INDIAN OIL CORPORATION LIMITED vs. NCC LIMITED

// 1 // REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 341 OF 2022 (@ SLP (C) No.13161/2019) Indian Oil Corporation Limited …Appellant(s) Versus NCC Limited      …Respondent(s) With  CIVIL APPEAL NO. 342 OF 2022 (@ SLP (C) No.13408/2019) CIVIL APPEAL NO. 344 OF 2022 (@ SLP (C) No.13815/2019) CIVIL APPEAL NO. 343 OF 2022 (@ SLP (C) No.13813/2019) CIVIL APPEAL NO. 345 OF 2022 (@ SLP (C) No.13816/2019) J U D G M E N T M.R. SHAH, J. 1. As   common   questions   of   law   and   facts   arise   in   this group of appeals and as such between the same parties and with respect to similar contracts / agreements, all Signature Not Verified these appeals are decided and disposed of together by Digitally signed by R Natarajan Date: 2022.07.20 16:37:26 IST Reason: this common judgment and order.  // 2 // 2. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment and orders passed by the High Court of Delhi, New Delhi in respect to Arbitration Petitions by which, in   exercise   of   powers   under   Section   11(6)   of   the Arbitration   and   Conciliation   Act,   1996   (hereinafter referred   to   as   “Arbitration   Act”),   the   High   Court   has allowed the said petitions and has appointed the learned Arbitrator by referring the dispute between the parties for arbitration, the Indian Oil Corporation Limited has preferred the present appeals.  3. For the sake of convenience, Civil Appeal arising out of Special Leave Petition No.13161/2019 arising out of the order passed by the High Court in Arbitration Petition No.115/2018 is treated as the lead matter.  4. The facts leading to the present appeal in a nut­shell are as under:  4.1. That, the appellant, Indian Oil Corporation Limited (hereinafter referred to as “IOCL”) floated a tender in   respect   of   the   works   described   as   “Civil, Structural & Associated UG piping works of VGO­ HDT, DHDT & HCDS Units (EPCM­2) for Paradip Refinery   Project”.   The   respondent   herein   –   NCC Ltd.   (hereinafter   referred   to   as   “NCCL”)   was declared the successful bidder. After issuance of the   Letter   of   Acceptance   dated   17.03.2010,   a // 3 // formal   agreement   was   executed   between   the parties dated 28.04.2010. The relevant clauses of the Agreement which may have a bearing on the issues   involved   in   the   present   appeals   are   as under:  “1.21.0.0 “Notified   Claim”   shall   mean   a   claim   of   the CONTRACTOR notified in accordance with the provisions of Clause 6.6.1.0 hereof. xxx      xxx      xxx CLAIMS BY THE CONTRACTOR 6.6.1.0 Should the CONTRACTOR consider that he is entitled to any extra payment or compensation in  respect  of  the  works over  and above the amounts   due   in   terms   of   the   Contract   as specified in Clause 6.3.1.0 hereof or  should the CONTRACTOR dispute the validity of any deductions made or threatened by the OWNER from   any   Running   Account   Bills,   the CONTRACTOR   shall   forthwith   give   notice   in writing   of   his   claim   in   this   behalf   to   the Engineer­in­Charge   and   the   Site   Engineer within 10 (ten) days from the date of the issue of orders or instructions relative to any works for   which   the   CONTRACTOR   claims   such additional payment or compensation or of the happening   of   other   event   upon   which   the CONTRACTOR   bases   such   claim,   and   such notice shall give full particulars of the nature of such claim, grounds on which it is based, and the amount claimed. The OWNER shall not anywise be liable in respect of any claim by  the  CONTRACTOR  unless  notice  of  such claim   shall   have   been   given   by   the CONTRACTOR to the Engineer­in­Charge and the Site Engineer in the manner and within the   time   aforesaid   and   the   CONTRACTOR SHALL be deemed to have waived any and all claims   and   all   his   rights   in   respect   of   any claim not notified to the Engineer­in­Charge and the Site Engineer in writing in the manner and within the time aforesaid.  // 4 // 6.6.2.0 The   Engineer­in­Charge   and/or   the   Site Engineer shall be under no obligation to reply to any notice of claim given or claim made by the   CONTRACTOR   within   the   provisions aforesaid or otherwise or to reject the same and no omission or failure on the part of the Engineer­in­Charge or Site Engineer to reject any   claim   made   or   notified   by   the CONTRACTOR   or   delay   in  dealing   therewith shall be deemed to be an admission by the OWNER of the validity of such claim or waiver by the OWNER of any of its rights in respect thereof, with the intent that all such claims otherwise valid within the provisions of Clause 6.6.1.0 read with Clauses 6.6.3.0 and 6.6.3.1 shall be dealt with/considered by the OWNER at the time of submission of the Final Bill.  6.6.3.0 Any claims of the CONTRACTOR notified in ac­ cordance with the provision of Clause 6.6.1.0 hereof as shall remain at the time of prepara­ tion of Final Bill by the CONTRACTOR shall be separately included in the Final Bill prepared by the CONTRACTOR in the form of a State­ ment of Claims attached thereto, giving partic­ ulars of the nature of the claim, grounds on which it is based, and the amount claimed and shall   be   supported   by   a   copy(ies)   of   the notice(s) sent in respect thereof by the CON­ TRACTOR to the Engineer­in­Charge and Site Engineer under Clause 6.6.1.0 hereof. In so far as such claim shall in any manner or par­ ticular be at variance with the claim notified by the CONTRACTOR within the provision of Clause 6.6.1.0 hereof, it shall be deemed to be a claim different from the notified claim with consequence   in   respect   thereof   indicated   in Clause 6.6.1.0 hereof, and with consequences in respect of the notified claim as indicated in Clause 6.6.3.1 hereof. 6.6.3.1 The OWNER shall not anywise be liable in re­ spect of any notified claim not specifically re­ flected in the Final Bill in accordance with the provisions  of Clause 6.6.3.0  hereof and any and all notified claims not specifically reflected and included in the Final Bill in accordance // 5 // with the provisions of Clause 6.6.3.0 hereof shall be deemed to have been waived by the CONTRACTOR. Further the OWNER shall have no liability in respect thereof and the CON­ TRACTOR shall not be entitled to raise or in­ clude in the Final Bill any claim(s) other than a notified claim conforming in all respects and in accordance with the provisions of Clause 6.6.3.0 hereof. 6.6.4.0 No claim(s) shall on any account be made by the CONTRACTOR after the Final Bill, with the intent   the   Final   Bill   prepared   by   the   CON­ TRACTOR   shall   reflect   any   and   all   notified claims   whatsoever   of   the   CONTRACTOR against the OWNER arising out of or in con­ nection with the Contract or work performed by the CONTRACTOR thereunder or in relation thereto, and the CONTRACTOR shall notwith­ standing any enabling provision under any law or Contract and notwithstanding any right of claim in quantum meruit that the CONTRAC­ TOR could have in respect thereof, be deemed to have waived any and all such claims not in­ cluded in the Final Bill and to have absolved and discharged the OWNER from and against the same, even if in not including the same as aforesaid, the CONTRACTOR shall have acted under a mistake of law or fact. 6.6.5.0 Notwithstanding the existence of any claim by the CONTRACTOR in terms hereof or other­ wise, the CONTRACTOR shall continue and be bound to continue and perform the works to completion   in   all   respects   according   to   the Contract (unless the Contract or works be pri­ orly   determined   by   the   OWNER   in   terms hereof) and shall remain liable and bound in all respects under the Contract. 6.6.6.0 The payment of any sum on account to the CONTRACTOR during the performance of any work or item of work in respect of which a claim has been notified by the CONTRACTOR in terms of Clause 6.6.1.0 hereof or the mak­ ing or negotiation of any interim arrangements in respect of the performance of such work or item   of   work   by   the   OWNER,   shall   not   be // 6 // deemed   to   be   an   acceptance   of   the   related claim by the OWNER, or any part or portion thereof with the intent that any such payment shall constitute merely an interim facility or interim assistance to the CONTRACTOR, and not an obligation upon the OWNER. 6.7.0.0 DISCHARGE OF OWNER’S LIABILITY 6.7.1.0 The acceptance by the CONTRACTOR of any amount paid by the OWNER to the CONTRAC­ TOR in respect of the final dues of the CON­ TRACTOR under the Final Bill upon condition that the said payment is being made in full and final  settlement   of  all  said  dues  to the CONTRACTOR shall, without prejudice to the notified claims of the CONTRACTOR included in the Final Bill in accordance with the provi­ sions under Clause 6.6.3.0 hereof and associ­ ated provisions thereunder, be deemed to be in full and final satisfaction of all such dues to the CONTRACTOR notwithstanding any quali­ fying remarks, protest or condition imposed or purported to be imposed by the CONTRACTOR relative to  the  acceptance  of  such  payment, with the intent that upon acceptance by the CONTRACTOR of any payment made as afore­ said,   the   Contract   (including   the   arbitration clause)   shall,   subject   to   the   provisions   of Clause 6.8.2.0 hereof, stand discharged and extinguished except in respect of the notified claims of the CONTRACTOR included in the Final Bill and except in respect of the CON­ TRACTOR's entitlement to receive the unad­ justed portion of the Security Deposit in accor­ dance   with   the   provisions   of   Clause   6.8.3.0 hereof on successful completion of the defect liability period. 6.7.2.0 The acceptance by the CONTRACTOR of any amount paid by the OWNER to the CONTRAC­ TOR in respect of the notified claims of the CONTRACTOR included in the Final Bill in ac­ cordance with the provisions of Clause 6.6.3.0 hereof and associated provisions thereunder, upon the condition that such payment is being made  in   full  and   final   settlement  of  all  the claims of the CONTRACTOR shall, subject to the   provisions   of   Clause   6.7.3.0   hereof,   be deemed to be in full and final satisfaction of all // 7 // claims of the CONTRACTOR notwithstanding any  qualifying  remarks,  protest  or  condition imposed or purported to be imposed by the CONTRACTOR   relative   to   the   acceptance   of such payment with the intent that upon ac­ ceptance   by   the   CONTRACTOR   of   any   pay­ ment made as aforesaid, the Contract (includ­ ing   the   arbitration   clause)   shall   stand   dis­ charged and extinguished insofar as relates to and/or concerns the claims of the CONTRAC­ TOR. 6.7.3.0 Notwithstanding anything provided in Clause 6.7.1.0 and/or Clause 6.7.2.0 hereof the CON­ TRACTOR shall be and remain liable for de­ fects in terms of Clause 5.6.0.0 hereof and for the   indemnity   to   the   OWNER   in   terms   of Clause 6.8.2.0, and shall be and remain enti­ tled to receive the unadjusted balance of the Security Deposit remaining in the hands of the OWNER in terms of Clause 6.8.3.0 hereof. xxx        xxx       xxx 9.0.0.0 ARBITRATION 9.0.1.0 Subject to the provisions of Clauses 6.7.1.0, 6.7.2.0 and 9.0.2.0 hereof, any dispute arising out of a Notified Claim of the CONTRACTOR included in the Final Bill of the CONTRACTOR in accordance with the provisions of Clause 6.6.3.0 hereof, if the CONTRACTOR has not opted   for   the   Alternative   Dispute  Resolution Machinery referred to in Clause 9.1.1.0 hereof, and any dispute arising out of any Claim(s) of the OWNER against the CONTRACTOR shall be referred to the arbitration of a Sole Arbitra­ tor selected in accordance with the provisions of   Clause   9.0.1.1   hereof.   It   is   specifically agreed   that   the   OWNER   may   prefer   its Claim(s)   against   the   CONTRACTOR   as counter­claim(s)   if   a   Notified   Claim   of   the CONTRACTOR   has   been   referred   to   arbitra­ tion. The CONTRACTOR shall not, however, be entitled   to   raise   as   a   set­off   defence   or counter­claim any claim which is not a Noti­ fied Claim included in the CONTRACTOR's Fi­ nal Bill in accordance with the provisions of Clause 6.6.3.0 hereof. // 8 // 9.0.1.1 The   Sole   Arbitrator   referred   to   in   Clause 9.0.1.0 hereof shall be selected by the CON­ TRACTOR out of a panel of 3 (three) persons nominated by the OWNER for the purpose of such selection, and should the CONTRACTOR fail to select an arbitrator within 30 (thirty) days of the panel of names of such nominees being furnished by the OWNER for the pur­ pose, the Sole Arbitrator shall be selected by the OWNER out of the said panel. 