Court U/S. 11(6) A&C Act Is Only Entitled To Examine Existence Of Arbitration Agreement And Timely Filing Of Petitions After Issuance Of Notice: Delhi HC
The Delhi High Court observed that under Section 11(6) of the Arbitration & Conciliation Act, 1996 the Court is only entitled to examine the existence of an arbitration agreement and timely filing of a Petition after issuance of notice under Section 21 of the Act.
The bench of Justice C. Hari Shankar observed, “This court has had earlier occasions to examine paras 110 to 134 of the decision in SBI General Insurance Co Ltd. The position that emerges from the said decision is that a Section 11(6) court is entitled only to examine two aspects.The first is whether there exists arbitration agreement between the parties. The second is whether the Section 11(6) petition has been filed within three years of the issuance of Section 21 notice. All other issues have to be left for decision of the learned Arbitral Tribunal.”
Senior Advocate Jayant Mehta appeared for the Appellant and Advocate V.N. Koura appeared for the Respondent.
Brief Facts-
The Petitioner and Respondent entered into a contract for civil works at Haldia Refinery with a clause providing for arbitration in case of disputes. A dispute arose between parties when Petitioner’s final bill was not honoured. The Petitioner issued a Section 21 notice seeking arbitration. Respondent contested the arbitrability of the claims. The Respondent also proposed three retired judges for arbitration. The Petitioner approached the Court by filing the Section 11(6) petition.
The Court mentioned the decision in SBI General Insurance Co Ltd and quoted, “…in Indian Oil Corporation Limited v. NCC Limited reported in (2023) 2 SCC 539. It was held that although the referral court under Section 11 of the 1996 Act may look into the aspect of “accord and satisfaction”, yet it is advisable that in debatable cases and disputable facts, more particularly in reasonably arguable cases, the determination of whether accord and satisfaction was actually present or not should be left to the arbitral tribunal…”
The Court said that the decision in SBI General Insurance Co Ltd has substantially reduced the scope of examination by a court exercising jurisdiction under Section 11 of the 1996 Act.
The Court said that there is undisputedly an arbitration clause between the parties and the issue of whether the disputes between the parties are arbitrable in view of a clause in the contract has, after the judgment in SBI General Insurance Co Ltd, to be left for decision by the learned Arbitral Tribunal.
The Court allowed the Petition.