Bombay High Court

Tata Capital Limited (Formerly Known As ... vs Priyanka Communications (India) Pvt ... on 15 October, 2024

2024:BHC-OS:16394

carap168-23.doc

Digitally
signed by
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TRUSHA
TRUSHA TUSHAR
TUSHAR MOHITE
MOHITE Date:
2024.10.15
ORDINARY ORIGINAL CIVIL JURISDICTION
18:39:27
+0530
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION APPLICATION NO.168 OF 2023

Tata Capital Limited .. Applicant

Versus

Priyanka Communications (India) Pvt. Ltd.
And Ors. .. Respondents

Mr.Rohan Savant a/w Mr.Sachin Chandarana a/w Mr.Aagam Mehta
a/w Mr.Amol Rasal i/b M/s.Manilal Kher Ambalal & Co. Advocate for
the Applicant.

Mr.Pankaj Sawant, Sr.Counsel a/w Mr.Jehaan Mehta, Mr.Rehmat
Lokhandwala, Mr.Hrishikesh Nadkarni and Mr.Premlal Krishnan i/b
M/s.PAN India Legal Services LLP, Advocate for the Respondents.

CORAM: FIRDOSH P. POONIWALLA, JJ.
RESERVED ON: SEPTEMBER 12, 2024
PRONOUNCED ON: OCTOBER 15, 2024

JUDGEMENT :

1. This Application is filed under the provisions of
Section 11
of the

Arbitration and Conciliation Act, 1996 ("the Act") seeking appointment of an

Arbitrator under the Arbitration Agreement contained in the Sanction Letter

dated 19th August 2019 signed between the parties.

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2. The case of the Applicant is as follows:

a) In 2015, Respondent No.1 approached the Applicant requesting

it to grant financing facilities to Respondent No.1 to meet its daily

business requirements. The Applicant and Respondent No.1 had a

working business relationship and the Applicant had sanctioned in

favour of Respondent No.1 various loans towards inventory funding

and working capital requirements.

b) One such facility was a Working Capital Demand Loan for a sum

of Rs.30 Crores ("WCDL") in respect of which the Applicant issued a

Sanction Letter dated 17th May 2017. The said Sanction Letter was

signed by the Respondents. Pursuant to the said sanction,

Respondent No.1 and the Applicant executed WCDL Agreement dated

17th May 2017, which was renewed from time to time. Respondent

Nos.2 and 3 furnished personal guarantees in terms of the WCDL

facility.

c) Thereafter, a consortium arrangement was formed for loans

extended to Respondent No.1 by lenders by executing a Working

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Capital Consortium Agreement dated 31 st August 2017 ("the

Consortium Agreement"). The Consortium Agreement was executed

between Union Bank of India (lead bank), Cosmos Co-operative Bank

Ltd., Axis Bank Ltd., Indian Bank and PNB Investment Services Ltd.

was appointed as the Trustee.

d) The sanctioned limits for the WCDL were modified from time to

time. Thereafter, the Respondents issued a letter dated 29 th January

2018 to the Applicant stating that all the terms and conditions in the

WCDL Agreement would be binding on all of them despite such

modification in limits. By a Deed of Accession dated 23 rd February

2018, the Applicant was inducted into the Consortium Agreement.

e) A Supplemental Inter Se Agreement dated 30 th May 2018 was

executed between the Applicant and other lenders to the Consortium

Agreement setting out the inter se rights between the lenders

including the Applicant.

f) Thereafter, the sanctioned limits of the WCDL were modified

and a renewed WCDL Agreement dated 2 nd August 2018 was entered

into between the Applicant and Respondent No.1. Respondent Nos.2

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and 3 executed Personal Guarantees in respect of the same, which

were continuing guarantees and provided liberty to the Applicant to

proceed independently against Respondent Nos.2 and 3.

g) Indian Bank issued a "no dues" letter to the consortium and

exited the Consortium Agreement. Resultantly, a new Deed of

Accession dated 19th November 2018 was entered into between the

lenders including the Applicant.

h) A letter dated 16th August 2019 was addressed by Respondent

No.1 to the Applicant requesting grant of onetime ad-hoc facility of

Rs.5,60,00,000/-, over and above the existing facility in respect of

which the Loan Agreement existed. The Respondents confirmed that

the new loan would be governed by the terms and conditions in the

WCDL Agreement and the guarantees issued by Respondent Nos.2

and 3 would also cover the new loan.

i) The Applicant issued a letter dated 19 th August 2019 sanctioning

the one-time temporary Limit Finance for Rs.5,60,00,000/-. The

said Sanction Letter was unconditionally signed by all the

Respondents. Under the terms of the said Sanction Letter, the said

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loan amount was to be repaid within 90 days from the date of

disbursement i.e. on or before 19th November 2019. Clause (k) of the

said Sanction Letter contained an Arbitration Agreement between the

parties and reads as follows:

