.

h) It is only the Civil Court which has competent jurisdiction to decide a dispute regarding election of office

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bearers to societies.

i) Validity of the election could be decided only by a competent Civil Court as the parties are required to adduce evidence in support of their claim.

j) The dispute relating to an election in a Society is an action in rem and can be adjudicated only by the Courts and not by an Arbitral Tribunal.

13. Mr.Sivanandaraaj, learned counsel drew the attention of this

Court to the alleged arbitration clauses found in the bye-laws of the 1st

respondent Association, which is the basis for the petitioner to request for

arbitration and would submit that the said arbitration clauses are not meant

to decide election disputes pertaining to election of office bearers to the

2nd respondent Association. According to him, Article 67 of the 1st

respondent's bye-laws which provides for jurisdiction of Arbitrators clearly

sets out the disputes which can be referred to Arbitration. According to

him, the Arbitral Tribunal mentioned therein refers to the power of the

Arbitral Tribunal to hear appeals against the decisions and disciplinary

sanctions of the last instance after all previous stages of appeal available at

the Tamil Nadu Football Association, member, club level have been

exhausted, which would necessarily mean that the Arbitral Tribunal is in

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the nature of an Appellate Authority. According to him, the election

dispute raised by the petitioner does not fall under the said category and

therefore it is not arbitrable.

14. In support of his submissions Mr.Sivanandaraaj, learned

counsel for the respondents drew the attention of this Court to the

following authorities:

a) Booz Allen & Hamilton Inc. V. SBI Home Finance

Ltd., reported in 2011 5 SCC 532 and would submit that as the

dispute raised by the petitioner involves third party interest and is

an election dispute and falls under public domain and therefore the

action contemplated by the petitioner is an action in rem, which is

not arbitrable..

b) Vidya Drolia V. Durga Trading Corporation reported

in 2021 (2) SCC 1. He would submit that in paragraph 76.1(1) of

the aforesaid decision, it has been made clear that when the cause

of action and subject-matter of the dispute relates to an action in

rem, that do not pertain to subordinate rights in personam that

arise from rights in rem, the dispute is not arbitrable. According to

him, the present dispute raised by the petitioner is under the said

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category and therefore, it is not an arbitrable dispute.

15. Mr.Sivanandaraj, learned counsel also would submit that the

decision relied upon by the learned counsel for the petitioner in Afcons

Infrastructure Ltd. V. Cherian Varkey reported in 2010 (8) SCC 24

also supports the case of the respondents as according to him, the Hon'ble

Supreme Court in the said decision has made it clear while listing out some

of the categories of the cases, which are not arbitrable has held in

paragraph No.27 (i) that representative suits under Order 1 Rule 8 which

involve public interest or interest of numerous persons who are not parties

before the Court cannot be referred to arbitration. According to him, the

present dispute raised by the petitioner involves public interest and the

interest of numerous other persons who are not parties to the arbitration

and therefore, the dispute raised by the petitioner is not an arbitrable

dispute.

16. Mr.Sivanandaraj, learned counsel also drew attention of this

Court to an unreported order passed by a learned Single Judge of this

Court dated 28.06.2019 in Application No.1775 of 2019 in C.S. No.126 of

2019 in the case of Tamil Nadu Football Association vs. Pennar Senior

FC and would submit that the learned Single Judge in an election dispute

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involving the very same 1st respondent Football Association after

considering Article 66, 67 and 68 of the 1st respondent's bye-laws which is

also relied upon by the petitioner here also held that the Arbitral Tribunal

constituted by the 1st respondent Association is in the nature of an

appellate authority which can hear only the disputes relating to disciplinary

sanctions made against the members and does not have the jurisdiction to

adjudicate the disputes involving elections. Therefore, according to him,

there is no arbitration agreement for adjudicating an election dispute.

17. Mr.Sivanandaraj, learned counsel finally drew the attention of

this Court to a judgment of the Delhi High Court in the case of Utkarsh v.

Delhi Bar Association reported in 2014 SCC Online Del 878 involving

Delhi Bar association and would submit that the Delhi High Court held

that the process of election is separate from the business of the committee

or executive and therefore the arbitration clause contained in the bye-laws

of the Delhi Bar Association does not cover disputes between the member

and the committee and therefore, the said dispute is not arbitrable.

