Palwinder Singh Samra vs Sukhvinder Singh Samra
- Court
- Bombay High Court
ARBAP(L)-15700-2026.DOC
ARP
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION APPLICATION (L) NO. 15700 OF 2026
Mr. Palwinder Singh Samra
Aged: 55 years
2501, A-Wing Bhumiraj Hermitage,
Sector 18, Sanpada, Navi Mumbai,
Maharashtra – 400705. ...Applicant
Versus
Mr. Sukhvinder Singh Samra
Aged: 45 years
2502/2503, A-Wing Bhumiraj Hermitage
Sector 18, Sanpada, Navi Mumbai,
Maharashtra – 400705. ...Respondent
Mr. Rohaan Cama a/w Mr. Siddharth Samantrai and Mr. Mohit
Mokal i/b Abheek Melwani, for the Applicant.
Mr. Mayur Khandeparkar a/w Mr. Vatsal Gosalia, Mr. Devansh
Shah, Mr. Chandresh Rao and Mr. Aakash Naik, for the
Respondent.
CORAM ARUN R. PEDNEKER, J.
th
RESERVED ON : 29 JUNE 2026
nd
PRONOUNCED ON : 02 JULY 2026
JUDGMENT:-
1.
Heard Mr. Rohaan Cama, learned counsel for the
Applicant and Mr. Mayur Khandeparkar, learned counsel for
the Respondent.
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2.
The present Application is filed under Section 11 of the
Arbitration and Conciliation Act, 1996 (“Arbitration Act”),
seeking appointment of an Arbitral Tribunal, as the parties
have failed to collectively appoint an Arbitral Tribunal. It is
th
stated that as per Family Settlement Deed dated 15
November 2017, the dispute arising therein has to be settled
by the provisions of Clause 15 thereof, which provides for
arbitration. Clause 15 of the Family Settlement Deed dated
th
15 November 2017 is reproduced below for ready reference:
“15. All disputes, differences and questions whatsoever which
shall arise either during the continuance of this Agreement or
afterwards between the parties hereto or touching these
presents or the construction of application thereof or as to
any act, deed or omission of any of the parties hereto in any
way relating to these presents in implementation thereof shall
be referred to a sole arbitrator in case the parties to the
dispute agree upon one or otherwise to two arbitrators and to
an umpire to be appointed by such arbitrators before entering
upon the reference and such arbitration shall be held in
accordance with the Arbitration and Conciliation Act, 1996 or
any statutory modification or re-enactment thereof for the
time being in force. The entire Arbitration proceedings shall
be held, conducted and proceeded in the Navi Mumbai only.”
3.
It is stated that the Applicant and Respondent are real
brothers and were carrying joint partnership businesses.
Thereafter, on account of disputes, parties desired to separate
their partnership businesses and decided to distribute their
properties. For that purpose, they executed the Family
th
Settlement Deed dated 15 November 2017, which provided
for resolution of disputes by Arbitrator. The disputes could not
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be resolved. As such, notice under Section 21 of the
th
Arbitration Act was issued on 28 January 2026, invoking the
th
Clause 15 of the Family Settlement Deed dated 15 November
2017. Since there was no concurrence on appointment of an
Arbitrator, the present Application for appointment of
Arbitrator is filed.
4.
Mr. Rohaan Cama, the learned counsel for the Applicant,
has taken me through Clause 15 of the Memorandum of
Understanding of 2017 (“MoU of 2017”), prima facie,
showing the existence of the arbitration clause so also the
invocation notice and submits that the Sole Arbitrator be
appointed.
5.
Per contra, Mr. Mayur Khandeparkar, the learned
counsel for the Respondent, has objected the appointment of
the Arbitrator on the following grounds:
(i) The Application under Section 11 is barred by
limitation, as the claim made therein is a stale claim.
As regards limitation, it is submitted that the stipulated
transfer as claimed in the invocation notice was to take place
th
on 9 February 2018. However, neither party took steps in
terms of Clause 5 as the MoU of 2017 and thus, the notice
th
invoking arbitration dated 28 January 2026 is ex facie barred
by limitation.