"(k) All disputes, differences or claims arising out of these presents or as
to the construction, meaning or effect thereof or as to the rights and liabilities of
the parties hereunder shall be settled by arbitration to be held in Mumbai in
accordance with the provisions of the
Arbitration and Conciliation Act, 1996
or
any statutory amendments thereof or any statute enacted for replacement
thereof and shall be referred to the sole arbitration of a person to be appointed
by us. In the event of death, refusal, neglect, inability or incapability of the
person appointed to act as arbitrator, we may appoint another arbitrator. The
award including interim award/s of the arbitrator shall be final and binding on
all parties concerned. The arbitrator may lay down from time to time the
procedure to be followed by him in conducting arbitration proceedings in such
manner, as he considers appropriate."

j) On 21st August 2019, the disbursement under the said facility was

made by the Applicant to Respondent No.1.

k) The Applicant addressed an email dated 12 th February 2020 to

Respondent No.3 calling upon him to make payments of all the due

and overdue amounts urgently.

l) As no response was received from any of the Respondents, the

Applicant, through its Advocate's letter dated 17 th March 2020,

addressed to all the Respondents recalled all loan facilities extended

to the Respondents, including the one-time temporary limit facility,

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and called upon them to jointly and severally pay Rs.37,61,45,284/-

with interest which was due as on 4 th February 2020. On 23 rd May

2020, a Notice under
Section 13(2)
of the Securitization and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 ("
SARFAESI Act
") was issued by the Applicant to

the Respondent. On 20th July 2020, a reply was sent by the

Respondents to the Applicant denying that its account was a non-

performing asset.

m) On 22nd September 2020, the Applicant filed Commercial

Summary Suit (O.S.No.87 of 2022) in this Court for an amount of

Rs.36,10,74,412.84. Further, on 7th December 2020, the consortium

filed an Application under
Section 14
of the SARFAESI Act.

n) The Applicant filed a Petition, being Commercial Arbitration

Petition (L) No.3628 of 2020, under
Section 9
of the Act for securing

Rs.6,70,35,020.95 payable by the Respondents under the One-Time

Temporary Limit Facility before this Court. By an Order dated 12 th

March 2021, this Court granted interim reliefs in favour of the

Applicant whereby the Respondents were directed to deposit a sum of

Rs.5,60,00,000/- and additionally were also directed to disclose their

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assets. Further, Respondent No.1 was restrained from transferring,

alienating, parting with possession or further encumbering any of its

assets.

o) The Applicant, through its Advocates, addressed a letter dated 6 th

April 2021 to the Respondents invoking Arbitration under Clause (k)

of the Sanction Letter dated 19th August 2019. The Applicant also

suggested two names for appointment as Arbitrators. The said letter

was duly served on all the Respondents. The Respondents replied to

the said letter dated 6 th April 2021 by their letter dated 20 th April 2021

whereby the Respondents refused to appoint an Arbitrator.

p) On 8th June 2021, the present Application was filed for

appointment of an Arbitrator.

q) On 4th August, 2021, this Court dismissed the Review Petition

filed by the Respondents seeking a review of the Order dated 12 th

March 2021 passed in the
Section 9
Petition filed by the Applicant.

r) On 19th August 2021, the Hon'ble Supreme Court passed an

Order in the SLP filed challenging the said Order dated 4 th August

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2021 wherein it recorded that in view of the statement made by the

learned counsel for the Applicant (Respondent in the SLP) that they

would not press for the execution of the Order dated 12 th March 2021

till the next date, no interim orders were required to be passed in the

matter.

s) On these facts, Mr.Rohan Savant, the learned counsel appearing

on behalf of the Applicant, submitted that there is a valid arbitration

agreement between the parties as contained in Clause (k) of the

Sanction Letter dated 19th August 2019, that disputes and differences

have arisen between the parties and the Applicant has invoked the

arbitration agreement between the parties by its Advocates letter

dated 6th April 2021.

t) Mr.Rohan Savant further submitted that, in these circumstances,

the present Application ought to be allowed and an Arbitrator be

appointed in order to arbitrate upon all the disputes and differences

arising between the parties under the said Sanction Letter dated 19 th

August 2019.

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3. The Respondents have filed an Affidavit in Reply dated 11 th September

2023 opposing the present Application. On the basis of this Affidavit in

Reply, Mr.Pankaj Sawant, the learned Senior Counsel appearing on behalf of

the Respondents, submitted that the disputes sought to be referred to

Arbitration by the present application are non-arbitrable as the same are

barred by the provisions of the
SARFAESI Act
and the Recovery of Debts due

to Banks and Financial Institutions Act, 1993 ("RDDB Act"). In this context,

Mr.Pankaj Sawant submitted that the present Application was expressly

barred under
Section 34
of the SARFAESI Act. He submitted that the

Applicant had already initiated proceedings under the
SARFAESI Act
, which

provides a statutory remedy for secured creditors. Upon invoking the

remedies under the special statute, the Applicant cannot now resort to

private adjudication by making an artificial bifurcation of the loan amounts

to suit its convenience. Further, Mr.Pankaj Sawant submitted that, as per

Section 13(10)
of the SARFAESI Act, a secured creditor must exhaust the

statutory remedies available under the
SARFAESI Act
, and a secured creditor

can only initiate civil proceedings for any margin left recoverable after

exhausting the remedies under the
SARFAESI Act
. Therefore, it was not

open for the Applicant to elect the remedies in any manner whatsoever.

