Elgitread Lanka (Private) Limited vs Bino Tyres (Private) Limited – SC APPEAL NO. 106/08-2010

In the case between Elgitread Lanka (Private) Ltd. and Bino Tyres (Private) Ltd., the court addressed the issue of the validity and enforceability of an arbitration clause contained in a Franchise Agreement under the Arbitration Act, particularly considering the non-existence of the arbitral institution named in the agreement. The court held that the arbitration agreement remained valid and enforceable, and that the Commercial High Court lacked jurisdiction to proceed with the action once an objection was raised pursuant to Section 5 of the Arbitration Act. Emphasis was placed on the principle that the absence or non-functionality of a specific arbitral institution does not undermine the parties’ intent to arbitrate. The decision drew upon statutory interpretation of the Arbitration Act (n