Rights In Rem Are Not Arbitrable – Supreme Court

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Rights In Rem Are Not Arbitrable – Supreme Court

In Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. (2011), the Supreme Court of India ruled that disputes involving the enforcement of mortgage rights are non-arbitrable because they pertain to rights in rem—public rights affecting immovable property—rather than rights in personam, which are private and suitable for arbitration. Although Booz Allen sought to invoke an arbitration clause in their mortgage agreement, the court determined that the enforcement of mortgage rights must be adjudicated by courts with jurisdiction over property disputes, as arbitration cannot appropriately address issues involving public rights. The decision underscored that for a dispute to be arbitrable, it must be covered by an arbitration agreement, have been referred to arbitration by the parties, and be capable of resolution through arbitration, thereby reaffirming the principle that matters such as mortgage enforcement, alongside other non-arbitrable disputes like criminal, matrimonial, or taxation issues, should be resolved within the judicial system.

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