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4. Mr.Pankaj Sawant also submitted that the present Application is

barred by RDDB Act. He submitted that
Section 18
of the Act confers

exclusive jurisdiction on the DRT for disputes involving debt recovery by the

financial institutions. He submitted that the Applicant is a part of a

consortium and qualifies as a financial institution under the RDDB Act. As a

consortium member and a financial institution, the Applicant could have

filed an Application in the DRT under Sections 17 to 19 of the RDDB Act.
In

support of his submissions, Mr.Pankaj Sawant relied upon the judgement of

the Division Bench of this Court in
Naresh J. Doshi and Others vs. Reserve

Bank of India and Others1
.

5. Mr.Pankaj Sawant further submitted that the cause of action in the

Summary Suit filed by the Applicant and in the present Application is the

same, and, by filing the Summary Suit, the Applicant had waived its right to

arbitration and the same is barred.

6. In this context, Mr.Pankaj Sawant submitted that there is one loan

agreement, namely the Working Capital Demand Loan Agreement dated 29 th

November 2018, one loan account and only one demand notice was issued by

the Applicant. He submitted that the Sanction Letter dated 19 th August 2019

refers to the WCDL Agreement dated 29th November 2018 which is also the
1 2021 SCC OnLine Bom 11655

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subject matter of the Summary Suit and states that all securities provided

under the loan agreements would stand as security for the repayment of One

Time Temporary Limit Facility. Further, the Demand Notice is a composite

demand issued for both facilities wherein a single amount of

Rs.37,61,45,284/- is claimed and One-Time Temporary Limit Facility is also

mentioned. He submitted that no bifurcation of the claim is made in the

Demand Notice, demonstrating that the claims are identical and inseparable.

7. Mr.Pankaj Sawant further submitted that the conjoint reading of the

averments in the Summary Suit and the Application filed by the Applicant

under
Order II Rule 2 of the Code of Civil Procedure
, 1908, demonstrates

that it is the Applicant's express case that the cause of action for the

Summary Suit and the present Arbitration Application is the same.

8. By initiating that Suit based on the same cause of action, the

Applicant has waived its right to arbitration. In this context, Mr.Pankaj

Sawant relied upon the judgement of this Court in Onyx Musicabsolute com

Pvt.Ltd. &
Ors. vs. Yash Raj Films Pvt. Ltd. And Ors2
.

9. Mr.Pankaj Sawant further submitted that the Applicant's attempt to

pursue SARFAESI proceedings, the Summary Suit and the Arbitration
2 (2008) SCC OnLine Bom 636

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constitutes impermissible forum shopping and would lead to multiplicity of

proceedings, resulting in conflicting judgements from different forums on

the same set of facts, which is against public policy and judicial propriety. He

submitted that the Applicant, being part of the Consortium, cannot be

permitted to bypass statutory remedies while others are following them as

this creates an uneven playing field.

10. In response to these submissions, Mr.Rohan Savant submitted that

none of the issues raised by the Respondents can be gone into by the Court

under
Section 11
of the Act as the scope of enquiry in an Application under

Section 11
of the Act is expressly limited and narrow. He submitted that, in

an Application under
Section 11
, the Court only deals with the examination of

the existence of the Arbitration Agreement. This examination is also done

only on prima facie basis. No other contentions or issues are considered by

the Court at this stage. He submitted that even the issue concerning the

validity of the arbitration agreement beyond formal validity, such as the

agreement being in writing, cannot be dealt with by the Court while

considering the Application under
Section 11
of the Act.

11. Mr.Rohan Savant, further submitted that the test
laid down by
the

Hon'ble Supreme Court in
Vidya Drolia and Others vs. Durga Trading

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Corporation3, such as deadwood, ex facie frivolous and / or the test
laid

down by
the Supreme Court in
NTPC Limited vs. SPML Infra Limited
4, being

the eye of the needle test, have now being rejected by the Hon'ble Supreme

Court in view of the judgement of the 7 Judge Bench of the Hon'ble Supreme

Court in the case of Interplay between Arbitration Agreements under

Arbitration and Conciliation Act, 1996
and
Stamp Act, 1899
, In Re 5 and as

explained by the Hon'ble Supreme Court in SBI General Insurance Co.Ltd.
vs.

