Decided on February 07,2019

R.M. Sattaiappan Appellant


Soumen Sen,J. - (1.) This is an application under section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.
(2.) In view of the amended provisions of 1996 Act, namely, section 11(6A), the Court is only required to confine its attention to the existence of an arbitration agreement. The scope of inquiry in such matters have been lucidly explained in the case of Duro Felguera, S.A. Vs. Gangavaram Port Limited, reported in (2017) 9 SCC 729 . In paragraph 59 Justice Kurian Joseph in His Lordship's concurring judgment has held:- "59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. and Boghara Polyfab. This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6-A) ought to be respected."
(3.) There cannot be any iota of doubt that the parties have entered into an agreement which contains an arbitration clause. Although in the affidavit in opposition it has been stated on behalf of the respondents that the work could not be ultimately awarded due to the non- availability of land and hence there is no concluded contract, this Court is unable to accept such submission on fundamental difference being that the inability to furnish the land after acceptance of bank guarantee relates to performance of contract and does not affect the existence of the contract. The terms of the contract are governed by the General Conditions of Contract. Clause 25 of the contract document refers to an arbitration clause. Whether the acceptance of the bank guarantee by the petitioner due to inability of the respondent to provide land would discharge the respondent authorities from any liability is a matter to be decided by the learned Arbitrator. Even under the un- amended provisions the Hon'ble Supreme Court in National Insurance Company Limited v. Boghara Polyfab Private Limited; (2009) 1 SCC 267 has held that these kinds of disputes should be left to the Arbitrator. In Boghara Polyfab (supra) it is stated:- "22. Where the intervention of the court is sought for appointment of an Arbitral Tribunal under Section 11, the duty of the Chief Justice or his designate is defined in SBP and Co. This Court identified and segregated the preliminary issues that may arise for consideration in an application under Section 11 of the Act into three categories, that is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he can also decide, that is, issues which he may choose to decide; and (iii) issues which should be left to the Arbitral Tribunal to decide. 22.1 The issues (first category) which the Chief Justice/his designate will have to decide are: (a) Whether the party making the application has approached the appropriate High Court. (b) Whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act, is a party to such an agreement. 22.2 The issues (second category) which the Chief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal) are: (a) Whether the claim is a dead (long-barred) claim or a live claim. (b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection. 22.3 The issues (third category) which the Chief Justice/his designate should leave exclusive to the Arbitral Tribunal are: (i) Whether a claim made falls within the arbitration clauses (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration. Under such circumstances, by consent of the parties, Shri Jag Mohan Lal, former Additional Director General, Central Public Works Department, 121, Ankur Apartments, 7, 1/P Extension Delhi - 110 092, is appointed as the sole Arbitrator to adjudicate the disputes between the parties.;

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