9.0.2.0 Any dispute(s) or difference(s) with respect to or concerning or relating to any of the follow­ ing   matters   are   hereby   specifically   excluded from the scope, purview and ambit of this Ar­ bitration   Agreement   with   the   intention   that any dispute or difference with respect to any of the said following matters and/or relating to the Arbitrator's or Arbitral Tribunal's jurisdic­ tion with respect thereto shall not and cannot form the subject­ matter of any reference or submission to arbitration, and the Arbitrator or the Arbitral Tribunal shall have no jurisdic­ tion to entertain the same or to render any de­ cision with respect thereto, and such matter shall be decided by the General Manager prior to the Arbitrator proceeding with or proceeding further with the reference. The said excluded matters are: (i) With respect to or concerning the scope or existence or otherwise of the Arbitration Agree­ ment; (ii) Whether or not a Claim sought to be re­ ferred to arbitration by the CONTRACTOR is a Notified Claim; (iii) Whether or not a Notified Claim is included in the CONTRACTOR's Final Bill in accordance with the provisions of Clause 6.6.3.0 hereof. (iv)   Whether   or   not   the   CONTRACTOR   has opted   for   the   Alternative   Dispute  Resolution Machinery with respect to any Notified Claim included in the CONTRACTOR's Final Bill. // 9 // 9.0.3.0 The   provisions   of   the   Indian   Arbitration   & Conciliation   Act,   1996   and   any   re­ enactment(s)   and/or   modification(s)   thereof and of the Rules framed thereunder shall ap­ ply to arbitration proceedings pursuant hereto subject to the following conditions: (a) The Arbitrator shall give his Award sepa­ rately in respect of each Claim and Counter­ Claim; and (b) The Arbitrator shall not be entitled to re­ view   any   decision,   opinion   or   determination (howsoever expressed) which is stated to be fi­ nal and/or binding on the CONTRACTOR in terms of the Contract Documents.” 4.2. As   per   the   contract   entered   into   between   the parties, the designated date for commencement of the project was the date of issuance of FOA i.e. 03.03.2010,   and   that   the   scheduled   date   of completion   was   02.10.2011.   It   appears   that   the execution of the project was delayed, as a result of which   the   project   was   completed   only   on 28.12.2015.   The  NCCL  was   issued   a  completion certificate   by   the   IOCL   indicating   the   date   of completion of the project as 28.12.2015. In view of the delay in completion of the project beyond the scheduled   date,   the   NCCL   made   a   request   for extension of   time  vide  the   communication dated 23.05.2016. While the EOT requests were pending with the IOCL, the NCCL submitted its final bill dated   05.08.2016   to   the   Engineer­In­Charge appointed under the contract between the parties. // 10 // According to the NCCL, the NCCL in its final bill dated 05.08.2016 made a specific reference to the Notified   Claims.   There   were   correspondences between   the   Engineer­In­Charge   and Thyssenkrupp   Industrial  Solutions   India  (P)  Ltd. (hereinafter   referred   to   as   “TKIS”)   pending settlement   of   the   final   bill   and   the   request   for Extension of Time (EOT). The NCCL responded to the communication dated 01.11.2016 by the TKIS, vide its response dated 02.11.2016. It appears that the NCCL conveyed to TKIS that if its request for EOT   were   considered   favorably   and   if   price adjustment   does   not   exceed   4%,   then,   all   its extra/additional claims including Notified Claims submitted by it through various communications and the final bill should be treated as withdrawn.    4.3. The   TKIS   having   received   the   aforesaid communication   from   the   NCCL,   made   its recommendations   vis­à­vis   the   request   for   EOT made by the NCCL. It appears that thereafter, TKIS in its communication dated 13.01.2017, informed NCCL   that   it   had   approved   EOT   for   the   period between   03.10.2011   to   03.11.2015,   however, without price discount as per Clause 4.4.0.0 of the General   Conditions   of   Contract   (hereinafter referred to as “GCC”) and that for the period falling // 11 // between 04.11.2015 to 28.12.2015 which covered the period of 55 days, it had concluded that the delay was attributable to NCCL. Accordingly, TKIS conveyed to NCCL that for the later period, as per Clause   4.4.2.0   of   the   GCC,   a   price   adjustment discount of 4% would be applicable.  4.4. It   is   the   case   on   behalf   of   NCCL   that   being aggrieved, it wrote to the IOCL on 23.01.2017 to reconsider its decision and accord EOT upto the date of completion i.e. 28.12.2015 without making any adjustment towards price as indicated in the communication dated 13.01.2017.  4.5. That,   thereafter,   the   IOCL   released   a   sum   of Rs.4,53,04,021/­,   the   amount   calculated   as   per the   communication   dated   13.01.2017,   after making due adjustments towards taxes etc.  4.6. It appears that subsequently and after a period of 6&1/2 months (after the settlement of the claim) and after receiving the final bill payment 8 days earlier, on 08.05.2017, vide communication dated 16.05.2017,   NCCL   reneged   on   the   letter   of 02.11.2016   and   alleged   that   it   was   made   to withdraw   its   claim   under   coercion   and   it   had withdrawn   its   Notified   Claims   as   TKIS   vide   its communication   dated   01.11.2016,   had   indicated // 12 // that the review of the final bill and request for EOT would be considered only if it gave up its insistence on its Notified Claims being considered.  4.7. That IOCL sent its response vide communication dated 06.06.2017, wherein it stated that none of the claims mentioned in the final bill were Notified Claims.   4.8. In   the   above   backdrop,   NCCL   invoked   the arbitration clause contained in the Agreement on 01.07.2017.   That,   the   IOCL,   in   accordance   with Clause   9.0.2.0   referred   the   matter   regarding arbitrability   of   NCCL’s   claims   to   the   General Manager on 12.07.2017.  4.9. Vide the communication / letter dated 10.11.2017, the General Manager held that the claims cannot be referred to arbitration and that the Arbitration Agreement  itself   does   not   survive   on  account  of NCCL withdrawing its Notified Claims. The General Manager held that therefore there exist no dispute to be referred to arbitration. 4.10.Thereafter the respondent – NCCL approached the Delhi   High   Court   by   filing   Arbitration   Petition No.115/2018   under   Section   11(6)   of   the Arbitration Act for appointment of sole Arbitrator. The said petition was opposed by the IOCL on a // 13 // number of grounds. However, by overruling all the objections raised on behalf of the appellant – IOCL, by   the   impugned   judgment   and   order,   the   High Court has allowed the said arbitration petition and appointed the sole Arbitrator.  4.11.Impugned judgment and order passed by the High Court   dated   08.02.2019   in   Arbitration   Petition No.115/2018 is the subject matter of present Civil Appeal No.341/2022 (arising out of Special Leave Petition No.13161/2019). 5. With respect to other four contracts between the same parties and with same arbitration clauses, the NCCL’s claims were sent to the General Manager under Clause 9.0.2.0 of the GCC. So far as the Civil Appeal arising out of SLP No.13408/2019 is concerned, the NCCL did not approach   the   General   Manager   but   the   Arbitration Petition filed before the High Court was forwarded by the IOCL   to   the   General   Manager   for   its   determination under   Clause   9.0.2.0   of   the   GCC.   That,   in   all   the remaining   four   cases   (Civil   Appeal   Nos.342/2022   to 345/2022), the General Manager declared that none of the claims were Notified Claims.  6. Thereafter the NCCL approached the High Court by way of   Arbitration   Petition   Nos.115/2018,   356/2018, 116/2018, 407/2018 and 406/2018. By the impugned // 14 // judgment and orders, the High Court has allowed all the respective   applications   under   Section   11(6)   of   the Arbitration Act and by different impugned judgment and orders,   has   appointed   the   sole   Arbitrator.   Impugned judgment and orders passed by the High Court is the subject   matter   of   Civil   Appeal   Nos.341/2022   to 345/2022.  7. Shri   K.K.   Venugopal,   learned   Attorney   General   has appeared on behalf of the appellant – IOCL and Shri Ranjith Kumar, learned Senior Advocate has appeared on behalf of the respondent – NCCL.  8. Shri   K.K.   Venugopal,   learned   Attorney   General appearing   on   behalf   of   the   IOCL   has   vehemently submitted that in the present case both the parties are governed   by   the   terms   of   the   contract   entered   into between the parties viz. the GCC. That in fact, both the parties are governed by the procedure to be followed in case of dispute between the parties, more particularly contained in the GCC and the arbitration clause.  8.1  It is further submitted by the learned Attorney General that party autonomy is the backbone of arbitration and the terms of the contract have to be interpreted in the way the parties wanted and intended them to be. In this regard reliance is placed upon the decision of this Court in the case of   Centrotrade Minerals & Metal Inc. v. // 15 // reported in  Hindustan Copper Ltd.  (2017) 2 SCC 228 (Paras 38­42) . 8.2   It is submitted by the learned Attorney General that there are three categories of contracts which could arise for consideration, which can be summarized as under:  (i) Where no arbitration agreement exists at all. As the arbitration agreement itself is an independent contract and is consensual in nature, it is left to the parties to include   an   arbitration   agreement   in   the   underlying contract, or not to include it. If no arbitration agreement exists in a contract, the only option if a dispute arises for either party is to go by way of a suit;  (ii) An   arbitration   agreement   can   exist   in   the underlying contract or outside the contract,  which is absolute   in   terms.   This   is   the   standard   arbitration clause,   and   would   be   in   the   nature   of   “where   any dispute   arises   between   the   parties   in   relation   to   the interpretation or implementation of this contract, it shall be   referred   to   arbitration   under   the   Arbitration   and Conciliation   Act,   1996...”   This   would   be   an UNRESTRICTED or ABSOLUTE arbitration clause.  In such a case, in the background of Section 11(6­A), no question of the Court declining to refer the matter to arbitration would arise, if it finds that the arbitration // 16 // agreement  exists   and   is   valid.   In  such   a  case,   every dispute   between   the   parties   has   to   be   referred   to arbitration because Section 11(6­A) would mandate this; (iii)  The   third   category   would   be   where   the   parties agree   to   have   an   arbitration   clause   but   also consensually agree that certain specified disputes alone will be the subject of arbitration. This would mean that no   arbitration   clause   exists   in   regard   to   all   other disputes,   and   no   arbitration   clause   would   exist   in regard to the ‘excepted’ or ‘excluded’ disputes. In such a case,   Section   11(6­A)   itself   cannot   be   invoked   as   no arbitration   clause   exists   in   regard   to   these   other disputes.   This   would   be   a   RESTRICTED   arbitration clause.  8.3 It is further submitted by the learned Attorney General that when all the conditions mentioned in the GCC are satisfied and the procedure is followed and only with respect  to the restricted arbitration clauses and  with respect to the Notified Claims only the dispute between the parties can be referred to the arbitration.  8.4 It   is   submitted   that   there   are   umpteen   number   of examples of restricted arbitration clauses. Reliance is placed   on   the   decision   of   this   Court   in   the   case   of United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd.  reported in  (2018)17 SCC 607, // 17 // where the arbitration clause expressly stated that where a claim is made against the insurer and the insurer denies its liability, no reference to arbitration can take place. In support of the above submission, reliance is placed on following decisions of this Court: (1) Vidya Drolia v. Durga Trading Corpn.    [(2021)2 SCC 1, Paras 113­116) (2) Garware Wall Ropes Ltd. vs. Coastal Marine  Constructions & Engg.  [(2019) 9 SCC 209, Paras 28­29) (3) Oriental   Insurance   Co.   Ltd.   v.   Narbheram Power &  Steel (P) Ltd.  [(2018) 6 SCC 534, Paras 10, 23] 8.5 It is submitted by the learned Attorney General that in the   aforesaid   decisions,   this   Court   had   occasion   to consider   the   applicability   of   Section   11(6­A)   and   its impact.  