Krish Spinning,6 which specifically considers the effect of the decision in the

case of Interplay (Supra) on the scope of powers of the referral Court under

Section 11
of the Act.

12. Without prejudice to this submission, as regards the contention of the

Respondents with respect to the non-arbitrability of the dispute on account of

the fact that the Applicant had been notified as a financial institution under

Section 2(1) (m)(iv)
of the SARFAESI Act, Mr. Rohan Savant submitted that,

merely because the Applicant had been notified as a financial institution

under the
SARFAESI Act
, would not result in the claim being made by the

Applicant becoming non-arbitrable. This was in view of the provisions of the

SARFAESI Act
, and more particularly
Sections 35
and
thereof. He

3 (2021) 2 SCC 1
4 (2023) 9 SCC 385
5 (2024) 6 SCC 1
6 (2024) SCC OnLine 1754

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submitted that
Section 37
of the SARFAESI Act, in no uncertain terms,

provides that it is in addition to, and not in derogation of, other laws for the

time being in force. Hence, the proceedings under the Act can be continued

by a financial institution even when the financial institution institutes or is

entitled institute proceedings under the
SARFAESI Act
.

13. Mr.Rohan Savant submitted that the issue of arbitrability and

simultaneous institution of proceedings under the Act and proceedings under

the
SARFAESI Act
by financial institutions have been dealt with by the

Hon'ble Supreme Court in the cases of
M.D.Frozen Foods Exports Pvt. Ltd.&

Ors. vs. Hero Fincorp Ltd.7and India Bulls Housing Finance Ltd.
vs. Deccan

Chronicle Holdings Ltd. & Ors.8 He further submitted that the aforesaid

judgments had been considered by this Court in the case of
Tata Motors

Finance Solutions Ltd. vs. Naushad Khan
9.

14. Mr.Rohan Savant submitted that the said judgements clearly

demonstrate that a financial institution is entitled to simultaneously proceed

under the
SARFAESI Act and the Act
.

7 (2017) 16 SCC 41
8 (2018) 14 SCC 783
9 (2023) SCC OnLine BOM 2716

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15. Mr.Rohan Savant further submitted that the Respondents have also

sought to make reference to Transferred Original Application No.210 of

2023 filed under the provisions of the RDDB Act before the DRT, Mumbai

against the Respondents to contend that, in light of the said Application,

Arbitration Proceedings were not maintainable. Mr. Rohan Savant submitted

that this contention again is erroneous. The said Original Application has

been filed by Union Bank of India, Cosmos Co-operative Bank Limited, Axis

Bank Ltd. and State Bank of India. The claim raised in the Original

Application is in respect of the claim made by the said Banks. This is

apparent from the particulars of claim at Annexure U of the Original

Application. He further submitted that the Original Application specifically

mentioned that the Applicant was only a proforma party. He submitted that

the claims of the Applicant were not a part of the Original Application filed

before the DRT, Mumbai.

16. Further, Mr. Rohan Savant submitted that it is undisputed that the

Applicant cannot take action under the RDDB Act. This is because the

Applicant, as a Non Banking Financial Institution, is not notified under the

RDDB Act. The notification under the
SARFAESI Act
does not entitle the

Applicant to file proceedings before the DRT under the RDDB Act.

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17. Mr Rohan Savant further submitted that the next contention raised

by the Respondents was that the Applicant had relinquished / waived the

Arbitration Clause contained in the Sanction Letter dated 19 th August 2019.

Mr. Rohan Savant submitted that it is settled law that issues of waiver and

acquiescence are issues on facts and such issues cannot be raised in an

Application under
Section 11
of the Act. Further, he submitted that the prior

filing of the Commercial Summary Suit would not, in any manner, entitle a

waiver or relinquishment of the Arbitration Clause in the present

Application. He submitted that this was because firstly, on facts, the claim

made in the said Commercial Summary Suit is distinct and separate from the

claim raised in the
Section 11
Application. He further submitted that, even in

law, merely because a party has filed a prior suit, would not disentitle such a

party from filing subsequent arbitration proceedings. In view of
Section 8
of

the Act, the Defendants in the Commercial Summary Suit are at liberty to file

an Application for reference of the dispute to Arbitration. Equally, the

Plaintiff was entitled to withdraw a Suit prior to the Defendants filing their

first statement on the substance of the dispute.
In support of this submission,

Mr. Rohan Savant relied upon the judgement of this Court in
Priya Rishi

Bhuta and Another vs. Vardhaman Engineers and Builders and Others
10 .