According to him, if the ratio laid down by the Delhi High Court in the

aforesaid decision is applied to the case on hand also, the dispute raised

by the petitioner cannot also be referred to arbitration.

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18. Mr.Sivanandaraj, learned counsel would finally submit that the

basis for the dispute raised by the petitioner are certain observations made

against the 4th respondent in the Arbitral Award dated 18.11.2017 which

has now been set aside by this Court on 26.02.2020 in O.P. No.627 of

2018. Hence, according to him, the dispute has now become a deadwood

and therefore, the question of appointment of an Arbitrator will not arise.

Discussion :-

19. Arbitration agreement is defined in Section 7 of the Arbitration

and Conciliation Act, 1996 and it reads as follows:-

7. Arbitration agreement (1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication [including communication

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through electronic means] which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

20. As seen from the aforesaid Section, the essentials of an

arbitration agreement are as follows :-

a) The existence of a dispute;

b) The existence of a defined legal relationship between the parties to the arbitration agreement;

c) The arbitration agreement must be in writing;

d) The intention of the parties to refer the dispute to arbitration must be there and it should be clearly discernible from the arbitration agreement; and

e) Arbitration agreement needs to be signed by the parties.

21. The dispute raised by the petitioner is an election dispute

involving the 2nd respondent Association in which the 4th respondent was

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elected as Secretary which is attempted to be challenged by the petitioner

through the arbitration process. The 4th respondent is not a member of the

2nd respondent Association as the Football clubs are the only members of

the 2nd respondent Association and they can alone become members in it.

Hence the 4th respondent in his individual capacity is not a party to the

bye-laws of the 1st and 2nd respondent Association which according to the

petitioner contains an arbitration agreement and the Arbitral Tribunal

constituted in terms of the said arbitration agreement is empowered to

decide an election dispute. As seen from the definition of an arbitration

agreement, there must be an intention to go for arbitration. The intention

of the parties to refer the dispute to arbitration should be clearly

discernible from the arbitration agreement. The arbitration clauses based

upon which the petitioner seeks for an arbitration reference are extracted

hereunder :

Arbitration clauses contained in the bye-laws of the Tamil Nadu Football Association (1st respondent) Article 66 ARBITRATION TRIBUNAL

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66.1 TFA shall create an option for recourse to Arbitration, by nominating a panel of independent arbitrators who may be advocate or Magistrate to resolve any disputes between TFA, its members, Clubs, players, officials and all those involved in the Game of Association Football. The Arbitration Tribunal will only deal with the internal disputes that do not fall in the jurisdiction of the other two judicial bodies of TFA. 66.2 With regard to substance, the arbitrators shall be guided and apply the various regulations of TFA and AIFF and the Indian Law. 66.3 The Arbitration procedure shall be according to the special regulations made for this purpose.

Article 67 JURISDICTION OF ARBITRATORS 67.1 Only the Arbitrators shall deal with appeals against decisions and disciplinary sanctions of the last instance after all previous stages of appeal available at TFA, Member, Club level have been exhausted. The reference to arbitrators shall be sought by an application made to the TFA Secretariat within 10 days of notification of the decision. 67.2 The Arbitrators shall not, however, hear appeals on :

a) Violation of the Laws of the Game

b) Suspension of up to one year.

c) Decisions passed by an independent and duly constituted Arbitration Tribunal of a Member.

d) Decisions of Disciplinary and Appeal Committee 67.3 The Arbitrators are also empowered to deal with disputes between a third party and any entities or person mentioned in para-1 if an arbitration agreement exists.

Arbitration clauses contained in the bye-laws of the 2nd respondent Association :

46.1 The TFA shall create an option for recourse to arbitration by nominating a panel of independent arbitrators to resolve any dispute that may arise between TFA, its members, Clubs, players, officials and all those involved in the game of Association Football. 46.2 The Arbitration Tribunal will only deal with internal disputes that do not fall under the jurisdiction of other two judicial bodies of TFA i.e., Disciplinary and Appeals Committee.

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46.1 The TFA shall create an option for recourse to arbitration by nominating a panel of independent arbitrators to resolve any dispute that may arise between TFA, its members, Clubs, players, officials and all those involved in the game of Association Football. 46.3 With regard to the substance the arbitrators shall be guided to apply the various regulations of TFA, AIFF, AFC and FIFA and the Indian Law.