It is also stated that the Applicant has filed Civil Suit No. 2335
of 2022 before the Civil Judge, Junior Division Amritsar,
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Punjab against the Respondent and the third party purchaser
in respect of the subject property wherein, the Applicant
claimed therein that the Respondent had only 50% share in
the subject property and that the Respondent could not
transfer the same to the third party. It is submitted that the
th
Suit is filed on 29 July 2022 and the notice invoking
th
arbitration under Section 21 is dated 28 January 2026 and
thus is beyond three years and barred by limitation.
(ii) There is abandonment of the MoU of 2017 and the
arbitration clause therein for the following reasons:
The Applicant, having filed the aforesaid Civil Suit in respect
of the same subject matter, has abandoned the arbitration
remedy in the MoU of 2017. It is also submitted that in terms
of the High Court (Original Side) Rules, proceedings can also
be filed under the Arbitration and Conciliation Act for relief
against the third parties. It is further submitted that the afore-
noted Civil Suit No.2355 of 2022 was withdrawn, in view of
the statement made by the Respondent that the Respondent
would not alienate specific portion of the subject property. He
submits that once the Suit is withdrawn without liberty to file
an arbitration application, subsequent arbitration application
under Section 11 would be barred under Order XXIII, Rule 1
of the Code of Civil Procedure.
It is also stated that the Applicant has also filed an application
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under Section 111 of the Punjab Land Revenue Code before
the Tahsildar, Dist. Amritsar, for partition of its 50% undivided
share in the subject property by meets and bound, which runs
counter to the claim in arbitration application.
6.
It is also submitted that the agreement was destroyed
and there are witnesses to that effect. As such, the arbitration
agreement was abandoned and once there is a specific stand
taken by the Respondent that the arbitration agreement is
destroyed and does not exist, it was obligatory on the part of
the Applicant to produce the original MoU of 2017 or the
certified copy in terms of Rule 8.3.3 of the High Court
(Original Side) Rules. In the instant case, neither the original
MoU of 2017 nor its duly certified copy is provided. As such,
in absence of the original document or its certified copy, this
Court cannot render a finding on the existence of the MoU of
2017 and an arbitration clause therein and as such, the
Application be dismissed.
7.
The learned counsel for the Respondent relies upon the
following judgment/orders:
1
i) Rajiv Gaddh Vs. Subodh Parkash.
ii) Elfit Arabia and Anr. Vs. Concept Hotel Barons Ltd. and
2
Ors.
3
iii) Food Corporation of India Vs. Sreekanth Transport.
1
2026 SCC Online SC 507
2
2024 SCC Online SC 1739
3
(1999) 4 SCC 491
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iv) Bharti Televentures Ltd. Vs. DSS Enterprises Pvt. Ltd.
4
and Ors.
5
v) Krishna Sarma Vs. Ramesh Kumar Joshi and Ors.
vi) Beena Thomas W/o Saji Mathew, Vadakkedathu House,
6
Thudangadu P.O., Muttam Vs. Smitha Jody.
7
vii) E. D. Enterprises Pvt. Ltd. Vs. Kalser Begum and Anr.
8.
In response to the submissions made by the Respondent
objecting to the arbitration application, Mr. Cama submits that
the role of this Court is limited to ascertain the existence of
the arbitration clause in the agreement. He also submits that
the arbitration agreement is not disputed by the Respondent
in the response to the notice under Section 21 of the
Arbitration Act and the original MoU of 2017 is not with the
Applicant. Once the agreement itself is not disputed and only
the subsequent conduct of destruction of the agreement is put
up as a defence, the same has to be adjudicated by the
Arbitral Tribunal and not by this Court. He further submits
that even as regards the limitation in filing the application
under Section 11 is concerned, the learned counsel submits
that it has to be adjudicated by the Arbitral Tribunal in terms
of the law laid down in SBI General Insurance Company Ltd.