10 2022 SCC OnLine BOM 1136

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18. Mr. Rohan Savant further submitted that, even on facts, the case of

waiver set up by the Respondents was completely misconceived and

erroneous. The claim made in the Commercial Summary Suit No.87 of 2022

against the Respondents pertained to a separate facility, i.e. the Working

Capital Demand Loan Facility for a sum of Rs.30 crores. The said Suit does

not include the claim which would be made by the Applicant in the

Arbitration proceedings before the Arbitrator, which solely relates to the

Sanction Letter dated 19th August 2019. He submitted that this is apparent

from a bare perusal of the Plaint. He further submitted that the contents of

the Plaint in the said Suit make it apparent that the claim made in the said

Suit is distinct and separate from the claim made in the present Arbitration

Application.

19. In response to the submissions of Mr.Rohan Savant, Mr.Pankaj

Sawant, on behalf of the Respondents, submitted that this Court had the

jurisdiction to decide on the objection of non-arbitrability of claims at the

stage of hearing of the
Section 11
Application.
In support of his submissions,

he relied upon the judgements of the Hon'ble Supreme Court in
Vidya Drolia

and Others
(Supra) and
M.Hemalata Devi and Others vs. B. Udayasri
.
Mr.Pankaj Sawant further submitted that the Applicant's reliance on the

judgements of the Hon'ble Supreme Court in Interplay (Supra) and SBI
11 (2024) 4 SCC 255

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General Insurance Co.Ltd. (Supra) was misplaced as the said judgments were

based on different facts.

20. Mr. Pankaj Sawant further submitted that the Applicant's reliance on

the judgment of
Tata Motors Finance Solutions Ltd.
(Supra) was misplaced

as the said judgement was a judgement of a Single Judge of this Court and

did not take into consideration the judgement of the Division Bench of this

Court in
Naresh J. Doshi and Others
(Supra)12. He further submitted that,

even otherwise,the judgement was distinguishable as, in the facts of that case,

there was no pending suit or consortium, as in the present case, and it was

not clear whether SARFAESI action was adopted.

Further, Mr.Pankaj Sawant

also submitted that, similarly, the reliance by the Applicant on
Indiabulls

Housing Finance Ltd.
(Supra) was misplaced as the issue
in that case
was

entirely different and
,
in that case
, the action under the
SARFAESI Act
was

challenged because of arbitration proceedings. He submitted that a

distinction must be drawn between cases where arbitration proceedings were

initiated first, followed by actions under the
SARFAESI Act
by the banks, and

cases where SARFAESI proceedings were initiated prior to arbitration. He

submitted that, whilst there was no bar under the
Arbitration Act
against the

application of the
SARFAESI Act
or any other statute,
Section 34
of the

SARFAESI Act expressly barred the initiation of other proceedings, including
12 (2021) SCC OnLine BOM 11655

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those before any Court or Tribunal in respect of matters which DRT is

empowered to determine under the Act. Therefore, once proceedings under

the
SARFAESI Act
had been initiated, the jurisdiction of the Civil Courts and

Arbitral Tribunal is ousted and the dispute must be adjudicated exclusively

by the forum designated under the
SARFAESI Act
.

Mr.Pankaj Sawant

further submitted that, whilst the Applicant relied on the judgement in the

case of
M.D.Frozen Food Exports Pvt. Ltd. & Ors.
(Supra) to argue that

SARFAESI proceedings can continue alongside arbitration, the Hon'ble

Supreme Court, in
Vidya Drolia and Others
(Supra), clarified that
M. D.

Frozen Food Exports Pvt. Ltd.
(Supra) does not apply to the issue of non-

arbitrability under the
SARFAESI Act
. The Hon'ble Supreme Court held that

statutory remedies under SARFAESI are non-arbitrable and that continuing

arbitration alongside SARFAESI proceedings would undermine the specific

rights conferred under the
SARFAESI Act
.

21. Further, as far as the judgement in
Priya Rishi Bhuta and Another

(Supra) relied upon by the Applicant was concerned, Mr. Pankaj Sawant

submitted that
,
in that case
, the cause of action in the civil proceedings and

the arbitral proceedings were different, whilst, in the present case, the cause

of action and relief sought were inseparable and the same.

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Analysis and Findings

22. I have heard the learned Counsel for the parties and perused the

documents on record.

23. The issue that needs consideration first is whether this Court, in an

Application under
Section 11
of the Act, can go into the objections raised by

the Respondents.

24. To consider this issue,
Section 11(6A)
of the Act is relevant and reads

as under:

"(6A) The Supreme Court or, as the case may be, the High Court, while
considering any application under sub-section (4) or sub-section (5) or sub-

section (6), shall, notwithstanding any judgment, decree or order of any Court,
confine to the examination of the existence of an arbitration agreement."

25. It is pertinent to note that sub-
section 6(A)
of
Section 11
was omitted

by
Section 3(v)
of the Arbitration and Conciliation (Amendment) Act, 2019.

However, the same has not been notified, and, therefore, subsection 6(A) of

Section 11
continues to remain in force.

