An arbitration clause in a Memorandum of Understanding precludes a court from entertaining a statutory application where an arbitrator has been appointed to resolve the dispute, reinforcing the primacy of arbitration agreements.

ORDER :

ASHOK S.KINAGI, J.

1. The petitioners filed this writ petition praying to quash the order dated 23.03.2021 passed by respondent No.1 vide Annexure-M, and sought a writ of prohibition regarding pending dispute initiated under Section 70 of the Karnataka Co-operative Societies Act, 1959, by respondent No.2 vide Annexure-L.

2. Brief facts, leading rise to the filing of this writ petition are as follows:

3. The petitioner is a reputed land developer. Respondent No.2 is a society registered under the provisions of Karnataka Societies Registration Act. The object of respondent No.2 society is to hold the lands enabling to form the layouts and sites for the purpose of distributing the sites in favour of the needy members of respondent No.2 society. The memorandum of understanding (‘MOU’ for brevity) was entered into between the petitioner firm and respondent No.2 society on 09.10.2009. As per the MOU, the petitioner has done substantial work. At that time, some differences arose between the petitioner and respondent No.2 society. There were exchange of communications and notices between the petitioner firm and respondent No.2 society. There is an arbitration clause in the MOU. The petitioner invoked the arbitration clause and filed a Civil Miscellaneous petition in C.M.P.No.127 of 2019 before this Court. The said Civil Miscellaneous petition came to be allowed, and this court nominated an arbitrator to resolve the dispute between the petitioner firm and respondent No.2 society. Pursuant to the order passed by this court in the Civil Miscellaneous petition, the arbitral tribunal has been constituted, and the claim petition was filed before the arbitral tribunal. Respondent No.2 approached respondent No.1 under Section 70 of the Karnataka Co-operative Societies Act. Respondent No.1 has passed the impugned order at Annexure-M for attachment before judgment. The petitioner, aggrieved by the impugned order filed this writ petition.

4. Heard the arguments of Sri. M.R.Rajgopal, learned senior counsel for the petitioners, and also learned counsel Sri. Devi Prasad Shetty for respondent No.2.

5. Learned senior counsel for the petitioner firm submits that the petitioner firm and respondent No.2 society have entered into Memorandum of Understanding and the dispute arose between the petitioner firm and respondent No.2 society and there is an arbitration clause in the MOU. The petitioner invoked an arbitration clause by filing a petition in CMP No. 127 of 2019. He submits that the arbitral tribunal has been constituted, and the proceedings are pending before the arbitral tribunal.

6. He submits that during the pendency of the proceedings before the arbitrator, respondent No.2 approached respondent No.1 and filed a petition under Section 70 of the Karnataka Co-operative Societies Act, and obtained an order of attachment before judgment. He submits that the matter is seized by the arbitral tribunal. Respondent No.1 could not have entertained the petition filed by respondent No.2 and to buttress his argument, he has placed reliance on the order passed by the Co-ordinate Bench of this Court in CMP No.4 of 2025, connected with other miscellaneous petitions, disposed of on 14.11.2025. Hence, he submits that the impugned order passed by respondent No.1 is without jurisdiction. Hence, on these grounds, he prays to allow the writ petition.

7. Per contra, learned counsel for the respondents supported the impugned order, and accordingly prays to dismiss the writ petition.

8. Perused the records, and considered the submissions of the learned counsel for the parties.

9. It is an undisputed fact that the petitioner firm and respondent No.2 society have entered into a Memorand