8
Vs. Krish Spinning. He submits that the law in In Re:
4 2005 SCC Online Del 862
5 2006 SCC OnLine AP 173
6
2018 SCC OnLine Ker 1631
7
2022 SCC OnLine Cal 4428
8
(2024) 12 SCC1
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Interplay Between Arbitration Agreement under The
Arbitration and Conciliation Act, 1996 and The Indian Stamp
9
Act, 1899 , the Seven Judges Bench of the Supreme Court has
held that in exercise of power under Section 11, this Court has
to only look at the existence of the arbitration agreement and
leave everything else to the determination of the arbitral
tribunal.
9.
In support of his submissions, he relies upon the
following judgments/Orders:
(i) In Re: Interplay between Arbitration Agreements under
The Arbitration and Conciliation Act 1996 and The Indian
Stamp Act 1899. (supra)
(ii) SBI General Insurance Company Ltd. (supra)
(iii) Rajuram Sawaji Purohit Vs. The Shandar Interior Private
10
Limited.
11
(iv) Tata Capital Ltd. Vs. Priyanka Communications.
12
(v) Priyanka Communications Vs. Tata Capital.
13
(vi) Sukanya Holdings (P) Ltd. Vs. Jayesh H. Pandya.
(vii) Motilal Oswal Financial Services Ltd. Vs. Santosh
14
Cordeiro.
9
(2024) 6 SCC 1
10 2025 SCC OnLine Bom 3906
11 2024 SCC OnLine Bom 3306
12
Supreme Court order dt 13/5/2025 in SLP no. 27566 of 2024
13
(2003) 5 SCC 531
14
2026 SCC OnLine SC 6
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15
(viii) Aditya Birla Finance Ltd. Vs. Paul Packaging Pvt. Ltd.
16
(ix) HPCL Bio-Fuels Vs. Shahaji Bhad.
Analysis:
10.
The scope of judiciary interference under the 1996 Act
has undergone a significant change after the judgment of the
Supreme Court in the case of Interplay (supra) and it has
been explained further by a Three Judge Bench Judgment in
the case of SBI General Insurance Company Ltd. (supra). The
relevant paragraphs of the judgment in SBI General Insurance
Company Ltd. (supra) dealing with the scope of enquiry
including on an issue of limiation in an application under
Section 11 is noted as under:
“113. The scope of examination under Section 11(6-A) is
confined to the existence of an arbitration agreement on the
basis of Section 7. The examination of validity of the
arbitration agreement is also limited to the requirement of
formal validity such as the requirement that the agreement
should be in writing.
117. In view of the observations made by this Court in
Interplay Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re, it is clear
that the scope of enquiry at the stage of appointment of
arbitrator is limited to the scrutiny of prima facie existence of
the arbitration agreement, and nothing else. For this reason,
we find it difficult to hold that the observations made in
Vidya Drolia and adopted in NTPC Ltd. v. SPML Infra Ltd.
15
2024 SCC OnLine Bom 3682
16
2024 SCC OnLine SC 3190
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that the jurisdiction of the Referral Court when dealing with
the issue of "accord and satisfaction" under Section 11
extends to weeding out ex facie non-arbitrable and frivolous
disputes would continue to apply despite the subsequent
decision in Interplay Between Arbitration Agreements under
the Arbitration Act, 1996 & the Stamp Act, 1899, In re.
131. On the first issue, it was observed by us that the
Limitation Act, 1963 is applicable to the applications filed
under Section 11(6) of the 1996 Act. Further, we also held
that it is the duty of the Referral Court to examine that the
application under Section 11(6) of the 1996 Act is not barred
by period of limitation as prescribed under Article 137 of the
Limitation Act, 1963 i.e. 3 years from the date when the right
to apply accrues in favour of the applicant. To determine as to
when the right to apply would accrue, we had observed in
para 57 of the said decision that: (Arif Azim case , SCC p.
340)
130. In Arif Azim, while deciding an application for
appointment of arbitrator under Section 11(6) of the 1996
Act, two issues had arisen for our consideration:
130.1. (i) Whether the Limitation Act, 1963 is applicable to
an application for appointment of arbitrator under Section
11(6) of the Arbitration and Conciliation Act, 1996? If yes,
whether the petition filed by M/s Arif Azim was barred by
limitation?