26. Further, to consider this issue, the judgements relied upon by the

parties, in the context of this issue, would have to be considered. The

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judgments relied upon by the parties and the relevant paragraphs are set out

here under:

a) Paragraph No.154 of the judgement of the Hon'ble Supreme Court in

Vidya Drolia and Others
(Supra) is relevant and is set out here under:

"154. Discussion under the heading "Who Decides Arbitrability?" can be
crystallised as under:

154.1. Ratio of the decision in Patel Engg. Ltd. on the scope of judicial review by
the court while deciding an application under
Sections 8
or 11 of the
Arbitration
Act
, post the amendments by Act 3 of 2016 (with retrospective effect from 23-
10-2015) and even post the amendments vide Act 33 of 2019 (with effect from
9-8-2019), is no longer applicable.

154.2. Scope of judicial review and jurisdiction of the court under
Sections 8

and
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
competence-competence, is that the Arbitral Tribunal is the preferred first
authority to determine and decide all questions of non-arbitrability. The court
has been conferred power of "second look" on aspects of non-arbitrability post
the award in terms of sub-clauses ( i), (ii) or (iv) of
Section 34(2)(a)
or sub-
clause (i) of
Section 34(2)(b)
of the Arbitration Act.

154.4. Rarely as a demurrer the court may interfere at
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 non-arbitrable, 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 "non-
arbitrable" and to cut off the deadwood. The court by default would refer the
matter when contentions relating to non-arbitrability 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."

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b) Paragraph Nos.92 and 93 of the judgement of the Hon'ble Supreme

Court in
Indian Oil Corporation Limited vs. NCC Limited
13 are relevant and

are set out here under:

"92. However, at the same time, we do not agree with the conclusion arrived at
by the High Court that after the insertion of sub-section (6-A) 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.

93. 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 non-arbitrability, 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 non-arbitrable 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."

c) Paragraph Nos.15 to 17 and 44 to 51 of the judgement of the Hon'ble

Supreme Court in
M.Hemalata Devi and Others
(Supra) are relevant and are

set out here under:

"15. Now before this Court, there is a long line of decisions, including the
decision which had come up post amendment to sub-section (1) of
Section 8

and post insertion of sub-section (6-A) to
Section 11
of the Arbitration Act,
1996, where it has been held that in spite of sub-section (1) to
Section 8
the
Court has to find out not only whether there is an arbitration clause in the
agreement but whether the dispute is arbitrable or not.

16. All disputes are not capable of being referred to arbitration [ "Not all matters
are capable of being referred to arbitration. As a matter of English law certain
matters are reserved for the court alone and if a tribunal purports to deal with
them the resulting award will be unenforceable. These include matters where
the type of remedy required is not one which an Arbitral Tribunal is empowered

13 (2023) 2 SCC 539

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to give." [Russel on Arbitration (22nd Edn.)]] . The nature of certain disputes
may be such that they should never be sent near an arbitration table. To give an
illustration, there would be certain types of criminal matters, matters involving
public corruption, etc. This aspect has been well considered by this Court in

Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.
and it has been held as
under : (SCC pp. 546-47, paras 35-36)

"35. The Arbitral Tribunals are private fora chosen voluntarily by the parties
to the dispute, to adjudicate their disputes in place of courts and tribunals
which are public fora constituted under the laws of the country. Every civil or
commercial dispute, either contractual or non-contractual, which can be
decided by a court, is in principle capable of being adjudicated and resolved
by arbitration unless the jurisdiction of the Arbitral Tribunals is excluded
either expressly or by necessary implication. Adjudication of certain
categories of proceedings are reserved by the legislature exclusively for
public fora as a matter of public policy. Certain other categories of cases,
though not expressly reserved for adjudication by public fora (courts and
tribunals), may by necessary implication stand excluded from the purview of
private fora. Consequently, where the cause/dispute is inarbitrable, the court
where a suit is pending, will refuse to refer the parties to arbitration, under

Section 8
of the Act, even if the parties might have agreed upon arbitration
as the forum for settlement of such disputes.

36. The well-recognised examples of non-arbitrable disputes are : ( i)
disputes relating to rights and liabilities which give rise to or arise out of
criminal offences; (ii) matrimonial disputes relating to divorce, judicial
separation, restitution of conjugal rights, child custody; ( iii) guardianship
matters; (iv) insolvency and winding-up matters; (v) testamentary matters
(grant of probate, letters of administration and succession certificate); and

(vi) eviction or tenancy matters governed by special statutes where the
tenant enjoys statutory protection against eviction and only the specified
courts are conferred jurisdiction to grant eviction or decide the disputes."