8.6 It is submitted that in the case of Garware (supra), it is observed and held that where the underlying contract including the arbitration clause is not stamped, in such a case, the arbitration clause exists in fact but DOES NOT EXIST IN LAW. That in other words, Section 11(6­ A) will not be a Bar for the Court holding that as the arbitration clause does not cover the particular dispute, Section 11(6­A) will not apply as there is no arbitration // 18 // clause   in   that   regard   and   therefore,   no   reference   to arbitration can be made.  8.7 It is submitted that in the case of Vidya Drolia (supra), this Court had considered various aspects with respect to the restricted arbitration clause.  But in the case of unrestricted clauses, all issues raised by the contracting parties will have to be referred to arbitration, because of Section 11(6­A). However, the instant case is a case of a restricted   arbitration   clause   that   specifically   excludes certain issues from arbitration, as a result of which, no arbitration clause exists for those ‘other’ or ‘excepted’ disputes   and   hence,   the   question   of   referring   those disputes   would   not   arise.   That   in   the   case   of   Vidya Drolia (supra), the Arbitration Agreement itself sets out what is excluded from arbitration. Therefore, it was held that   Section   11(6­A)   would   not   stand   in   the   way   of making a reference.  8.8 It is further submitted by learned Attorney General that in the present case the respondent NCCL received the amount of final bill in full settlement of their claims. That   in  the   present   case   the   arbitration   clause   itself states that where the final bill amount has been received by   the   party,   or   where   a   sum   has   been   received  on account of Notified Claims, the arbitration clause itself stands extinguished. Therefore, the fact that amount of final bill having been received in full settlement cannot // 19 // be   the   subject   matter   of   reference   by   any   specific stipulation in the contract.  8.9 Learned Attorney General has taken us to the relevant clauses of the GCC more particularly Clauses 1.21.0.0, 6.6.0.0,   6.6.1.0,   6.6.2.0,   6.6.3.0,   6.6.3.1,   6.6.4.0, 6.6.5.0,   6.6.6.0,   6.7.0.0,   6.7.1.0,   6.7.2.0,   6.7.3.0, 9.0.0.0,   9.0.1.0,   9.0.1.1,   9.0.2.0   and   9.0.3.0.   It   is contended that as per Clause 9.0.1.0, the only matter to which   a   reference   to   arbitration   can   be   sought   is   a “Notified Claim” included in the final bill and to no other dispute.  That all disputes other  than  Notified  Claims included in the final bill, have to be pursued by way of a suit.   The   expression,   “Notified   Claim”   is   defined   in Clause 1.21.0.0 of the GCC.  8.10 It is urged that only those Notified Claims which are notified in accordance with provisions of Clause 6.6.1.0, can be referred to arbitration.  8.11 It is submitted that the parties are at liberty to provide within   the   contract   a   departmental   machinery   for resolution of certain matters, the determination of which will   be   outside   the   scope   of   arbitration.   That   such departmental machinery, being the will of the parties as embodied in the contract, must be respected and given effect to. In support of the above submissions, reliance is placed on the following decisions of this Court: // 20 // (i) Food Corporation of India v. Sreekanth Transport (1999)4 SCC 491 (Paras 2, 3) (ii) Harsha Constructions v. Union of India  (2014) 9 SCC 246 (Paras 14, 18, 19) (iii) Mitra Guha Builders (India) Company v. Oil and Natural Gas Corporation Ltd. (2020) 3 SCC 222 (Paras 23, 24, 26, 30) 8.12 The learned Attorney General has also relied upon the following decisions of the Delhi High Court and Gauhati High Courts dealing with identical clause in cases where the IOCL was a party and in which the Delhi High Court and Gauhati High Court have expressly interpreted the very Clause 9.0.1.0 and 9.0.2.0. (i) China   Petroleum   Pipeline   Bureau   v.   Indian   Oil Corporation   Ltd.   [ARB.A.   (COMM.)   35/2019, decision dated 10.01.2020] (ii) Srico Projects Pvt. Ltd. v. Indian Oil Foundation [ARB. PET. 276/2016 decided on 09.01.2017 along with order dated 03.07.2017] (iii) Institute  of  Geoinformatics (P) Ltd. v. Indian Oil Corporation Ltd. [ARB. PET. 175/2012 decided on 19.05.2015] (iv) IOT Infrastructure and Energy Service v. Indian Oil Corporation Ltd. [ARB. PET. 334/2014 decided on 12.02.2015] (v) Bongaigaon Refinery v. M/s. Buildworth Pvt. Ltd. // 21 // [Arb.Appeal 10/2006 before Gauhati High Court] 8.13 It is submitted that the Special Leave Petitions against the   decision  in  the   case  of   China  Petroleum  Pipeline Bureau (supra) and Srico Projects Pvt. Ltd. (supra) have been dismissed by this Court.  8.14 It is further submitted by learned Attorney General that in   the   present   case   the   final   bill   payment   had   been made to the respondent and accepted by it pursuant to an   understanding   between   the   parties   by   which   the respondent expressly waived its Notified Claims. It is submitted that the arbitration clause itself is subject to Clauses 6.7.1.0 and 6.7.2.0. It is submitted that Clause 6.7.2.0 dealing with “Notified Claims” expressly declares that the acceptance of any amount by the contractor in respect of the Notified Claims shall result in full and final   satisfaction   of   the   claims   by   the   contractor   in respect of the Notified Claims and hence, the contract, including the arbitration clause, shall stand discharged and extinguished. This is as per Clause 6.7.2.0 itself, notwithstanding   any   qualifying   remarks,   protest   or condition imposed or purported to be imposed by the contractor relative to the acceptance of such payment.  8.15 It   is   submitted   that   applying   these   principles   to   the present   case,   NCCL’s   express   statement   dated 02.11.2016   is   required   to   be   appreciated   and/or // 22 // considered. That pursuant to the said statement by the NCCL, the IOCL (petitioner) levied a price adjustment of only   4%   as   opposed   to   10%;   and   the   respondent expressly withdrew its Notified Claims. It is submitted that the IOCL also paid the dues as per the final bill. The Notified Claims, having been withdrawn, therefore, could not more be the subject matter of any reference to arbitration.   It   is   submitted   that   as   a   result   of   the acceptance by the NCCL of the amount paid pursuant to its   final   bill,   and   the   Notified   Claims   having   been withdrawn,   and   the   result   of   Clauses   6.7.1.0   and 6.7.2.0, the contract, including the arbitration clause stands   discharged   and   extinguished   and   therefore, subsequently, no reference to arbitration could be made. 8.16 It   is   submitted   that   it   is   only   6½   months   later,   on 16.05.2017 and after receiving the final bill payment 8 days earlier on 08.05.2017, that the NCCL reneged on its letter withdrawing its demand in regard to Notified Claims. It is submitted that the reason why the NCCL withdrew their demand for payment of the full amount of final bill including Notified Claims is that if 10% has been deducted due to the delay, an amount of Rs.14.8 Crores would have been deducted from the payment of NCCL.   It   is   submitted   that   having   received   Rs.151 Crores against the contract of Rs.148 Crores, the NCCL was well aware that in such an eventuality, it would have received no amount against the final bill and its // 23 // bank guarantee would also have been invoked. That in fact by withdrawing the demand, the respondent was now able to get Rs.4.53 Crores as well as the return of the bank guarantee of Rs.14.8 Crores.  8.17 It is further submitted that Clause 9.0.2.0 of the GCC specifically excludes certain matters, such as disputes concerning the scope of the arbitration agreement, viz., (i) whether or not a claim is a Notified Claim; (ii) whether or not a Notified Claim is included in the contractor’s bill   etc.;   from   the   scope,   purview   and   ambit   of   the Arbitration Agreement. It is submitted that under sub­ Clause   (iii)   thereof,   a   Notified   Claim   covered   by   a decision   of   the   General   Manager   is   specifically   an excluded matter. It is submitted that in the present case the General Manager rejected the demand of the NCCL in   regard   to   the   Notified   Claims,   particularly   as   the demand   in   regard   to   ‘Notified   Claims’   had   been specifically   withdrawn   by   the   NCCL.   It   is   submitted therefore that viewed from any angle, as no arbitration clause existed so far as the NCCL is concerned, the High Court has committed a serious error in referring the dispute between the parties to Arbitrator and appointing the Arbitrator.  8.18 Now, so far as the other four cases are concerned, the learned Attorney General has submitted that in those four cases the claims were referred / sent to the General // 24 // Manager under Clause 9.0.2.0 of the GCC.  That in all the remaining cases the General Manager declared that none of the claims of the NCCL was a Notified Claim. Therefore, the claims which are found by the General Manager not to be Notified Claims are not arbitrable and are outside  the  scope  and purview of  the Arbitration Agreement.   It   is   submitted   that   in   that   view   of   the matter,   the   High   Court   ought   to   have   dismissed   the applications / petitions filed by the NCCL under Section 11 of the Arbitration Act.  Making   above   submissions   and   relying   upon decisions, it is prayed to allow the present appeals and set aside the respective orders passed by the High Court referring the dispute between the parties to arbitration and appointing the sole Arbitrator.  9. Present appeals are vehemently opposed by Shri Ranjith Kumar, learned Senior Advocate appearing on behalf of the respondent – NCCL.  9.1 Shri Ranjith Kumar, learned Senior Advocate appearing for   the   respondent   –   NCCL   has   made   following submissions   pointing   out   the   relevant   facts   which, according to him, are relevant for deciding the dispute in present appeals.  (1) That,   the   parties   herein   had   entered   into   an agreement,   whereby   the   respondent   NCCL   was // 25 // tasked   with   the   job   of   completing   the   civil, structural and associated UG Piping works for the Paradip Refinery; (2) Due to certain reasons attributable to IOCL, there was a delay in completion of the works; (3) In accordance with the GCC, NCCL on 23.05.2016, applied   for   extension   of   time   and   submitted   its final bill on 05.08.2016; (4) On   29.07.2016,   NCCL   issued   the   No   Due Certificate, however, it also made it clear that the said Certificate would not include final bill amount, service tax amount and the Notified Claims due from IOCL; (5) The   Engineer­in­charge   vide   letter   dated 01.01.2016, expressly acknowledged the presence of “Notified Claims” in the final bill and coerced NCCL to take back its Notified Claims in order to process its application for EOT; (6) Under duress, NCCL was constrained to issue a letter   on   02.11.2016   withdrawing   its   Notified Claims on the twin condition that the application for   EOT   is   considered   favorably   and   the   price discount does not exceed 4% of the contract value; (7) That,   the   letter   dated   02.11.2016   was   clearly conditional and was in the nature of an offer and not an acceptance; (8) Vide letter dated 13.01.2017, IOCL informed NCCL // 26 // that they had only partially allowed the application for EOT and a price discount of 4% was applied to the period for which the application for EOT was not allowed. Therefore, it is clear that IOCL did not positively respond to both the conditions stated by NCCL in its letter dated 02.11.2016;  (9) That,   aggrieved   by   the   aforesaid   decision,   NCCL without any delay, on 23.01.2017, communicated that the decision to partially allow its application for   EOT   is   unacceptable   as   the   same   is   not   in accordance   with   the   conditional   offer   given   by NCCL and also since the delay was caused due to reasons attributable to the IOCL; (10) Disregarding   the   aforesaid   letter,   IOCL   on 08.05.2017,   unilaterally   released   the   payment against   the   final   bill,   after   adjusting   the   price discount; (11) That, NCCL on 16.05.2017 i.e. within 10 days from the release of the amount, informed IOCL that the application for price discount is misplaced and its ‘Notified Claims’ still hold good as the conditional offer of NCCL was not accepted; (12) Since   IOCL   miserably   failed   to   provide   an appropriate response within a reasonable period of time,   NCCL   invoked   the   arbitration   clause   i.e. Clause   9.0.1.0   of   the   GCC   and   submitted   its claims to IOCL; // 27 // (13) It is submitted that as per Clause 9.0.1.0 read with Clause 9.0.2.0 of the GCC, IOCL had to refer the claims of NCCL to its General Manager and then the General Manager was to issue a declaration pursuant   to   which   the   arbitration   could commence; (14) It is submitted that in the claims concerned in four of the petitions, the determination was made by the   General   Manager   in   an   inordinately   belated manner. It is submitted that in 3 out of 5 petitions, the   determination   by   the   General   Manager   was made   after   NCCL   filed   the   arbitration   petitions before the High Court. It is submitted that in a completely malafide and deceptive manner, IOCL claims to have made a reference to the General Manager who determined the nature of claims after filing of the counter affidavit by NCCL before this Court.  (15) It is   submitted  that  therefore,  as   such,   IOCL is attempting   to   scuttle   respondent’s   contractual right to pursue arbitration by bringing on record a document nearly  two years  after  the  respondent invoked the arbitration clause.  (16) It is submitted that the General Manager’s decision which is relevant in SLP Nos.13161 and 13183 of 2019 was based on the ground that there was full and   final   settlement   between   the   parties.   It   is // 28 // submitted   that   as   the   decision   of   the   General Manager   on   “Notified   Claims”   was   erroneous, malafide and on technical grounds, NCCL rightly approached the High Court of Delhi under Section 11(6) of  the Arbitration Act  seeking the relief of appointment   of   Arbitrator.   It   is   submitted   that therefore the High Court is absolutely justified in appointing the Arbitrator.  9.2 Shri Ranjith Kumar, learned Senior Advocate appearing for NCCL has supported the impugned orders passed by the   High   Court   by   making   the   following   broad submissions: (1) As   per   the   agreement   entered   into   between   the parties, the General Manager is not permitted to decide if a claim is barred by virtue of there being accord   and   satisfaction   or   a   claim   being   an excepted claim.  (2) Under Section 11(6­A) of the Arbitration Act, at the stage of appointment of an arbitrator, the scope of intervention   by   the   Courts   is   confined   to   the examination   of   the   existence   of   an   arbitration agreement.  (3) At the stage of appointment of the arbitrator, the Court   cannot   look   into   whether   there   has   been accord and satisfaction between the parties (4) At the stage of appointment of arbitrator, the Court cannot look into whether a claim is an excepted // 29 // claim or not. (5) Contractual clauses cannot be read in a manner that abridges statutory rights and the doctrine of mutuality,   to   confer   the   power   to   unilaterally determine arbitrability of a dispute upon one of the parties. (6) As   per   the   doctrine   of   election,   the   present proceedings ought to be dismissed since IOCL has preferred an application under Section 16(2) and 16(5)   challenging   the   jurisdiction   of   the   Arbitral Tribunal. 9.3 On an interpretation of the Clauses of the GCC, Shri Ranjith Kumar, learned Senior Advocate appearing for the respondent NCCL has submitted that a bare perusal of the relevant clauses of the GCC would indicate that the   General   Manager   of   IOCL   is   neither   entitled   to examine   whether   a   “Notified   Claim”   is   an   ‘excepted claim’ nor can he look into the issue whether there is accord and satisfaction between the parties.  9.4 It is submitted that Clause 9.0.1.0 is subject to Clauses 6.7.1.0,   6.7.2.0   and   9.0.2.0.   Further,   Clause   9.0.2.0 creates a machinery whereby IOCL has unbridled power conferred upon its General Manager to certify if a claim is   capable   of   being   referred   to   arbitration.   The   said clause, according to IOCL vests the sole discretion of deciding   the   arbitrability   of   claims   on   the   General Manager.   It   is   submitted   that,   as   such,   the // 30 // interpretation of the Clause as suggested by IOCL, is in derogation of not only the arbitrator’s power to decide arbitrability, but also the Court’s power under Section 11 of the Arbitration Act.  9.5 It is submitted that the said Clause would indicate that the General Manager is only supposed to see if the claim raised   by   the   respondent   is   (i)   a   Notified   Claim   as defined under Clause 1.21.0.0 r/W. Clause 6.6.1.0; and (ii) whether the Notified Claim is included in the final bill in   accordance   with   Clause   6.6.3.0.   That   the   General Manager is not empowered under the said Clause to state that a claim is not arbitrable due to full and final settlement between the parties or due to a claim being an excepted claim. 9.6 It is submitted that in the present case, the IOCL has admitted that the claims raised by the respondent are ‘Notified Claims’ and this fact has never been disputed by the IOCL or its General Manager. It is submitted that even   the   second   condition   is   also   fulfilled   as   the respondent’s final bill includes its Notified Claims. It is submitted that thus the only logical conclusion which follows   is   that   the   Notified   Claims   raised   by   the respondent   should   have   been   referred   to   arbitration. However,   the   General   Manager   of   the   IOCL,   in   two cases, denied referring the Notified Claims to arbitration on the ground that there was full and final settlement // 31 // between   the   parties,   and   in   other   three   cases   the General   Manager   has   denied   referring   the   Notified Claims   to   arbitration   on   the   ground   that   they   are ‘excepted claims’. 9.7 It   is   submitted   that   as   per   the   GCC,   the   General Manager   is   not   entitled   to   resist   the   reference   of   a Notified Claim to arbitration on the ground of accord and satisfaction. That the aspect pertaining to full and final   settlement   between   the   parties,   forms   part   of Clauses 6.7.1.0 and 6.7.2.0 and not of Clause 9.0.2.0. That,   in   fact,   Clause   6.7.1.0   expressly   provides   that upon payment of sums under the final bill, there shall be full and final settlement, without prejudice to the Notified Claims of the contractor included in the final bill.   It   is   submitted   that   therefore,   even   after   the payment of money on 08.05.2017, Notified Claims are neither settled nor is there full and final settlement in respect of Notified Claims. It is submitted that insofar as ‘excepted claims’ are concerned, as per Clause 9.0.2.0, once the General Manager comes to a decision that a claim is a Notified Claim and the same is included in the final   bill,   he   is   duty   bound   to   refer   the   claim   to arbitration. It is submitted that therefore the reasoning behind the decision rendered by the General Manager that   the   claims   are   not   Notified   Claims   is   not   only unsustainable, but is also   contrary to Clause ex facie   9.0.2.0.  It is   submitted  that  Clause  9.0.2.0   does not // 32 // render the decision of the General Manager final.  9.8 It is further submitted that vide the Amendment Act, 2015,   section   11(6­A)   has   been   inserted   by   virtue   of which, the scope of intervention at Section 11 stage is very narrow. Reliance is placed upon the decision of this Court in the case of  Duro Felguera S.A. v. Gangavaram . It is submitted that Port Limited [(2017) 9 SCC 729] after   insertion   of   Section   11(6­A),   the   scope   of intervention by the Court at the stage of appointment of Arbitrator is narrowed down and the Courts may have to now only examine the existence of a valid arbitration agreement. That in the aforesaid decision it is held that the   legislative   purpose   is   essentially   to   minimize   the Court’s   intervention   at   the   stage   of   appointment   of Arbitrator   and   that   the   intention   as   incorporated   in Section 11(6­A) ought to be respected is the submission. 9.9 It is submitted that despite the above binding decision, in the subsequent decision in the case of  United India Insurance Co. Ltd. v. Antique Art Exports (P) Ltd. [(2019) 5 SCC 362] , a coordinate Bench of this Court took the view that once a claim is settled, it leaves no arbitral dispute subsisting under the agreement to be referred to the Arbitrator.  9.10 It   is   submitted   that   the   conflicting   decisions   were considered and  the  issue  has now  been settled by a // 33 // Three   Judges   Bench   of   this   Court   in   a   subsequent decision   rendered   in   the   case   of   Mayavati   Trading Private Limited v. Pradyuat Deb Burman [(2019) 8 th SCC 714] .  That after considering in detail the 246  Law Commission   Report;   the   report   of   the   High­Level Committee   regarding   institutionalization   of   arbitration in India and the Statement of Objects and Reasons of the 2015 Amendment Bill, it is held that post­2015, the scope of the Courts’ powers at the stage of appointment of   Arbitrator   is   confined   to   the   examination   of   the existence of the arbitration agreement. It is submitted that the decision of this Court in the case of Mayavati Trading Private Limited (supra) has been subsequently followed by this Court in a recent decision in the case of Vidya Drolia (supra). 9.11 Shri Ranjith Kumar, learned Senior Advocate appearing on behalf of the respondent has also relied upon the following   decisions   of   this   Court   in   support   of   his submissions   of   applicability   of   Section  11(6­A)  and a very limited jurisdiction of the Courts while considering an application of Section 11(6­A) of the Arbitration Act post­2015.  (1) Uttarakhand   Purv   Sainik   Kalyan   Nigam   Ltd.   v. Northern Coal Field Ltd. (2020)2 SCC 455 (2) BSNL & Anr. v. Nortel Networks India Pvt. Ltd.  (2021)5 SCC 738  // 34 // (3) Pravin Electricals (P) Ltd. v. Galaxy Infra & Engg. (P) Ltd.  (2021)5 SCC 671 (4) Sanjiv Prakash v. Seema Kukreja (2021)9 SCC 732 9.12 It is further submitted that although 2019 Amendment to the Arbitration Act has deleted Section 11(6­A), this Court in the case of Vidya Drolia (supra) has clarified that the rationale behind the insertion of Section 11(6­A) of the Arbitration Act would continue to apply and guide the Courts on its scope of jurisdiction at stage one, that is, the pre­arbitration stage.  9.13 It   is   further   submitted   by   learned   Senior   Advocate appearing for the respondent NCCL that as held by this Court in the case of Vidya Drolia (supra) as well as in the case of   Swiss Timing Limited v. Commonwealth Games   2010   Organizing   Committee   [(2014)   6   SCC 677] ,   the   role   of   a   Court   is   to   assist   and   support arbitration   and   leave   a   substantive   part   of   the adjudication   to   the   arbitral   Tribunal.   It   is   submitted therefore that at the stage of an application filed under Section 11, the Court is only supposed to look as to, whether,   a   valid   arbitration   agreement   exists.   It   is submitted that therefore the scope of intervention by the Court   is   restricted   at   the   stage   of   appointment   of // 35 // Arbitrator and it can neither examine whether certain claims are ‘excepted’ nor can it look into the issue of whether there is “accord and satisfaction”.  9.14 It   is   further   submitted   by   learned   Senior   Advocate appearing for the respondent NCCL that in cases where the claims are rejected by the General Manager on the ground that there was “accord and satisfaction” between the parties and hence, not referable to arbitration, in the instant case  the  respondent has  disputed  petitioner’s contention on “accord and satisfaction” even before the payment of final bill. It is submitted that therefore the issue whether “accord and satisfaction” existed between the parties is virtual in nature and examination of the same would require detailed perusal of the evidence by the Arbitral Tribunal. That in any event, pursuant to the introduction of Section 11(6­A), the Court has to restrict itself   to   the   issue   of   existence   of   the   Arbitration Agreement at Section 11 stage and cannot delve into the issue of “accord and satisfaction” is the submission.  9.15 Relying upon the decisions of this Court in the case of reported in Ambica Construction v. Union of India   (2006) 13 SCC 475  and  R.L. Kalathia & Co. v. State of   Gujarat   reported   in   (2011)   2   SCC   400 ,   it   is submitted   that   as   observed   by   this   Court   in   the aforesaid two decisions, in many instances, contractors are coerced to issue a no­dues certificate, without which // 36 // no amount would be released. It is submitted that in the aforesaid decision it is observed that merely because the contractor has issued “No Dues Certificate”, if there is an acceptable claim, the Court cannot reject the same on the ground of issuance of “No Dues Certificate”.  