46.4 The Arbitration procedure shall be according to the Special Regulations made for this purpose.

46.5 The Arbitrators shall only deal with the appeals against decisions and sanctions of the last instance after all previous stages of appeal available at the levels of Club, DFA and TFA have been exhausted. 46.6 The Reference to Arbitrators shall be sought by an application made to the Secretariat of TFA within 10 days of the notification of the Decision.

46.7 The Arbitrators shall not however hear appeals on;

a) violations of the Laws of the Game

b) Suspension of up to four matches or up to six months in the case of players

c) Suspension of officials, Coaches, Referees upto a period of one year

d) Decisions passed by an independent and duly constituted arbitration Tribunal of a Member

e) Decisions of Disciplinary and Appeal Committees of TFA 46.8 The Member Clubs, players, Coaches, Referees and Officials shall agree to recognize the arbitrators appointed by TFA as independent judicial authority and to comply with the decisions passed by them. 46.9 Recourse to Ordinary Courts of Law is prohibited unless specifically provided for in the regulations of TFA.

22. The petitioner is a member of the 2nd respondent Association.

The petitioner is aggrieved by the election of the 4th respondent as the

Secretary of the 2nd respondent Association. The 4th respondent in his

individual capacity is not a Member of the 2nd respondent Association

though the football club he represents may be a Member. He has neither

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signed the bye-laws of the 2nd respondent Association nor has he agreed to

the terms and conditions contained therein. Insofar as the arbitration

clauses contained in both the bye-laws are concerned, they are not binding

upon the respondents 3 to 24. As seen from the bye-laws, it is not

discernible that the respondents 3 to 24 had the intention to refer any

dispute to arbitration. There is also no documentary evidence placed

before this Court by the petitioner to show that the respondents 3 to 24 had

accepted the alleged arbitration agreement found in the bye-laws of both

the Associations.

23. The definition of an Arbitration agreement as found in Section 7

of the Arbitration and Conciliation Act, 1996 also makes it clear that there

must be a defined legal relationship between the parties for the existence

of an arbitration agreement. In the case on hand as on the date of the bye-

laws of the 1st respondent Association as well as the 2nd respondent

Association, the 4th respondent whose election is challenged by the

petitioner through arbitration was no way concerned with the respective

bye-laws and may not also be aware of the terms and conditions of the

respective bye-laws. Therefore, the intention to arbitrate in accordance

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with the alleged arbitration agreement found in the respective bye-laws

would not have arisen for the respondents 3 to 24 as in their individual

capacities, as they were never the signatories of the respective bye-laws or

the acceptors of the respective bye-laws in writing. Therefore at the

outset, this Court is of the considered view that there is no arbitration

agreement existing between the petitioner and the respondents 3 to 24 and

hence the dispute cannot be referred to arbitration.

24. Bye-laws of a Society are the internal regulations of the said

Society applicable to its Members and is a public document. It is easily

accessible to anyone and is not person-centric. In the case of person-

centric contracts, the terms and conditions contained therein apply only to

the parties of the said contract alone and they are personal in nature.

There may also be certain confidential details mentioned in person-centric

contracts.

25. Person-centric contracts are not available and accessible easily

to the general public at large and if the parties to the said contract choose

to keep it confidential amongst themselves, they can do so. Whereas

contracts in the nature of bye-laws cannot have the same privilege. There

may be numerous persons who may be interested in the bye-laws. The

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parties interested may be players, staff, members, sports officials etc., and

the list can go on and on and it is never ending and predictable. Therefore,

the election dispute raised by the petitioner in terms of the bye-laws can

only be adjudicated through a public fora (Courts) and not through Arbitral

Tribunal which cannot be witnessed by the general public at large and any

person interested in the dispute cannot also approach the said Arbitral

Tribunal as he is not a party to the arbitration agreement.

26. Though there is an implicit reference to non-arbitrability under

the Arbitration and Conciliation Act, 1996 but however it does not define

arbitrability nor does it specify any set of disputes to be non arbitrable. In

this regard, Law has developed in this subject largely through judicial

pronouncements.

27. The judgment of the Hon'ble Supreme Court in the case of Booz

Allen & Hamilton Inc. V. SBI Home Finance Ltd., reported in 2011 5

SCC 532 is considered a leading authority on this subject. The Hon'ble

Supreme Court in the later decision in the case of Vidya Drolia V.