17. The exclusion of a dispute from arbitration may be express or implied,
depending again upon the nature of the dispute, and a party to a dispute cannot
be compelled to resort to arbitration merely for the reason that it has been
provided in the contract, to which it is a signatory. The arbitrability of a dispute
has to be examined when one of the parties seeks redressal under a welfare
legislation, in spite of being a signatory to an arbitration agreement. "
The
Consumer Protection Act
" is definitely a piece of welfare legislation with the
primary purpose of protecting the interest of a consumer. Consumer disputes
are assigned by the legislature to public fora, as a measure of public policy.
Therefore, by necessary implication such disputes will fall in the category of
non-arbitrable disputes, and these disputes should be kept away from a private
fora such as "arbitration", unless both the parties willingly opt for arbitration
over the remedy before public fora.

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44. What were then the factors which necessitated an amendment, inter alia, in

Sections 8
and
of the Arbitration Act, 1996 and what was the purpose behind
these amendments? This aspect again has been examined in detail in Emaar-3.
Such amendments were recommended by the Law Commission in its 246th
Report, para 33 of the 246th Report of the Law Commission stated as under:

"33. It is in this context, the Commission has recommended amendments to

Sections 8
and
of the Arbitration and Conciliation Act, 1996. The scope of
the judicial intervention is only restricted to situations where the
court/judicial authority finds that the arbitration agreement does not exist or
is null and void. Insofar as the nature of intervention is concerned, it is
recommended that in the event the court/judicial authority is prima facie
satisfied against the argument challenging the arbitration agreement, it shall
appoint the arbitrator and/or refer the parties to arbitration, as the case may
be. The amendment envisages that the judicial authority shall not refer the
parties to arbitration only if it finds that there does not exist an arbitration
agreement or that it is null and void. If the judicial authority is of the opinion
that prima facie the arbitration agreement exists, then it shall refer the
dispute to arbitration, and leave the existence of the arbitration agreement to
be finally determined by the Arbitral Tribunal. However, if the judicial
authority concludes that the agreement does not exist, then the conclusion
will be final and not prima facie."

45. The Statement of Objects and Reasons of the Arbitration and Conciliation
(Amendment) Bill, 2015 reads as under:

"2.
The Act
was enacted to provide for speedy disposal of cases relating to
arbitration with least court intervention. With the passage of time, some
difficulties in the applicability of the Act have been noticed. Interpretation of
the provisions of the Act by courts in some cases have resulted in delay of
disposal of arbitration proceedings and increase in interference of courts in
arbitration matters, which tend to defeat the object of the Act.

* * *

6. (iv) to provide that while considering any application for appointment of
arbitrator, the High Court or the Supreme Court shall examine the existence
of a prima facie arbitration agreement and not other issues;"

Notes on the Clauses on amendment in
Section 8
read as follows:

"Clause 4 of the Bill seeks to amend
Section 8
of the principal Act to specify
that the judicial authority shall refer the parties to arbitration unless it finds

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that prima facie no valid arbitration agreement exists. A proviso below sub-
section (2) is inserted to provide that where the original arbitration
agreement or certified copy thereof is not available with the party who apply
under sub-section (1), and is retained by the other party, such party shall file
a copy of the arbitration agreement along with application under sub-section
(1) praying to the court to call upon the other party to produce the original
arbitration agreement or its duly certified copy before the court."

On amendment to
Section 11
by inserting sub-section (6-A), the following
was stated:

"Clause 6 of the Bill seeks to amend
Section 11
of the principal Act to provide
that appointment of arbitrator shall be made by the Supreme Court or the
High Court, as the case may be, instead of the Chief Justice of India or the
Chief Justice of the High Court. Sub-section (6-A) is inserted to provide that
the Supreme Court or the High Court while considering application under
sub-sections (4) to (6) shall confine to the examination of an arbitration
agreement."

46. The amendment which was made in
Section 8
of the Arbitration Act, 1996
came up for consideration before this Court in Ameet Lalchand Shah v. Rishabh
Enterprises [Ameet Lalchand Shah v. Rishabh Enterprises, where in paras 28
and 30, it was stated as under : (SCC pp. 697-98)
"28. 'Principally four amendments to
Section 8(1)
have been introduced by
the 2015 Amendments -- ( i) the relevant "party" that is entitled to apply
seeking reference to arbitration has been clarified/amplified to include
persons claiming "through or under" such a party to the arbitration
agreement; (ii) scope of examination by the judicial authority is restricted to
a finding whether "no valid arbitration agreement exists" and the nature of
examination by the judicial authority is clarified to be on a "prima facie"

basis; (iii) the cut-off date by which an application under
Section 8
is to be
presented has been defined to mean "the date of" submitting the first
statement on the substance of the dispute; and ( iv) the amendments are
expressed to apply notwithstanding any prior judicial precedent. The proviso
to
Section 8(2)
has been added to allow a party that does not possess the
original or certified copy of the arbitration agreement on account of it being
retained by the other party, to nevertheless apply under
Section 8
seeking
reference, and call upon the other party to produce the same.' [Ref. : Justice
R.S. Bachawat's Law of Arbitration and Conciliation , Sixth Edn., Vol. I
(
Sections 1
to
) at p. 695 published by Lexis Nexis.]