9.16 It   is   further   submitted   that   the   question   whether   a Notified   Claim   is   an   ‘excepted   claim’,   is   within   the exclusive   domain   of   the   Arbitrator   to   be   answered. Reliance is placed on the decision of this Court in the case of   BSNL v. Motorola India (P) Ltd.   reported in (2009) 2 SCC 337  and  National Insurance Co. Ltd. v. reported in   Boghara Polyfab Pvt. Ltd.   (2009) 1 SCC 267  (even prior to 2015 Amendment to the Arbitration Act) as well as in the case of  Zostel Hospitality (P) Ltd. vs. Oravel Stays (P) Ltd.   reported  in   (2021)  9 SCC 765 .  9.17 It is further submitted that Section 11 of the Arbitration Act   expressly   confers   powers   upon   the   Courts   to determine the existence of an Arbitration Agreement and subsequently appoint an Arbitrator. It is submitted that Section   8   confers   upon   the   Courts   and   judicial authorities the power to refer the parties to arbitration when   there   is   an   arbitration   Agreement.   Similarly, section 16 of the Arbitration Act categorically recognizes and   empowers   the   Arbitral   Tribunal   to   rule   on   any objection   raised   as   against   its   jurisdiction.   It   is // 37 // submitted   that   therefore   petitioner’s   interpretation   of Clause 9.0.2.0 of the GCC  qua  the purported finality of the   determination   of   its   General   Manager,   seeks   to usurp the statutory powers of the Courts as enshrined under Sections 8 and 11 and the statutory power of an arbitral Tribunal as enshrined under Section 16.  9.18 It   is   further   submitted   that   insofar   as   the   claims concerned   in   other   four   petitions   (except   the   lead matter), the determination was made after an inordinate delay.  That in 3 out of 5 petitions, the determination by the   General  Manager   was   made   after   the   respondent filed   the   Arbitration   Petitions   before   the   High   Court. That in SLP No.13408/2019, even no reference to the General   Manager   was   made   until   the   filing   of   the Arbitration   Petition   before   the   High   Court.   That therefore   the   General   Manager’s   decision   in   the aforesaid four SLPs is inefficacious as the determination has been made not only thirty days after the submission of the claim, but also after the arbitration petitions were filed before the High Court. Reliance is placed upon the decisions of this Court in the case of  Datar Switchgears Ltd. v. Tata Finance Ltd.   reported in   (2000) 8 SCC 151 (Paras 18 and 19) . 9.19 It is further submitted by Shri Ranjith Kumar, learned Senior Advocate appearing for respondent ­ NCCL that in   the   present   case,   the   petitioner   had   filed   an // 38 // application challenging the jurisdiction of the Arbitral Tribunal   under   Sections   16(2)   and   16(5)   of   the Arbitration   Act   before   the   Arbitral   Tribunal   on 10.06.2019, which is, after filing of the present petition and   before   the   issuance   of   notice   by   this   Court   on 03.07.2019. That the petitioner has not disclosed the same and has suppressed this factum of pursuing two remedies simultaneously. It is submitted that therefore as the petitioner has elected to pursue the proceeding before the Arbitral Tribunal and as per the doctrine of election   of   remedies,   the   petitioner   ought   not   to   be permitted   to   continue   the   present   proceedings   before this Court.    Making above submissions, it is prayed to dismiss  the present appeals.  10. We have heard learned Senior Advocates appearing for the respective parties at length.   10.1 By the impugned orders the High Court in exercise of powers under Section 11(6) of the Arbitration Act has appointed the Arbitrators to adjudicate and resolve the disputes   between   the   parties   arising   out   of   the respective   contracts.   The   respective   orders   passed by the High Court appointing the Arbitrator in applications under   Section   11(6)   of   the   Arbitration   Act   are   the subject matter of present appeals.  // 39 // 10.2 It cannot be disputed that both the parties are governed by the GCC. The GCC are the part of the Agreements / Contracts   between   the   parties.   Under   the   GCC,   the parties have agreed to resolve the dispute between them only in terms of the relevant clauses of the GCC referred to   hereinabove.   The   parties   have   agreed   that   certain specified   disputes   alone   will   be   the   subject   of arbitration. 10.3 In the case of Narbheram Power &  Steel   (P)   Ltd. (supra),   it   is   observed   and   held   that   the   parties   are bound by the Clauses enumerated in the policy and the Court does not transplant any equity to the same by re­ writing a clause. It is further observed and held that an arbitration clause is required to be strictly construed. Any   expression   in   the   clause   must   unequivocally express   the   intent   of   arbitration.   It   can   also   lay   the postulate   in   which   situations   the   arbitration   clause cannot be given effect to. It is further observed that if a clause stipulates that under certain circumstances there can be no arbitration and they are demonstrably clear then   the   controversy   pertaining   to   appointment   of Arbitrator has to be put to rest (Paras 10­23).  10.4 In the case of Centrotrade Minerals & Metal Inc. (supra), this Court had an occasion to consider the concept of party autonomy and it is observed and held that party autonomy is virtually the backbone of arbitration. It is // 40 // further observed and held that party autonomy being the   brooding   and   guiding   spirit   in   arbitration,   the parties   are   free   to   agree   on   the   application   of   three different laws governing their entire contract – (1) proper law of contract; (2) proper law of arbitration agreement and (3) proper law of the conduct of arbitration. It is further observed in the said decision that the parties to an arbitration agreement have the autonomy to decide not only on the procedural law to be followed but also the substantive law. The choice of jurisdiction is also left to the contracting parties.  10.5 In the case of  DLF Universal Ltd. & Anr. v. Director, Town and Country Planning Department, Haryana & Ors. [(2010) 14 SCC 1],  it is observed and held that the contract is to be interpreted according to its purpose. The   purpose   of   a   contract   is   the   interest,   objective, values, policy that the contract is designed to actualize. It comprises the joint intent of the parties. It is observed that it is not an intent of a single party; it is the joint intent of both the parties and the joint intent of the parties   is   to   be   discovered   from   the   entirety   of   the contract   and   the   circumstances   surrounding   its formation (Para 13).  10.6 In the case of  Rajasthan State Industrial Development and Investment Corporation & Anr. v. Diamond and Gem Development Corporation Ltd. & Anr. [(2013) 5 // 41 // , it is observed and held that a party cannot SCC 470] claim anything more than what is covered by the terms of the contract, for the reason that the contract is a transaction between two parties and has been entered into with open eyes and by understanding the nature of contract. It is further observed that thus the contract being a creature of an agreement between two or more parties   has   to   be   interpreted   giving   literal   meanings unless there is some ambiguity therein. The contract is to be interpreted giving the actual meaning to the words contained in the contract and it is not permissible for the Court to make a new contract, however reasonable, if the parties have not made it themselves. It is further observed   that   the   terms   of   the   contract   have   to   be construed   strictly   without   altering   the   nature   of   a contract as it may affect the interest of either of the parties adversely (Para 23).  10.7 In   the   case   of   Mitra  Guha   Builders   (India)   Company (supra),   while   interpreting   the   clause   by   which   the parties agreed that the decision of the Superintending Engineer in levying compensation is final and the same is an ‘excepted matter’ and the determination shall be only   by   the   Superintending   Engineer   and   the correctness of his decision cannot be called in question in the arbitration proceedings and the remedy, if any, will   arise   in   the   ordinary   course   of   law,   the   Three Judges   Bench   of   this   Court   after   referring   to   and // 42 // considering the earlier decisions on the point observed and held that once the parties have decided that certain matters   are   to   be   decided   by   the   Superintending Engineer   and   his   decision   would   be   final,   the   same cannot be the subject matter of arbitration.  10.8 In   the   case   of   Harsha   Construction   (supra),   while interpreting the clause in the agreement by which some of the disputes were specifically not arbitrable and in relation   to   the   said   disputes   the   contractor   had   to negotiate   with   the   Engineer   concerned   and   if   the contractor was not satisfied with the rate determined by the Engineer, the contractor was required to follow the procedure   mentioned   in   the   said   clause   and   in   this regard, in paras 18 and 19, it is observed and held as under: “18. Arbitration arises from a contract and unless there is a specific written contract, a contract with regard to arbitration cannot be presumed. Section 7(3)   of the Act clearly specifies that the contract with regard to arbitration must be in writing. Thus, so far as the disputes which have been referred to in Clause 39 of the contract are concerned, it was not open to the Arbitrator to arbitrate upon the said disputes as there was a specific clause whereby the said disputes had been “excepted”. Moreover, when the law specifically makes a provision with regard   to   formation   of   a  contract   in   a   particular manner,   there   cannot   be   any   presumption   with regard to a contract if the contract is not entered into by the mode prescribed under the Act. // 43 // 19.   If   a   non­arbitrable   dispute   is   referred   to   an Arbitrator and even if an issue is framed by the Arbitrator   in   relation   to   such   a   dispute,   in   our opinion,   there   cannot   be   a   presumption   or   a conclusion to the effect that the parties had agreed to refer the issue to the Arbitrator. In the instant case,   the   respondent   authorities   had   raised   an objection   relating   to   the   arbitrability   of   the aforestated issue before the Arbitrator and yet the Arbitrator had rendered his decision on the said “excepted”   dispute.   In  our  opinion,   the  Arbitrator could not have decided the said “excepted” dispute. We,   therefore,   hold   that   it   was   not   open   to   the Arbitrator   to   decide   the   issues   which   were   not arbitrable and the award, so far as it relates to disputes   regarding   non­arbitrable   disputes   is concerned, is bad in law and is hereby quashed.” 10.9 At this stage, a recent decision of this Court in the case of Vidya Drolia (supra), which, as such, is post­insertion of Section 11(6­A) of the Arbitration Act, is required to be referred to. In the said decision it is observed and held that the issue of non­arbitrability of a dispute is basic for arbitration as it relates to the very jurisdiction of the Arbitral Tribunal. An Arbitral Tribunal may lack jurisdiction for several reasons and non­arbitrability has multiple meanings. After referring to another decision of this Court in the case of  Booz Allen & Hamiltan Inc. v. SBI Home Finance Ltd. [(2011) 5 SCC 532 (Para 34)] , it is observed and held that there are facets of non­ arbitrability, namely  “ (i) Whether the disputes  are  capable  of adjudication   That   is,   whether   the and   settlement   by   arbitration? disputes,   having   regard   to   their   nature,   could   be resolved by a private forum chosen by the parties (the // 44 // Arbitral   Tribunal)  or  whether  they  would   exclusively fall within the domain of public fora (courts). (ii) Whether the disputes are covered by the arbitration agreement?   That   is,   whether   the   disputes   are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes   fall   under   the   “excepted   matters”   excluded from the purview of the arbitration agreement. (iii) Whether the parties have referred the disputes to arbitration?  