Arbitration Compulsory For Resolving Inter-Bank Disputes Arising Under SARFAESI Act: Supreme Court

The Supreme Court has ruled that all disputes between banks, financial institutions, Asset Reconstruction Companies (ARCs), and qualified buyers over secured assets must be resolved through arbitration under Section 11 of the SARFAESI Act. A Bench of Justices JB Pardiwala and Pankaj Mithal held that such matters cannot be adjudicated by Debt Recovery Tribunals (DRTs), which lack jurisdiction in inter-bank disputes. Legal Fiction Replaces Written Arbitration Agreements The Court clarified…