130.2. (ii) Whether the Court may decline to make a
reference under Section 11 of the 1996 Act where the claims
are ex facie and hopelessly time-barred?
131. On the first issue, it was observed by us that the
Limitation Act, 1963 is applicable to the applications filed
under Section 11(6) of the 1996 Act. Further, we also held
that it is the duty of the Referral Court to examine that the
application under Section 11(6) of the 1996 Act is not barred
by period of limitation as prescribed under Article 137 of the
Limitation Act, 1963 i.e. 3 years from the date when the right
to apply accrues in favour of the applicant. To determine as to
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when the right to apply would accrue, we had observed in
para 57 of the said decision that: (Arif Azim case, SCC p. 340)
"57. the limitation period for filing a petition under
Section 11 (6) of the 1996 Act can only commence once a
valid notice invoking arbitration has been sent by the
applicant to the other party, and there has been a failure or
refusal on the part of that other party in complying with
the requirements mentioned in such notice."
132. Insofar as the first issue is concerned, we are of the
opinion that the observations made by us in Arif Azim do not
require any clarification and should be construed as explained
therein.
133. On the second issue it was observed by us in para 68 of
Arif Azim case that the Referral Courts, while exercising their
powers under Section 11 of the 1996 Act, are under a duty to
"prima facie examine and reject non-arbitrable or dead
claims, so as to protect the other party from being drawn into
a time-consuming and costly arbitration process".
134. Our findings on both the aforesaid issues have been
summarised in para 92 of the said decision thus: (Arif Azim
case, SCC p. 357)
"92. Thus, from an exhaustive analysis of the position
of law on the issues, we are of the view that while
considering the issue of limitation in relation to a petition
under Section 11(6) of the 1996 Act, the courts should
satisfy themselves on two aspects by employing a two-
pronged test first, whether the petition under Section
11(6) of the 1996 Act is barred by limitation; and secondly,
whether the claims sought to be arbitrated are ex facie
dead claims and are thus barred by limitation on the date
of commencement of arbitration proceedings. If either of
these issues are answered against the party seeking referral
of disputes to arbitration, the court may refuse to appoint
an Arbitral Tribunal."
135. Insofar as our observations on the second issue are
concerned, we clarify that the same were made in light of the
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observations made by this Court in many of its previous
decisions, more particularly in Vidya Drolia and NTPC Ltd. v.
SPML Infra Ltd. However, in the case at hand, as is evident
from the discussion in the preceding parts of this judgment,
we have had the benefit of reconsidering certain aspects of
the two decisions referred to above in the light of the
pertinent observations made by a seven-Judge Bench of this
Court in Interplay Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re.
136. Thus, we clarify that while determining the issue of
limitation in exercise of the powers under Section 11(6) of
the 1996 Act, the Referral Court should limit its enquiry to
examining whether Section 11 (6) application has been filed
within the period of limitation of three years or not. The date
of commencement of limitation period for this purpose shall
have to be construed as per the decision in Arif Azim. As a
natural corollary, it is further clarified that the Referral
Courts, at the stage of deciding an application for
appointment of arbitrator, must not conduct an intricate
evidentiary enquiry into the question whether the claims
raised by the applicant are time-barred and should leave that
question for determination by the arbitrator. Such an
approach gives true meaning to the legislative intention
underlying Section 11(6-A) of the Act, and also to the view
taken in Interplay Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re”
11.
The Supreme Court in the case of Interplay (supra) has
held that the scope of enquiry at the stage of appointment of
Arbitrator is limited to scrutiny of prima facie existence of the
arbitration agreement and nothing else. Thus, in SBI General
Insurance Company Ltd. (supra), the Supreme Court held that
the observations in the case Vidya Drolia Vs. Durga Trading
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17 18
Corpn. and adopted in NTPC Ltd. v. SPML Infra Ltd. that
the jurisdiction of the Referral Court when dealing with the
issue of “accord and satisfaction” under Section 11 extends to
weeding out ex facie non-arbitrable and frivolous disputes
would not continue to apply despite the subsequent decision.