That is, whether the disputes fall under the scope of the submission to the Arbitral Tribunal, or whether they do not arise out of the statement of claim and the counterclaim filed before the Arbitral Tribunal. A dispute, even if it  is capable of being  decided by arbitration   and   falling   within   the   scope   of   an arbitration agreement, will not be “arbitrable” if it is not enumerated in the joint list of disputes referred to arbitration, or in the absence of such a joint list of disputes, does not form part of the disputes raised in the pleadings before the Arbitral Tribunal.” After   referring   to   and   considering   in   detail   the earlier decisions on the point, more particularly, with respect to non­arbitrability and the ‘excepted matters’, it is ultimately concluded in para 76 as under:   “76. In view of the above discussion, we would like to propound a four­fold test for determining when the   subject   matter   of   a   dispute   in   an   arbitration agreement is not arbitrable: 76.1. (1) When cause of action and subject­matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem. 76.2. (2) When cause of action and subject­matter of   the   dispute   affects   third­party   rights;   have   erga omnes   effect;   require   centralized   adjudication,   and // 45 // mutual   adjudication   would   not   be   appropriate   and enforceable; 76.3. (3) When cause of action and subject­matter of   the   dispute   relates   to   inalienable   sovereign   and public interest functions of the State and hence mutual adjudication would be unenforceable;  76.4 (4) When the subject­matter of the dispute is expressly or by necessary implication non­arbitrable as per mandatory statute(s). 76.5   These   tests   are   not   watertight compartments; they dovetail and overlap, albeit when applied   holistically   and   pragmatically   will   help   and assist   in   determining   and   ascertaining   with   great degree of certainty when as per law in India, a dispute or   subject   matter   is   non­arbitrable.   Only   when   the answer is  affirmative  that  the subject  matter  of  the dispute would be non­arbitrable. 76.6 However, the aforesaid principles have to be applied with care and caution as observed in  Olympus Superstructures (P) Ltd. : (SCC p. 669, para 35) “35. ...Reference   is   made   there   to   certain disputes like criminal offences of a public nature, disputes   arising   out   of   illegal   agreements   and disputes   relating   to   status,   such   as   divorce, which cannot be referred to arbitration. It has, however,   been   held   that   if   in   respect   of   facts relating to a criminal matter, say, physical injury, if there is a right to damages for personal injury, then such a dispute can be referred to arbitration (Keir v. Leeman) . Similarly, it has been held that a husband and a wife may refer to arbitration the terms on which they shall separate, because they can make a valid agreement between themselves on   that   matter   ( Soilleux   v.   Herbst,   Wilson   v. Wilson and Cahill v. Cahill ).” 10.10 On the question, who decides on non­arbitrability of the   dispute,   after   referring   to   and   considering   the // 46 // earlier decisions on the point, more particularly, the decisions   in   the   case   of   Garware   Wall   Ropes   Ltd. (supra); Hyundai Engg. & Construction Co. Ltd. (supra) and  Narbheram Power & Steel (P) Ltd. (supra), it is observed   and   held   that   the   question   of   non­ arbitrability   relating   to   the   inquiry,   whether   the dispute was governed by the arbitration clause, can be examined by the Courts at the reference stage itself and may not be left unanswered, to be examined and decided by the Arbitral Tribunal. Thereafter, in para 153,   it   is   observed   and   held   that   the   expression, “existence of arbitration agreement” in Section 11 of the Arbitration Act, would include aspect of validity of an   arbitration   agreement,   the   Court   at   the albeit   reference stage would apply the   prima facie   test. It is further   observed   that   in   cases   of   debatable   and disputable facts and, good reasonably arguable case etc., the Court would force the parties to abide by the arbitration Agreement as the Arbitral Tribunal has the primary   jurisdiction   and   authority   to   decide   the disputes   including   the   question   of   jurisdiction   and non­arbitrability.   Ultimately   in   para   154,   the proposition of law is crystallized as under:  “154. Discussion under the heading ‘Who decides Arbitrability?’ can be crystallized as under: 154.1. Ratio   of   the   decision   in   Patel Engineering Ltd.  on the scope of judicial review by the court while deciding an application under Sections 8 or // 47 // 11 of the Arbitration Act, post the amendments by Act 3 of 2016 (with retrospective effect from 23­10­2015) and even post the amendments vide Act 33 of 2019 (with effect from 9­8­2019), is no longer applicable. 154.2. Scope   of   judicial   review   and jurisdiction of the court under Section 8 and 11 of the Arbitration Act is identical but extremely limited and restricted. 154.3. The general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence­competence, is that the arbitral tribunal is the preferred first authority to determine and decide all questions   of   non­arbitrability.   The   court   has   been conferred power of “second look” on aspects of non­ arbitrability post the award in terms of sub­clauses (i), (ii) or (iv) of Section 34(2)(a) or sub­clause (i) of Section 34(2)(b) of the Arbitration Act. 154.3. Rarely as a demurrer the court may interfere   at   the   Section   8   or   11   stage   when   it   is manifestly   and   ex   facie   certain   that   the   arbitration agreement is non­ existent, invalid or the disputes are non­arbitrable, though the nature and facet of non­ arbitrability would, to some extent, determine the level and   nature   of   judicial   scrutiny.   The   restricted   and limited   review   is   to   check   and   protect   parties   from being   forced   to   arbitrate   when   the   matter   is demonstrably   “non­arbitrable”   and   to   cut   off   the deadwood. The court by default would refer the matter when   contentions   relating   to   non­arbitrability   are plainly   arguable;   when   consideration   in   summary proceedings   would   be   insufficient   and   inconclusive; when   facts   are   contested;   when   the   party   opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the arbitral tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism.” 10.11 In the recent decision of this Court in the case of  DLF // 48 // Home   Developers   Limited   v.   Rajapura   Homes Private Limited and Another [2021 SCC Online SC 781]   in   which   this   Court   also   had   an   occasion   to consider   Section   11(6­A)   of   the   Arbitration   Act   and ultimately   has   observed,   after   referring   to   and considering the decision of three Judges Bench of this Court   in   the   case   of   Vidya   Drolia   (supra)   that   the jurisdiction   of   the   Court   under   Section   11   of   the Arbitration Act is primarily to find out whether there existed   a  written  agreement  between  the   parties for resolution of the dispute and whether the aggrieved party has made out a  prima facie   arguable case, it is further   observed   that   limited   jurisdiction,   however, does not denude the Court of its judicial function to look beyond the bare existence of an arbitration clause to cut the deadwood. In the said decision, this Court had taken note of the observations made in the case of Vidya   Drolia   (supra)   that   with   a   view   to   prevent wastage of public and private resources, the Court may conduct ‘ prima facie  review’ at the stage of reference to weed out any frivolous or vexatious claims.  10.12 In the case of Nortel Networks India Pvt. Ltd. (supra), this Court had an occasion to consider the decision in the case of Vidya Drolia (supra) and in paras 46, 47 and 53.2, it is observed and held as under:  “46. The upshot of the judgment in Vidya Drolia [Vidya // 49 // Drolia v. Durga Corpn., (2021) 2 SCC 1: (2021) 1 SCC (Civ)   549]   is   affirmation   of   the   position   of   law expounded   in   Duro   Felguera   [Duro   Felguera,   S.A.   v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] and Mayavati Trading [Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714 : (2019) 4 SCC (Civ) 441] , which continue to hold the field. It must be understood clearly that   Vidya Drolia   [Vidya Drolia v. Durga Corpn., (2021) 2 SCC 1: (2021) 1 SCC (Civ)   549]   has   not   re­surrected   the   pre­amendment position on the scope of power as held in SBP & Co. v. Patel Engg. Ltd. [ SBP & Co. v. Patel Engg. Ltd.,  (2005) 8 SCC 618].  47. It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time­barred, or that the dispute is non­arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the   rule   is   to   refer   the   disputes   to   arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal. 53.2. In rare and exceptional cases, where the claims are ex facie time­barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference.” 11. Applying   the   law   laid   down   by   this   Court   in   the aforesaid decisions, let us consider the relevant clauses of the GCC governing the parties and the procedure to be followed in case of disputes between the parties to the contract on non­payment of alleged dues may be on account of extra payment or compensation in respect of the works over and above the amounts due in terms of the contract and/or the dispute on the validity of any deductions made or threatened by the owner.  // 50 // 11.1 Clause 1.21.0.0 defines “Notified Claims”. It means a claim of the contractor notified in accordance with the provisions of Clause 6.6.1.0. As per Clause 6.6.1.0, the contractor   shall   have   to  give   notice   in  writing   of   his claim   with   respect   to   any   extra   payment   or compensation in respect of the works over and above the  amounts due in terms of the contract or on the validity of any deductions made or threatened by the owner from any running account bills, by giving notice in writing of his claim in this behalf to the Engineer­in­ Charge and the Site Engineer within ten days from the date of issue of the orders or instructions relative to any works for which the contractor claims such additional payment… etc. Such notice shall give full particulars of the nature of such claim, grounds on which it is based and the amount claimed. It also further provides that the owner shall not in any way be liable to in respect of any claim by the contractor unless notice of such claim shall have been given by the contractor to the Engineer­ in­Charge and the Site Engineer. It also further provides that a contractor shall be deemed to have waived any and all claims and all his rights in respect of any claim not   notified   to   the   Engineer­in­Charge   and   the   Site Engineer in writing in the manner and within the time (ten   days   from   the   date   of   issue   of   the   orders   or instructions). It further provides  that all  such claims otherwise valid within the provisions of Clause 6.6.1.0 // 51 // read with Clauses 6.6.3.0 and 6.6.3.1 shall have to be dealt   with/considered   by   the   owner   at   the   time   of submission of the Final Bill and that any action on the part of the owner (Engineer­in­Charge or Site Engineer) to reject any claim made or notified by the contractor or delay  in  dealing  therewith  shall  be   deemed   to  be an admission by the owner of the validity of such claim or waiver   by   the   owner   of   any   of   its   rights   in   respect thereof.  11.2 As   per   Clause   6.6.3.0,   any   claims   of   the   contractor notified   in   accordance   with   the  provision   of   Clause 6.6.1.0 and remain due at the time of preparation of Final Bill by the contractor, shall have to be separately included in the Final Bill prepared by the contractor in the   form   of   a   Statement   of   Claims   attached   thereto, giving particulars of the nature of the claim, grounds on which it is based, and the amount claimed and shall be supported by a copy of the notice sent in respect thereof by the contractor to the Engineer­in­Charge and the Site Engineer under Clause 6.6.1.0. It further provides that any variance with the claim notified by the contractor within the provision of Clause 6.6.1.0 shall be deemed to   be   a   claim   different   from   the   Notified   Claim   with consequence   in   respect   thereof   indicated   in   Clauses 6.6.1.0 and 6.6.3.1. 