Durga Trading Corporation reported in 2021 (2) SCC 1 also had a fresh

look at this issue. In Booz Allen & Hamilton Inc. V. SBI Home

Finance Ltd., reported in 2011 5 SCC 532, the Supreme Court was faced

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with a question as to whether an action for an enforcement of mortgage is

arbitrable. The Hon'ble Supreme Court answered this question in the

negative. But while doing so, it clarified in general terms that the

following two broad clauses of disputes are incapable of being resolved in

arbitration :

1) matters that are reserved by the law makers to be determined

exclusively by a public fora

2) matters which by necessary implication stand excluded from the

purview of a private fora. Within the second category actions for

enforcements of rights in rem, which the Court held are “unsuited for

arbitration” can only be adjudicated by Courts or public Tribunals.

28. A right in rem, the Hon'ble Supreme Court explained is a right

exercisable against the World at large. In contrast, the right in personam

is one exercisable against the specific individuals. In personam

proceedings are meant to decide the personal rights and interest of the

parties named in the action, whereas actions in rem are directed against

the property itself and determines the rights of the parties exercisable

against the public at large. The latter has an erga omnes effect which

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means i.e. “towards everyone”

29. The Hon'ble Supreme Court in Booz Allen's case held that,

traditionally all disputes relating to rights in personam are considered

amenable to arbitration; and all rights relating to rights in rem are required

to be adjudicated by Courts and public Tribunals. The Hon'ble Supreme

Court did clarify that this is not an inflexible rule and that subordinate

rights in personam arising from rights in rem have always been considered

arbitrable. In the course of its analysis, the Hon'ble Supreme Court has

also cited examples of various matters, which it considered as non-

arbitrable viz.,

a) Disputes relating to rights and liabilities which give rise to or

arise out of criminal offences;

b) Matrimonial disputes relating to divorce, judicial separation,

restitution of conjugal rights, child custody;

c) Guardianship matters;

d) Insolvency and winding up matters;

e) Testamentary matters (grant of probate, letters of administration

and succession certificate); and

f) Eviction or tenancy matters governed by special statutes where

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the tenant enjoys the statutory protection against the eviction.

30. On the specific issue before the Hon'ble Supreme Court

concerning mortgage actions, the Court held that such proceedings are not

arbitrable as they involve the enforcement of right in rem. The Hon'ble

Supreme Court also analysed the provisions of the Transfer of property

Act, 1882 and the Code of Civil Procedure, 1908 to conclude that these

statutes makes it clear that mortgage enforcement actions are required to

be decided only by a public fora (Courts) as opposed to private fora

(arbitrators).

31. In another decision of the Hon'ble Supreme Court in the case of

Vimal Kishor Shah & Ors. v Jayesh Dinesh Shah & Ors reported in

2016 8 SCC 788, the issue of arbitrability arose in the context of a dispute

inter se amongst the beneficiaries of a Deed of Trust. The Hon'ble

Supreme Court held that the disputes between the beneficiaries of the

Trust are non arbitrable.

32. The Hon'ble Supreme Court found that the arbitration clause

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contained in the Trust deed does not satisfy the requirements of Sections

2(b), 2(h) and 7 of the Arbitration and Conciliation Act mainly because

the beneficiaries are neither parties nor signatories to the Trust Deed nor

there is a separate arbitration agreement amongst them. The Hon'ble

Supreme Court while coming to this conclusion relied on its earlier

decision in Vijay Kumar sharma V. Raghunandan Sharma reported in

2010 (2) SCC 486 . In the case on hand also, the respondents 3 to 24 are

not parties to the respective bye-laws of the 1st and 2nd respondent

Association and they have also not signed any separate arbitration

agreement with the petitioner and therefore, as in the case of Vimal

Kishor Shah's case referred to supra, where a Trust Deed was involved,

here also the petitioner has not satisfied the requirements of 2(b), 2(h) and

7 of the Arbitration and Conciliation Act, 1996.

33. The Hon'ble Supreme Court has dealt with the issue of

arbitrability in several cases after Booz Allen & Hamilton Inc. V. SBI

Home Finance Ltd., reported in 2011 5 SCC 532, especially those

relating to allegations of fraud. However, the decision of the Hon'ble

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Supreme Court in Vidya Drolia V. Durga Trading Corporation reported

in 2021 (2) SCC 1, is the most comprehensive one on the issue on hand. In Vidya Drolia's case, the three Judge Bench of the Hon'ble Supreme

Court was required to determine the arbitrability of a landlord-tenant

dispute governed solely by the Transfer of property Act. Earlier, a two

Judge Bench of the Hon'ble Supreme Court in Himagni Enterprises vs.