Tests like “eye of the needle” and “ex facie meritless”,
although try to minimise the extent of judicial interference,
yet the Referral Court to examine contested facts and
appreciate prima facie evidence (however limited the scope of
enquiry may be) and thus are not in conformity with the
principles of modern arbitration which place autonomy and
judicial non-interference on the highest pedestal.
12.
The Supreme Court while considering the issue of
limitation in SBI General Insurance Company Ltd. (supra) has
clarified that the Referral Court should limit its enquiry to
examining whether Section 11(6) application has been filed
within the period of limitation of three years or not. The date
of commencement of limitation period for this purpose shall
have to be construed as per the decision in Arif Azim Co. LTD
19
Vs. Aptech Ltd. In Arif Azim (supra), the date of
commencement of limitation period for filing a petition under
Section 11(6) of the 1996 Act can only commence once a
valid notice invoking arbitration has been sent by the
17
(2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549
18
(2023) 9 SCC 385 : (2023) 4 SCC (Civ) 342
19
(2024) 5 SCC 313 : (2024) 3 SCC (Civ) 358 : 2024 INSC 155
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Applicant to the other party and there has been a failure or
refusal on part of that other party in complying with the
requirements mentioned in such notice. Thus, the Supreme
Court has observed that only the limitation period in filing
application under Section 11(6) can be examined by the
Referral Court in an application under Section 11 i.e. from the
date of notice under Section 21 till the filing of the
application. As regard the claim in the arbitration application
is concerned, the observations in Vidya Drolia (supra) and
NTPC Ltd. (supra) for weeding out non-arbitrable and
frivolous dispute and for that purpose deciding whether an ex
facie claim is barred by limitation is not available to the
Referral Court under Section 11 of the Arbitration Act.
13.
Thus, the issue of limitation as regards the claim made
in the arbitration is concerned, the same cannot be inquired
into by the Referral Court while considering the application
under Section 11(6). Limitation period for claim made under
arbitration stops on service of notice under Section 21 of the
Act on the Respondent. Section 11 application is required to
be filed within 3 years of process under section 21. The
reference court can only examine limitation for filing
application under section 11(6) as within of three years from
the serivce of notice under section 21. The arbitral claim being
ex-facie barred by limitation cannot be examined by the
reference court.
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14.
Coming to the next issue raised that the MoU of 2017
along with the arbitral clause therein stands abandoned by the
filing of the Civil Suit on the same subject matter for which
relief could be obtained in the arbitral proceedings and that
the application under Section 11(6) of the Arbitration Act is
also barred in view of the withdrawal of the Suit without
liberty to file the Section 11 application. In the case of
Interplay (supra), the Seven-Judge Bench of the Supreme
Court examined the scope of enquiry of the Referral Courts
under Section 11(6) of the Arbitration Act at paragraph nos.
156, 158, 165, 166, 219 and 220 has observed as under:
“156. The effect and impact of the 2015 Amendment Act was
subsequently clarified by this Court. In Duro Felguera, S.A. v.
Gangavaram Port Ltd., Kurien Joseph, J. noted that the
intention of the legislature in incorporating Section 11(6-A)
was to limit the scope of the Referral Court's jurisdiction to
only one aspect - the existence of an arbitration agreement.
To determine the existence of an arbitration agreement, the
Court only needs to examine whether the underlying contract
contains a clause which provides for arbitration pertaining to
the disputes which have arisen between the parties to the
agreement. This Court further held that Section 11(6-A)
incorporates the principle of minimal judicial intervention:
(SCC p. 765, para 59)
"59. The scope of the power under Section 11(6) of
the 1996 Act was considerably wide in view of the
decisions in SBP & Co. and Boghara Polyfab. This position
continued till the amendment brought about in 2015. After
the amendment, all that the Courts need to see is whether
an arbitration agreement exists-nothing more, nothing less.