11.3 Clause 6.6.3.1 further provides that the owner (IOCL) // 52 // shall not in any way be liable in respect of any Notified Claim   not   specifically   reflected   in   the   Final   Bill   in accordance   with   the   provisions   of   Clause   6.6.3.0.   It further   provides   that   in   and   all   Notified   Claims   not specifically reflected and included in the Final Bill in accordance with the provisions of Clause 6.6.3.0 shall be deemed to have been waived by the contractor and the   owner   (IOCL)   shall   have   no   liability   in   respect thereof and the contractor shall not be entitled to raise or   include   in  the   Final   Bill  any   claims   other  than  a Notified   Claim   conforming   in   all   respects   and   in accordance with the provisions of Clause 6.6.3.0. 11.4 Clause   6.6.4.0   provides   that   no   claim   shall   on   any account be made by the contractor after the Final Bill. It further provides that any such claim shall be deemed to have been waived and with respect to all such claims not   included   in   the   Final   Bill,   the   owner   (IOCL)   is absolved and discharged, even if not including the same, the contractor shall have acted under the mistake of law or fact.  Thus, on a fair reading of the aforesaid provisions, it can be seen that only those claims which are Notified after following the procedure as referred to hereinabove shall be considered as “Notified Claim” and in respect of any claim other than the Notified Claim, the owner is not liable to pay and as such is absolved and discharged // 53 // under the said clauses.  11.5 The next important clause is 6.7.0.0 with respect to the discharge of owner’s liability. As per Clause 6.7.1.0, the acceptance by the contractor of any amount paid by the owner to the contractor in respect of the final dues of the contractor under the Final Bill upon condition that the   said   payment   is   being   made   in   full   and   final settlement   of   all   said   dues   to   the   contractor   shall, without   prejudice   to   the   Notified   Claims   of   the contractor included in the Final Bill in accordance with the provisions of Clause 6.6.3.0, be deemed to be in full and final satisfaction of all such dues to the contractor notwithstanding   any   qualifying   remarks,   protest   or condition imposed or purported to be imposed by the contractor relative to the acceptance of such payment. 11.6 Clause   6.7.2.0   provides   that   the   acceptance   by   the contractor of any amount paid by the owner (IOCL) to the contractor in respect of the Notified Claims of the contractor included in the Final Bill in accordance with the   provisions   of   Clause   6.6.3.0   and   associated provisions   thereunder,   upon   the   condition   that   such payment is being made in full and final settlement of all the   claims   of   the   contractor   shall,   subject   to   the provisions of Clause 6.7.3.0, be deemed to be in full and final   satisfaction   of   all   claims   of   the   contractor notwithstanding   any   qualifying   remarks,   protest   or // 54 // condition imposed or purported to be imposed by the contractor relative to the acceptance of such payment with the intent that upon acceptance by the contractor of   any   payment   made,   the   Contract   (including   the arbitration   clause)   shall   stand   discharged   and extinguished insofar as relates to and/or concerns the claims of the contractor. 11.7 The next important clause to be considered would be Clause   9.0.0.0.   The   said   clause  is   for  Alternative Dispute Resolution Machinery. As per Clause 9.0.1.0, subject to the earlier Clauses, namely Clauses 6.7.1.0, 6.7.2.0   and   9.0.2.0,   any   dispute   arising   out   of   a NOTIFIED   CLAIM   of   the   contractor   included   in   the   of   the   contractor   in   accordance   with   the Final   Bill provisions of Clause 6.6.3.0 and if the contractor has not   opted   for   the   Alternative   Dispute   Resolution Machinery referred to in Clause 9.1.1.0 and any dispute arising   out   of   any   Claim   of   the   owner   against   the contractor shall be referred to the arbitration of a Sole Arbitrator. It also further provides that the owner may prefer   its   Claims   against   the   contractor   as   counter­ claims if a Notified Claim of the contractor has been referred to arbitration. It also further provides that the contractor shall not, however, be entitled to raise as a set­off, defence or counter­claim any claim which is not a   NOTIFIED CLAIM   included in the contractor’s   Final // 55 //  in accordance with the provisions of Clause 6.6.3.0. Bill 11.8 Clause 9.0.2.0 is an exclusion clause by which, certain matters  are   specifically   excluded   from   the   scope, purview and ambit of the Arbitration Agreement. It pro­ vides that disputes or differences with respect to or con­ cerning   or   relating   to   any   of   the   matters mentioned/specified   in   Clause   9.0.2.0   are   excluded from the scope, purview and ambit of the arbitration agreement.   It   further   provides   that   any   such   matter which is specifically excluded viz. (i) with respect to or concerning the scope or existence or otherwise of the Ar­ bitration Agreement; (ii) whether or not a Claim sought to be referred to arbitration by the contractor is a Noti­ fied Claim; (iii) whether or not a Notified Claim is in­ cluded in the contractor’s Final Bill in accordance with the provisions of Clause 6.6.3.0 and (iv) whether or not the contractor has opted for the Alternative Dispute Res­ olution Machinery with respect to any Notified Claim in­ cluded in the contractor’s Final Bill shall have to be de­ cided by the General Manager prior to the arbitration proceeding with or proceeding further with the reference and the Arbitrator or the Arbitral Tribunal shall have no jurisdiction to entertain the same or to render any deci­ sion with respect to such matters.  // 56 // Thus, on a fair reading of clause 9.0.0.0, only the dispute arising out of a     of the con­ NOTIFIED CLAIM tractor included in the  FINAL BILL  in accordance with the provisions of Clause 6.6.3.0 shall be referred to arbi­ tration, that too, subject to Clause 9.0.2.0 and any dis­ pute / matter falling within Clause 9.0.2.0 shall have to be   first   decided   by   the   General   Manager,   including, whether or not a Claim sought to be referred to arbitra­ tion by the contractor is a Notified Claim. Therefore, if the claim is not a Notified Claim, as per Clause 6.6.1.0 and the same is not included in the Final Bill, such a claim is outside the purview of the arbitration agree­ ment. Whether or not a claim sought for arbitration by the contractor is a Notified Claim or any such matter / dispute is specifically excluded from the scope, purview and ambit of arbitration agreement, such matter / dis­ pute shall have to be first decided by the General Man­ ager prior to the arbitral proceeding with or proceeding further with the reference. Thus, unless there is a deci­ sion by the General Manager on whether or not a claim sought to be referred to arbitration by the contractor is a Notified Claim or not, the Arbitrator or Arbitral Tribunal shall have no jurisdiction to entertain such a dispute.  The aforesaid clauses of the GCC are part of the contract between the parties herein and both the parties are bound by the aforesaid claims.  // 57 // 12. It is the case on behalf of the petitioner IOCL that the IOCL   had   settled   the   claim   of   respondent   –   NCCL accepting NCCL’s offer to grant extension of time; not to give price adjustment of over 4% of the total contract value   and   consequently   IOCL   condoned   the   delay   of 1493   days   and   granted   extension   of   time   without applying any price discount.  Further for the delay of 65 days, IOCL applied the price discount of Rs.6,44,40,021 i.e. 4% of the total value of contract and thereafter IOCL released   the   payment   of   Rs.4,53,04,021/­   against NCCL’s   final   bill   (adjusting   price   discount   of   Rs.6.4 Crores   as   against   Rs.14.8   Crores)   and   also   returned NCCL’s   Bank   Guarantee   which   came   to   be   fully accepted by the respondent NCCL. It is the case of IOCL that thereafter, it was not open for the respondent to raise   any   further   claim.   Therefore,   it   is   the   case   on behalf  of the  petitioner  that,  there being ‘accord and satisfaction’ for the claim, being an ‘excepted claim’, it was   not   open   for   the   respondent   to   invoke   the arbitration agreement and request for appointment of an Arbitrator. It is also the case on behalf of the petitioner IOCL   that   in   view   of   the   specific   decisions   by   the General Manager, on “Notified Claims”, in view of Clause 9.0.2.0, for the same claims which are not held to be ‘Notified   Claims’  by   the   General  Manager,   the   matter cannot be referred to the Arbitrator in view of the clause pertaining to excluded matters.  // 58 // On the other hand, it is the case on behalf of the respondent   that   acceptance   of   the   amount   of Rs.4,53,04,021/­ was under duress and coercion. It is also the case on behalf of the respondent that earlier offer dated 02.11.2016 was a conditional one and was in the nature of an offer and subsequently when the offer was partially allowed, the respondent without any delay communicated  that  the  decision  to  partially   allow its application for EOT is unacceptable as the same is not in accordance with the conditional offer given by the respondent. 12.1 Now,   so   far   as   the   General   Manager’s   decision   on Notified Claims is concerned, it is the case on behalf of the respondent that even the decision of the General Manager on the Notified Claims will always be subject to the decision of the Arbitral Tribunal. By the impugned judgment   and   order   the   High   Court   concluded   and summed up as under: “81. Having   regard   to   the   foregoing   discussion hereinabove   my   conclusions   can   be   summed   as follows:  I)   Where   there   is   contestation   or   the   decision rendered   by   the   General   Manager   leaves   scope   for argument   as   to   whether   the   claims   lodged   by   a Contractor can be categorized as Notified Claims is best // 59 // left to the Arbitral Tribunal. In other words, except for the situation where there is no doubt that the claims were   not   lodged   with   the   Engineer   and   the   Site Engineer   as   required   under   Clause   6.6.1.0   68   read with 6.6.3.0 69, the matter would have to be left for resolution by Arbitral Tribunal. II) Aspects with regard to accord and satisfaction of the claims or where there is a dispute will also have to be left to the Arbitral Tribunal. The position in law in this   regard   remains   the   same   both   pre   and   post amendment   brought   about   in   the   1996   Act   after 23.10.2015. III) After the insertion of Subsection (6A) in 11 of the 1996 Act the scope of inquiry by the Court in a Section   11   petition,   (once   it   is   satisfied   that   it   has jurisdiction in the matter) is confined to ascertaining as to   whether   or   not   a   binding   arbitration   agreement exists qua the parties before it which is relatable to the disputes at hand. IV) The space for correlating the dispute at hand with the arbitration agreement is very narrow. Thus, except for an open and shut case which throws up a circumstance indicative of the fact  that  a particular dispute does it not fall within the four corners of the arbitration   agreement   obtaining   between   the   parties the matter would have to be resolved by an Arbitral Tribunal. In other words, if there is contestation on this score, the Court will allow the Arbitral Tribunal to reach a conclusion one way or another. This approach would be in keeping with the doctrine of Kompetenz // 60 // Kompetenz; a doctrine which has statutory recognition under Section 16 of the 1996 Act.”   13. Having   heard   learned   Counsel   appearing   for   the respective parties and in the facts and circumstances of the case, the issue / aspect with regard to ‘accord and satisfaction’   of   claims   is   seriously   disputed   and   is debatable.   