The defendant employer brought a motion to stay the plaintiff's wrongful dismissal action, arguing the parties were bound by a mandatory arbitration clause in the plaintiff's employment contract.
The court first determined that the plaintiff, an insurance field agent, was an employee rather than an independent contractor.
The court then found that the second and third contracts, which introduced the arbitration clause, were invalid for lack of fresh consideration because they diminished the plaintiff's rights without providing any new benefit.
Consequently, the arbitration agreement was invalid under section 7(2) of the Arbitration Act, 1991, and the motion to stay the action was dismissed.