The legislative policy and purpose is essentially to
minimise the Court's intervention at the stage of
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appointing the arbitrator and this intention as incorporated
in Section 11(6-A) ought to be respected."
158. In Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, a
three-Judge Bench of this Court affirmed the reasoning in
Duro Felguera by observing that the examination under
Section 11(6-A) is "confined to the examination of the
existence of an arbitration agreement and is to be understood
in the narrow sense". Moreover, it held that the position of
law prior to the 2015 Amendment Act, as set forth by the
decisions of this Court in Patel Engg. and Boghara Polyfab,
has been legislatively overruled. Thus, this Court gave effect
to the intention of the legislature in minimising the role of the
Courts at the pre-arbitral stage to the bare minimum.
165. The legislature confined the scope of reference under
Section 11(6-A) to the examination of the existence of an
arbitration agreement. The use of the term "examination" in
itself connotes that the scope of the power is limited to a
prima facie determination. Since the Arbitration Act is a self-
contained code, the requirement of "existence" of an
arbitration agreement draws effect from Section 7 of the
Arbitration Act. In Duro Felguera, this Court held that the
Referral Courts only need to consider one aspect to determine
the existence of an arbitration agreement - whether the
underlying contract contains an arbitration agreement which
provides for arbitration pertaining to the disputes which have
arisen between the parties to the agreement. Therefore, the
scope of examination under Section 11(6-A) should be
confined to the existence of an arbitration agreement on the
basis of Section 7. Similarly, the validity of an arbitration
agreement, in view of Section 7, should be restricted to the
requirement of formal validity such as the requirement that
the agreement be in writing. This interpretation also gives
true effect to the doctrine of competence-competence by
leaving the issue of substantive existence and validity of an
arbitration agreement to be decided by Arbitral Tribunal
under Section 16. We accordingly clarify the position of law
laid down in Vidya Drolia in the context of Section 8 and
Section 11 of the Arbitration Act.
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166. The burden of proving the existence of arbitration
agreement generally lies on the party seeking to rely on such
agreement. In jurisdictions such as India, which accept the
doctrine of competence-competence, only prima facie proof of
the existence of an arbitration agreement must be adduced
before the Referral Court. The Referral Court is not the
appropriate forum to conduct a mini-trial by allowing the
parties to adduce the evidence in regard to the existence or
validity of an arbitration agreement. The determination of the
existence and validity of an arbitration agreement on the
basis of evidence ought to be left to the Arbitral Tribunal. This
position of law can also be gauged from the plain language of
the statute.
219. The Statement of Objects and Reasons of the 2015
Amendment Act are as follows:
"6. (iii) an application for appointment of an
arbitrator shall be disposed of by the High Court or
Supreme Court, as the case may be, as expeditiously as
possible and an endeavour should be made to dispose of
the matter within a period of sixty days.
(iv) to provide that while considering any application for
appointment of arbitrator, the High Court or the Supreme
Court shall examine the existence of a prima facie
arbitration agreement and not other issues."
220. The above extract indicates that the Supreme Court or
High Court at the stage of the appointment of an arbitrator
shall "examine the existence of a prima facie arbitration
agreement and not other issues". These other issues not only
pertain to the validity of the arbitration agreement, but also
include any other issues which are a consequence of
unnecessary judicial interference in the arbitration
proceedings. Accordingly, the "other issues" also include
examination and impounding of an unstamped instrument by
the Referral Court at the Section 8 or Section 11 stage. The
process of examination, impounding, and dealing with an
unstamped instrument under the Stamp Act is not a time-
bound process, and therefore does not align with the stated
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goal of the Arbitration Act to ensure expeditious and time-
bound appointment of arbitrators. Therefore, even though the
Law Commission of India Report or the Statement of Objects
and Reasons of the 2015 Amendment Act do not specifically
refer to SMS Tea Estates, it nevertheless does not make any
difference to the position of law as has been set out above.”
15.