Whether,   in   view   of   the   acceptance   of Rs.4,53,04,021/­ by the respondent NCCL which was released   by   IOCL   on   the   offer   /   letter   made   by   the respondent NCCL dated 02.11.2016 there is an instance of ‘accord and satisfaction’ of the claims is a good and reasonably arguable case. It cannot be said to be an open and shut case. Therefore, even when it is observed and held that such an aspect with regard to ‘accord and satisfaction’ of the claims may/can be considered by the Court at the stage of deciding Section 11 application, it is   always   advisable   and   appropriate   that   in   cases   of debatable   and   disputable   facts,   good   reasonably arguable case, the same should be left to the Arbitral Tribunal. Similar view is expressed by this Court in the case of Vidya Drolia (supra). Therefore, in the facts and circumstances   of   the   case,   though   it   is   specifically observed and held that aspects with regard to ‘accord and satisfaction’ of the claims can be considered by the Court at the stage of deciding Section 11(6) application, in the facts and circumstances of the case, the High Court has not committed any error in observing that // 61 // aspects with regard to ‘accord and satisfaction’ of the claims or where there is a serious dispute will have to be left to the Arbitral Tribunal. However, at the same time, we do not agree with the conclusion arrived at by the High Court that after the insertion of Sub­Section (6­A) in Section 11 of the Arbitration Act, scope of inquiry by the   Court   in   Section   11   petition   is   confined   only   to ascertain   as   to   whether   or   not   a   binding   arbitration agreement   exists   qua   the   parties   before   it,   which   is relatable to the disputes at hand. We are of the opinion that though the Arbitral Tribunal may have jurisdiction and   authority   to   decide   the   disputes   including   the question of jurisdiction and non­arbitrability, the same can   also  be   considered   by   the   Court  at  the   stage of deciding Section 11 application if the facts are very clear and glaring and in view of the specific clauses in the agreement   binding   between   the   parties,   whether   the dispute   is   non­arbitrable   and/or   it   falls   within   the excepted clause. Even at the stage of deciding Section 11 application, the Court may  prima facie  consider even the aspect with regard to ‘accord and satisfaction’ of the claims.  13.1 Now,   so   far   as   the   submission   on   behalf   of   the respective   parties   on   the   decision   of   the   General Manager   on   Notified   Claims   in   Civil   Appeal No.341/2022 arising out of SLP (C) No.13161/2019 is concerned, the General Manager has decided / declared // 62 // that the claims are not arbitrable since they had been settled   and   the   arbitration   agreement   has   been discharged   under   Clause   6.7.2.0   of   the   GCC   and  no longer existed / subsisted. As observed hereinabove, the claims   had   been   settled   or   not   is   a   debatable   and disputable question, which is to be left to be decided by the Arbitral Tribunal. Therefore, matters related to the Notified Claims in the facts and circumstances of the case   also   shall   have   to   be   left   to   be   decided   by  the Arbitral Tribunal as in the fact situation the aspect of ‘accord and satisfaction’ and ‘Notified Claims’ both are interconnected and interlinked.  13.2 Now, so far as the Civil Appeal No.342/2022 arising out of  SLP  (C)  No.13816/2019   is   concerned,  the   General Manager in exercise of powers under Clause 9.0.2.0 had declared that none of the claims of the respondent is a Notified   Claim.   From   the   communication   dated 22.06.2018, it appears that the General Manager, after elaborately dealing with all the alleged Notified Claims of the respondent has thereafter found that none of the claims made by the respondent is a Notified Claim. On a conjoint reading of the relevant clauses of the GCC viz. Clauses 9.0.1.0 and 9.0.2.0, the dispute arising out of Notified Claims only, which is included in the Final Bill of the contractor can be referred to arbitration. However, as   per   Clause   9.0.2.0,   any   dispute   or   difference   on whether   or   not   a   claim   sought   to   be   referred   to // 63 // arbitration by the contractor is a Notified Claim falls within   the   excluded   matters   and   the   Arbitrator   or Arbitral   Tribunal   shall   have   no   jurisdiction   and/or authority with respect thereto. The dispute or difference whether   or   not   a   claim   sought   to   be   referred   to arbitration by the contractor is a Notified Claim shall not and cannot form the subject matter of any reference or submission to arbitration. Therefore, on a fair and conjoint reading of Clause 9.0.1.0 and 9.0.2.0, it can safely be concluded that (i) only the Notified Claims of the   contractor   included   in   the   Final   Bill   of   the contractor in accordance with the provisions of Clause 6.6.3.0   shall   have   to   be   referred   to   arbitration;   (ii) whether   or   not   a   claim   sought   to   be   referred   to arbitration by the contractor is a Notified Claim or not, the   Arbitrator   or   Arbitral   Tribunal   shall   have   no jurisdiction   at   all;   (iii)   whether   or   not   a   claim   is   a Notified Claim or not shall have to be decided by the General   Manager   and   that   too,   prior   to   arbitration proceeding   with   or   proceeding   further   with   the reference. Therefore, once the General Manager, on the basis   of   the   material   on   record   takes   a   conscious decision that a particular claim sought to be referred to arbitration   is   not   a   Notified   Claim,   such   a   claim thereafter   cannot   be   referred   to   arbitration.   The language used in Clauses 9.0.1.0 and 9.0.2.0 is very clear and unambiguous.  // 64 // 13.3 As observed hereinabove, parties to the contract are free to agree on applicability of (1) proper law of contract, (2) proper law of arbitration agreement and (3) proper law of the conduct of arbitration. Parties to the contract also may   agree   for   matters   excluded   from   the   purview   of arbitration. As observed by this Court in a catena of decisions,   unless   the   effect   of   agreement   results   in performance of an unlawful act, an agreement, which is otherwise legal, cannot be held to be void and is binding between the parties. At this stage, the decision of this Court   in   the   case   of  Sreekanth   Transport   (supra)   is required to be referred to. In the case before this Court, the contract provided for exclusion of some matters from the   purview   of   arbitration.   A   senior   officer   of   the department   was   given   the   authority   and   power   to adjudicate the same. One of the clauses provided that the decision of the Senior Officer, being the Adjudicator, shall   be   final   and   binding   between   the   parties.   This Court considered the same as ‘excepted matters’. In the aforesaid decision, it is observed and held in paragraph 3 as under:  “3. “Excepted   matters”   obviously,   as   the   parties agreed, do not require any further adjudication since the agreement itself provides a named adjudicator ­ concurrence   to   the   same   obviously   is   presumed   by reason of the unequivocal acceptance of the terms of the contract by the parties and this is where the courts have found out lacking in its jurisdiction to entertain an application for reference to arbitration as regards the   disputes   arising   therefrom   and   it   has   been   the // 65 // consistent  view that in the event the claims arising within   the   ambit   of   excepted   matters,   question   of assumption of jurisdiction of any arbitrator either with or   without   the   intervention   of   the   court   would   not arise; The parties themselves have decided to have the same adjudicated by a particular officer in regard to these matters: what are these exceptions however are questions of fact and usually mentioned in the contract documents and forms part of the agreement as such there is no ambiguity in the matter of adjudication of these specialised matters and termed in the agreement as the excepted matters.” 13.4 In that view of the matter, the High Court has misread and misinterpreted the clauses 9.0.1.0 and 9.0.2.0 and has   seriously   erred   in   holding   that   where   there   is contestation  or   the   decision  rendered   by   the   General Manager leaves scope for argument as to whether the claims alleged by the contractor can be categorized as Notified Claim is best left to the Arbitral Tribunal. The dispute whether the claim is a Notified Claim or not is specifically excluded from the scope, purview and ambit of   the   arbitration   agreement.   Therefore,   once   such   a dispute falls within the ‘excepted matters’, any decision by the General Manager on the issue of Notified Claims cannot be the subject matter of arbitration proceeding.  13.5 Therefore,   the   High   Court   has   erred   in   referring   the dispute to arbitration and appointing a sole Arbitrator to adjudicate   on   the   dispute   with  respect  to  the   claims which as such are held to be not Notified Claims by the General   Manager.   Therefore,   the   Civil   Appeal // 66 // No.342/2022 arising out of SLP (C) No.13408/2019 as well   as   Civil   Appeal   Nos.343/2022   and   345/2022 arising out of SLP (C) Nos.13813/2019 and 13816/2019 respectively   deserve   to   be   allowed   and   the   impugned judgment   and   orders   passed   by   the   High   Court   in respective arbitration petitions deserve to be quashed and set aside.  13.6 So far as the Civil Appeal No.344/2022 arising out of SLP   (C)   No.13815/2019   arising   out   of   the   impugned judgment   and   order   passed   by   the   High   Court   in Arbitration Petition No.407/2018 is concerned, as the General   Manager   himself   has   declared   that   only   one claim of the respondent was / is a Notified Claim, the said appeal is to be allowed partly by observing that the claim which is declared by the General Manager as a Notified   Claim   only   shall   have   to   be   referred   to arbitration   and   the   learned   Arbitrator   shall   have   no jurisdiction to adjudicate the disputes with respect to other claims which as such are not declared as Notified Claims by the General Manager.  14. In view of the above and for the reasons stated above, following order is passed.  (1) Civil   Appeal   No.341/2022   arising   out   of   the impugned judgment and order passed by the High Court   in   Arbitration   Petition   No.115/2018   is // 67 // hereby dismissed. However, it is observed that the learned Arbitrator shall first decide the aspect with regard   to   ‘accord   and   satisfaction’   of   the   claims and   arbitrability   of   the   disputes   with   regard   to such   claims   by   deciding   an   application   under Section 16 of the Arbitration Act, which is reported to  be  pending.  The   learned   Arbitrator   shall first decide the jurisdiction of the Arbitral Tribunal and the arbitrability of the claims within a period of three months from the date of first sitting which shall be within a period of one month from today. All the contentions and/or defences which may be available to the respective parties are kept open to be   considered   by   the   learned   Arbitrator   in accordance with law and on its own merits and considering   the   relevant   clauses   of   the   contract and the material on record. (2) Civil   Appeal   No.342/2022   arising   out   of   the impugned judgment and order passed by the High Court   in   Arbitration   Petition   No.356/2018   is hereby   allowed.   Impugned   judgment   and   order passed by the High Court in Arbitration Petition No.356/2018   referring   the   dispute   between   the parties to arbitration and appointing the Arbitrator is hereby quashed and set aside.   (3) Similarly, Civil Appeal No.343/2022 arising out of // 68 // the impugned judgment and order passed by the High   Court   in   Arbitration   Petition   No.116/2018 and Civil Appeal No.345/2022 arising out of the impugned judgment and order passed by the High Court   in   Arbitration   Petition   No.406/2018   are allowed   and   consequently,   the   impugned judgments and orders passed by the High Court in Arbitration Petition Nos.116/2018 & 406/2018 are hereby quashed and set aside.  (4) So far as Civil Appeal No.344/2022 arising out of the impugned judgment and order passed by the High Court in Arbitration Petition No.407/2018 is concerned,   the   same   is   partly   allowed.   The impugned judgment and order passed by the High Court   in   Arbitration   Petition   No.407/2018   is hereby modified to the extent and it is directed that only one claim of the respondent which is declared by the General Manager as a Notified Claim shall have to be referred to arbitration and the learned Arbitrator shall adjudicate only that claim which is declared   by   the   General   Manager   as   a   Notified Claim and the learned Arbitral Tribunal shall not have any jurisdiction to adjudicate on any other claims which as such are not declared as Notified Claims. In the facts and circumstances of the case, // 69 // there shall be no order as to costs.  ……………………………….J.       [M.R. SHAH]       ……………………………….J.              [B.V. NAGARATHNA]  NEW DELHI; JULY 20, 2022.