Kamaljeet Singh Ahluwalia reported in 2017 10 SCC 706 had

answered those questions in the negative. On 28.02.2019 another two

Judge Bench of the Hon'ble Supreme Court in Vidya Drolia case No.1

reported in 2019 20 SCC 406 and disagreed with the ratio laid down in Himagni's case and referred the issue for determination by a larger

bench.

34. A reference was made to the Larger Bench which was required

to answer the following issues :

(i) The meaning of non arbitrability and when the subject matter of

the dispute is not capable of being resolved through arbitration and

(ii) conundrum - “who decides” - whether the Court at the reference

stage or the Arbitral Tribunal in the arbitration proceedings would decide

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the question of non-arbitrability.

35. After a detailed analysis, the three Bench of the Hon'ble

Supreme Court in Vidya Drolia V. Durga Trading Corporation reported

in 2021 (2) SCC 1 propounded the fourfold tests for determining when a

dispute is non arbitrable.

36. The four elements of the tests of non-arbitrability are :

a) when the cause of action and the subject matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem.

b) when the cause of action and the subject matter of the dispute affects third party rights; have erga omnes effect i.e., “towards everyone”; requires centralised adjudication, and mutual adjudication would not be appropriate and enforceable.

c) when the cause of action and the subject matter of the dispute relates to inalienable sovereign and public interest functions of the State and mutual adjudication would be unenforceable; and

d) when the subject matter of the dispute is expressly or by necessary implication non arbitrable as per the Mandatory statute(s).

37. The Hon'ble Supreme Court however clarified that the

aforementioned tests are not water-tight compartments. They dovetail

and overlap but when applied holistically and pragmatically will help to

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determine as to whether the dispute is non-arbitrable. In Vidya Drolia's

case, the Hon'ble Supreme Court has eloquently clarified that only with a

view to prevent wastage of public and private resources, a prima facie

review of the arbitration agreement is made by the Court under Section 11

to weed out any frivolous or vexatious claims. The decision in Vidya

Drolia's case has also been fortified by the latest judgment of the Hon'ble

Supreme Court in DLF Home Developers Limited v. Rajapura Homes

Private Limited & Anr. reported in 2021 SCC ONLINE SC 781 and in

that decision also it was held that the power under Section 11 of the

Arbitration and Conciliation Act does not denude the Court of its judicial

functions to look beyond the bare existence of an arbitration clause to cut

the deadwood. It was also held in the aforesaid DLF's case referred to

supra in paragraph 19 that the Court is not expected to act mechanically

merely to purport a dispute raised by an applicant at the doors of the

chosen Arbitrator. On the contrary, the Court(s) are obliged to apply their

mind to the core preliminary issues, albeit, within the framework of

Section 11(6-A) of the Act. Such a review is not intended to usurp the

jurisdiction of the Arbitral Tribunal but it is aimed to streamline the

process of Arbitration. Therefore, it is clear that even when an Arbitration

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agreement exists, it would not prevent the Court to decline a prayer for

reference if the dispute in question does not correlate to the said

agreement. The power of the Arbitral Tribunal under Section 16 of the

Arbitration and Conciliation Act to rule on its own jurisdiction will be a

futile exercise in cases where the dispute itself is not arbitrable as in the

present case. Therefore, the contention of the petitioner that the Court's

power under Sections 8 and 11 is only to see the existence of an arbitration

agreement and nothing more is rejected by this Court.

38. In the case on hand, the petitioner has challenged the election of

the 4th respondent as Secretary of the 2nd respondent Association through

arbitration. There are several members to the 2nd respondent Association.

There may be members who support the election of the 4th respondent as

the Secretary and others who may not. Apart from the members, being a

public body, there may be others who may be football players, officials

and members of the general public and the list is endless who may also be

in agreement with the election of the 4th respondent as Secretary of the 2nd

respondent Association. The dispute raised by the petitioner is not a

personal dispute and even according to the petitioner, the election of the 4 th

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respondent is challenged only in public interest for the sport of football.