The Seven-Judge Bench in the case of Interplay (supra)
has observed that Section 11(6) had a long chequered history
and that in Vidya Drolia (supra), it is noted that Section 11
has undergone another amendment vide Act 33 of 2019 with
effect from 9-8-2019. However, Vidya Drolia (supra)
proceeded on the presumption that Section 11(6-A) was
effectively omitted from the statute books by the 2019
Amendment Act. The Supreme Court in the Seven-Judge
Bench in Interplay (supra) observed that Vidya Drolia (supra)
is erroneous because the omission of Section 11(6-A) has not
been notified and, therefore, the said provision continues to
remain in full force.
16.
The 2015 Amendment Act has laid down different
parameters for judicial review under Section 8 and Section 11.
Where Section 8 requires the referral court to look into the
prima facie existence of a valid arbitration agreement, Section
11 confines the court’s jurisdiction to the examination of the
existence of an arbitration agreement. Although the object
and purpose behind both Sections 8 and 11 is to compel
parties to abide by their contractual understanding, the scope
of power of the referral courts under the said provisions is
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intended to be different. Thus, 2015 Amendment Act has
legislatively overruled the dictum of SBP and Co. Vs. Patel
20
Engg. Ltd., wherein it was held that Sections 8 and 11 are
complementary in nature. The legislature confined the scope
of reference under Section 11(6-A) to the examination of the
existence of an arbitration agreement. The use of the term
“examination” in itself connotes that the scope of the power is
limited to a prima facie determination. Since the Arbitration
Act is a self-contained code, the requirement of “existence” of
an arbitration agreement draws effect from Section 7 of the
Arbitration Act. In Duro Felguera, S. A. Vs. Gangavaram Port
21
Ltd., the Supreme Court held that the Referral Courts only
need to consider one aspect to determine the existence of an
arbitration agreement – whether the underlying contract
contains an arbitration agreement which provides for
arbitration pertaining to the disputes which have arisen
between the parties to the agreement. Therefore, the scope of
examination under Section 11(6-A) should be confined to the
existence of an arbitration agreement on the basis of
Section 7.
17.
The burden of proving the existence of arbitration
agreement generally lies on the party seeking to rely on such
agreement. For the doctrine of competence-competence, only
20
(2005) 8 SCC 618
21
(2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764
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prima facie proof of the existence of an arbitration agreement
must be adduced before the Referral Court. The Referral Court
is not the appropriate forum to conduct a mini-trial by
allowing the parties to adduce the evidence in regard to the
existence or validity of an arbitration agreement. The scope of
interference by the Court in proceedings under Section 11
prior to the judgment of Interplay (supra) was relatively wide.
However, the judgment of the Supreme Court in Interplay
(supra) has narrowed it down.
18.
Following the judgments of the Supreme Court, this
Court in the case of Tata Capital Ltd. (supra) has observed
that the objections raised by the Respondents, (i) that the
disputes raised by the Applicant are not non-arbitrable as they
are barred by the provisions of the SARFAESI Act and the
RDDB Act, (ii) that the Applicant had waived its right to
arbitration by filing a Summary Suit in this Court and (iii)
that allowing of this application would lead to multiplicity of
proceedings, are not objections regarding the existence of an
arbitration agreement, on the basis of Section 7 of the Act nor
are they objections regarding the validity of the arbitration
agreement. In view of Section 7 of the Act, objections as to
validity should be restricted to the requirements of formal
validity such as the requirement that the agreement be in
writing.
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19.
Considering the judgment of Interplay (supra) and Tata
Capital Ltd. (supra), this Court finds it difficult to enter into
the question of abandonment of the arbitration clause based
on the objection taken by the Respondent that the Applicant
had filed a Civil Suit against the Respondent and another
third party and the same amounts to waiver of the arbitration
clause. This enquiry could travel beyond the power of the
Reference Court under Section 11 as has been held in
Interplay (supra).
19-A: There is no dispute raised about the existence of
arbitral clause in MoU of 2017, the objection is raised that the
document i.e. MoU of 2017 was destroyed in presence of
witness, indicating that the MoU of 2017 along with its
arbitral clause is not acted upon. However, once the MoU of
2017 with its arbitral clause is admitted, the destruction
thereof is matter for the arbitral tribunal to be decided on
evidence.
