Court’s Role U/S 11 A & C Act Restricted To Confirming Existence Of Valid Arbitration Agreement: Delhi HC

The Court said that once the existence of an arbitration agreement is confirmed by the Court, it refrains from delving into other issues, which are to be decided by the arbitral tribunal or sole arbitrator.

The Court was hearing a petition under Section 11 of the Arbitration and Conciliation Act, 1996 seeking the appointment of an independent sole arbitrator to adjudicate the disputes between the parties.

The bench of Justice Amit Bansal observed, “the role of the Court is limited to verifying the existence of a valid arbitration agreement. Once the court confirms that the arbitration agreement exists, it refrains from delving into other issues, which are to be decided by the arbitral tribunal or sole arbitrator as the case may be.”

Brief Facts-

The Petitioner M/s KLD Creation Infrastructure Pvt. Ltd. was awarded a contract for road rehabilitation but claims the Respondent National Highways And Infrastructure Development Corporation Limited didn't fulfil obligations, leading to delays and financial issues. The Respondent admitted to granting an extension but is accused of setting up the Petitioner to fail. Despite efforts to continue work, the Respondent terminated the contract abruptly. The Petitioner invoked conciliation, but the Respondent ignored it and issued a new bid notice. Hence, the Petitioner seeks arbitration.

The Court noted that the Act was amended by the Arbitration and Conciliation (Amendment) Act, 2015 and the said amendment introduced Section 11(6A) of the Act.

The Court mentioned the Supreme Court decision in BSNL v. Nortel Networks Private Ltd., (2021) 5 SCC 738, where according to the Court SC observed, “the effect of the amendment to the Act was that if the existence of the arbitration agreement was not in dispute, all other issues would be left for the arbitral tribunal to decide.”

Accordingly, the court-appointed the sole arbitrator to adjudicate the disputes between the parties. The arbitration will be held under the aegis of the DIAC (Delhi International Arbitration Centre).

Finally, the Court disposed of the Petition.

Cause Title: M/S KLD Creation Infrastructre Pvt. Ltd. v. National Highways And Infrastructre Development Corporation Limited (Neutral Citation: 2024:DHC:4259)

Appearance:

Appellant: Adv. Anurita Panda

Respondent: Adv. Rajdipa Behura, Adv. Philomon Kani, Adv. Neha Dobriyal and Adv. Simrat Kaur Sareen

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