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In this case, the Bombay High Court held that the execution of a Conveyance Deed or Sale Deed renders an Arbitration Clause in the preceding Agreement for Sale legally ineffective. The Court observed that once a Conveyance Deed is executed, the Agreement for Sale, along with its terms, including the Arbitration Clause, ceases to have any effect as the contract stands fully discharged. The Appellants argued that the Arbitration Clause in the Agreement for Sale extended to subsequent documents, such as the Memorandum of Understanding (MoU) and the Allotment Letter, as they were part of a single, interconnected transaction. However, the Court rejected this contention, emphasizing that there was no specific reference to the Arbitration Clause in these subsequent agreements. The Court clarified that unless an Arbitration Clause is explicitly incorporated into a later agreement, it cannot be enforced for disputes arising under that agreement. The Court upheld the Trial Court’s finding that the MoU and Allotment Letter were separate transactions not covered by the Arbitration Clause in the Agreement for Sale. Consequently, the appeal filed under Section 8 of the Arbitration and Conciliation Act, 1996, was dismissed, with the Court ruling that the claims in the suit pertained solely to the MoU and Allotment Letter and not the Agreement for Sale. This judgment reinforces the principle that arbitration agreements must be expressly and specifically referenced in related contracts for enforceability.

https://indiankanoon.org/doc/94771253/