20.
As regard the reliance made in the judgment of Rajiv
Gaddh (supre), the Supreme Court therein observed that the
jurisdiction under Section 11 of the Act is primarily confined
to determining existence of an arbitration agreement. The
issue of res judicate does not arise in a proceeding under
Section 11 proceedings. Order 23 Rule 1 of the Code provides
that if the plaintiff either abandons the Suit or part of the
claim or withdraws the same without leave of the Court, then
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he is precluded from instituting a fresh Suit in respect of such
subject matter or such part of the claim. The plaintiff on
abandoning a suit or part of the claim or withdrawing the
same without leave of the court, also becomes liable to pay
such costs. It is observed that the Supreme Court in HPCL Bio-
Fuels Ltd., (supra) dealt with the issue, whether a fresh
application under Section 11(6) of the Act would be
maintainable, when no liberty to file a fresh application was
granted at the time of withdrawal of the first application
under Section 11(6) of the Act and has observed that the
principles of Order 23 Rule 1 of the Code prohibiting the
institution of fresh proceeding on the same cause of action
without seeking leave of the court to file a fresh application,
would apply to proceeding under Section 11(6) of the Act. It
further held that in the absence of any liberty at the time of
withdrawal of the first application, the fresh application under
Section 11 of the Act is not maintainable.
21.
The law in the case of Rajiv Gaddh (supra) relates to
filing of a subsequent Section 11 application, when the first
application under Section 11 is withdrawn without liberty to
file a fresh application and it does not deal with a situation of
withdrawal of the Suit and subsequent filing of application
under Section 11 of the 1996 Act. The judgment in the case of
Rajiv Gaddh (supra), has no application to the facts of the
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present case. This issue can also be raised before the arbitral
tribunal, for determination.
22.
Considering the same, this Court would allow the
present Arbitration Application and pass the following order:
O R D E R
(A) Mr. Aseem Naphade, an Advocate of this Court is
appointed as the sole Arbitrator to adjudicate upon the
disputes and differences between the parties arising out of
and in connection with the Agreement referred to above. The
contact details of the Arbitrator are as under :-
rd
Address : Office No.302, 3 Floor, Vardhaman
Chambers, Cawasji Patel Street, Fort,
Mumbai – 400001.
Mobile No. : 9920030695
Email ID : [email protected]
(B) A copy of this order be communicated to the learned
sole Arbitrator by the Advocates for the Applicant within a
period of 1 week from the date of uploading of this order.
The Applicant shall provide the contact and communication
particulars of the parties to the Arbitral Tribunal along with a
copy of this order.
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(C) Seat of the arbitration would be governed by the
provisions of the agreement executed between the parties.
(D) Learned sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read
with Section 12(1) of the Act to the Advocates for the
Applicant so as to enable them to file the same in the Registry
of this Court. The Registry of this Court shall retain the said
Statement on the file of this Application and a copy of the
same shall be furnished by the Advocates for the Applicant to
the Respondent.
(E) The parties shall appear before the learned sole
Arbitrator on such date and at such place as indicated by him,
to obtain appropriate direction with regard to conduct of the
arbitration including fixing a schedule for pleadings,
examination of witnesses, if any, schedule of hearings etc. At
such meeting, the parties shall provide a valid and functional
email address along with mobile and landline numbers, if any,
of the respective Advocates of the parties to the Arbitral
Tribunal. Communications to such email addresses shall
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constitute valid service of correspondence in connection with
the arbitration.
(F) All arbitral costs and fees of the Arbitral Tribunal shall
be borne by the parties equally in the first instance and shall
be subject to any final Award that may be passed by the
Tribunal in relation to costs.
23.
All contentions of the parties are expressly kept open to
be raised before the Arbitrator.
24.
With the above directions, the Arbitration Application
stands disposed of accordingly.
(ARUN R. PEDNEKER, J.)
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