39. Vidya Drolia's case referred to supra makes it clear that if the

subject matter of the dispute affects third parties rights, it is not an

arbitrable dispute. Hence, the dispute raised by the petitioner is not

arbitrable as the said dispute falls within the public domain and can be

adjudicated only by the public fora (Courts). The decision rendered by the

Hon'ble Supreme Court in the Afcons Infrastructure Ltd. V. Cherian

Varkey reported in 2010 (8) SCC 24 also makes it clear in paragraph

27(1) and (2) that disputes involving public interest or interest of numerous

persons who are not parties before the Court and disputes relating to

election of public offices are non arbitrable. The case on hand falls under

the said category as the 2nd respondent Association is a public Association

and election of office bearers to the said Association is only in public

interest for development and growth of football in the State of Tamil

Nadu. There may be numerous other interested persons who may have

active interest in the affairs of the 1st and 2nd respondent Association as

well as the election of its office bearers. The names of the interested

persons cannot be specifically ascertained and further they are also not

parties to the dispute raised by the petitioner.

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40. The dispute raised by the petitioner has also now become a

deadwood in view of the fact that the Arbitral Award passed against the

4th respondent on 18.11.2017 which is the basis of the dispute has been set

aside by this Court on 26.02.2020 in O.P. No.627 of 2018. Therefore,

applying the principles laid down by the Supreme Court in Vidya Drolia's

case and DLF's case, the dispute raised by the petitioner is non arbitrable.

41. The decision relied upon by the learned counsel for the

petitioner in Mayavati Trading Pvt. Ltd., V. Pradyuat Deb Burman

reported in 2019 8 SCC 714 has no bearing for the case on hand as the

dispute involved in the said decision was not an election dispute involving

bye-laws of an association and further in the present case as observed

earlier there is no arbitration agreement between the petitioner and the

respondents 3 to 24. A Single Bench decision of the Madras High Court

also relied upon by the learned counsel for the petitioner in the case of

Tirunelveli District Football Association, v The President, Tamil Nadu

Football Association and another reported in 2016 (1) CTC 26 will also

not apply to the facts of the present case as that was a decision rendered in

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a writ petition, which is a discretionary remedy. The learned Single Judge

refused to exercise his discretion since the Tamil Nadu Football

Association cannot be treated as an instrumentality of State and further

there is an alternative remedy for re-dressal of disputes through arbitration.

42. In similar circumstances, where the facts were akin to the case

on hand, a learned Single Judge of this Court in the case of Tamil Nadu

Football Association vs. Pennar Senior FC by its order dated 28.06.2019

in Application No.1775 of 2019 in C.S. No.126 of 2019 held while

considering Article 66, 67 and 68 of the 1st respondent bye-laws which the

petitioner has relied upon here also held that the Arbitral Tribunal referred

in those clauses is in the nature of an appellate authority, which can hear

only disputes relating to the disciplinary sanctions made against the

members by other judicial bodies of the Tamil Nadu Football Association.

Therefore, the learned Single Judge held that there is no arbitration

agreement between the parties as in that case also election for a District

Football Association was being challenged. Booz Allen & Hamilton Inc.

V. SBI Home Finance Ltd., reported in 2011 5 SCC 532, Vidya Drolia

V. Durga Trading Corporation reported in 2021 (2) SCC 1 and DLF

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also supports the contention of the respondents that the present dispute is

non arbitrable as the dispute falls within the public domain and is an action

in rem as it involves public interest.

43. In Utkarsh v. Delhi Bar Association's case referred to by the

learned counsel for the respondents reported in 2014 SCC Online Del

878 also supports the contention of the respondents that the election

dispute raised by the petitioner is a non arbitrable dispute and can be

adjudicated only by a competent Court of law.

44. For the foregoing reasons, the dispute raised by the petitioner is

a non arbitrable dispute and hence an Arbitrator cannot be appointed as

sought for by the petitioner in this petition.

45. In the result, the Original petition is dismissed. In view of the

dismissal of O.P. No.563 of 2019 due to the non arbitrability of the

dispute, O.A. No.1210 of 2018 filed under Section 9 of the Arbitration

and Conciliation Act by the petitioner is also dismissed.

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31.01.2022

Note : Issue order copy on 31.01.2022

vsi2

ABDUL QUDDHOSE, J.

vsi2

Pre-delivery order in O.P. No.563 of 2019 33/34 https://www.mhc.tn.gov.in/judis O.P. No.563 of 2019

31.01.2022

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