Supervisor or Saboteur: The Impact of RERA on Indian Real Estate Arbitration
Keywords:
Real Estate Regulatory Authority, Arbitration and Conciliation Act, Jurisdictional Conflict, Section 79 RERA, Arbitrability, Homebuyer Protection, Judicial Divergence, Vidya Drolia Test, Amendment Bill 2024Abstract
The Real Estate (Regulation and Development) Act, 2016 (RERA) was enacted to protect homebuyers and regulate the real estate sector in India. Due to its interaction with the Arbitration and Conciliation Act, 1996, there has arisen significant jurisdictional confusion over whether disputes covered by RERA are arbitrable, given an arbitration clause in the agreement. Through doctrinal analysis of statutory provisions and judicial precedent from 2016 to June 2026, the paper examines the tension to determine whether RERA acts as a “handmaiden” to arbitration or a “spoiler” that displaces it. The study reveals a significant judicial divide: the Bombay High Court has declared RERA disputes non-arbitrable on grounds of their erga omnes effect on third-party rights, while the Gauhati and Delhi High Courts allow arbitration through the election doctrine. The lack of coordination between the consumer and developer was due to the ambiguous drafting in Sections 79, 88, and 89 of RERA, and the absence of a clear and unequivocal ruling by the Supreme Court on RERA arbitrability following Vidya Drolia. It is noteworthy that the Arbitration and Conciliation (Amendment) Bill, 2024, which proposes landmark reforms in institutional arbitration, remains under consultation as of mid-2026 and has not commenced. As the findings, RERA, if left unguided by the Supreme Court, currently acts more as a spoiler than a regulator of arbitration, forcing the parties to trade off their autonomy and enabling forum shopping. According to the findings, there is an ongoing debate over statutory interpretation, consumer protection, and the future of real estate dispute resolution in India.
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