30. The language of amendment to
Section 8
of the Act is clear that the
amendment to
Section 8(1)
of the Act would apply notwithstanding any
prayer, judgment, decree or order of the Supreme Court or any other court.
The High Court laid emphasis upon the word '... unless it finds that prima
facie no valid agreement exists'. The High Court observed that there is no
arbitration agreement between Astonfield and Rishabh. After referring to

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Sukanya Holdings [Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya
, (2003) 5
SCC 531] and the amended
Section 8
and
Section 45
of the Act, the High
Court pointed out the difference in language of
Section 8
and
Section 45
of
the Act.

The High Court distinguished between
Sukanya Holdings [Sukanya
Holdings (P) Ltd. v. Jayesh H. Pandya
, (
2003) 5 SCC 531] and Chloro
Controls [Chloro Controls India (P) Ltd. v. Severn Trent Water Purification
Inc.
, (2013) 1 SCC 641 : (2013) 1 SCC (Civ) 689] and observed that
Sukanya
Holdings [Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya
, (2003) 5 SCC
531] was not overruled by
Chloro Controls [Chloro Controls India (P) Ltd. v.
Severn Trent Water Purification Inc.
, (2013) 1 SCC 641 : (2013) 1 SCC (Civ)
689] "

47. This Court ultimately held that the main purpose of bringing an amendment
inter alia in
Sections 8
and
of the Arbitration Act, 1996 was to minimise the
scope of judicial authority, which was to refuse reference to arbitration only on
the ground when it prima facie finds that there was no valid arbitration
agreement. The legislative intent for the amendment was confined to limiting
judicial intervention, and once the Court finds that there is a valid arbitration
agreement, it has no option but to refer the matter for arbitration. But this
would not mean that where the matter itself is non-arbitrable, or is covered by a
special legislation such as the
Consumer Protection Act
, it still has to be
referred for arbitration. In para 59 of Emaar-3, it was stated as under : (SCC pp.
781-82)

"59. The amendment in
Section 8
cannot be given such expansive meaning
and intent so as to inundate entire regime of special legislations where such
disputes were held to be not arbitrable. Something which legislation never
intended cannot be accepted as side wind to override the settled law. The
submission of the petitioner that after the amendment the law as
laid down
by
this Court in
National Seeds Corpn. [National Seeds Corpn. Ltd. v. M.
Madhusudhan Reddy
, (2012) 2 SCC 506 : (2012) 1 SCC (Civ) 908] is no more
a good law cannot be accepted. The words 'notwithstanding any judgment,
decree or order of the Supreme Court or any court' were meant only to those
precedents where it was laid down that the judicial authority while making
reference under
Section 8
shall be entitled to look into various facets of the
arbitration agreement, subject-matter of the arbitration whether the claim is
alive or dead, whether the arbitration agreement is null and void. The words
added in
Section 8
cannot be meant for any other meaning."

Emaar-3 though ends with a caveat, where it leaves the option with the party
who may have an option to choose between a public or private forum, may
consciously choose to go for private fora. This is what it says : (SCC p. 783,
para 63)

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"63. We may, however, hasten to add that in the event a person entitled to
seek an additional special remedy provided under the statutes does not opt
for the additional/special remedy and he is a party to an arbitration
agreement, there is no inhibition in disputes being proceeded in arbitration.
It is only the case where specific/special remedies are provided for and which
are opted by an aggrieved person that judicial authority can refuse to
relegate the parties to the arbitration."

48. Thus, in our considered opinion in the case at hand, the Telangana High
Court had adopted the right approach in its two impugned orders, where it
declined to interfere in the matter and appoint an arbitrator.

49. True in Emaar-3 this Court had examined the scope of sub-section (1) to

Section 8
and not of sub-section (6-A) to
Section 11
of the Arbitration Act, 1996.
All the same, the reasoning given in the above judgment would be equally
applicable to
Section 11
application before the High Court. Both the provisions
incorporated in
Section 8
and
Section 11
of the Arbitration Act, 1996 [i.e. sub-
section (1) and sub-section (6-A) respectively], seemingly restrict the scope of
the examination by the courts concerned, in their reference to arbitration, or
appointment of arbitrator, as the case might be, and the language being
common, "notwithstanding any judgment, decree or order" places a similar
question before the two courts.

50. More importantly, when the Principal Civil Court or a judicial authority
such as consumer redressal forum can have powers to dismiss a
Section 8

application on the ground of arbitrability of a dispute, will such powers not be
available with the High Courts? In SBP & Co. v. Patel Engg. Ltd., it was decided
by this Court that both
Section 8
and
Section 11
of the Arbitration Act, 1996 are
complementary provisions.
This position has been reiterated, in the post-
amendment context, in
Vidya Drolia v. Durga Trading Corpn. [Vidya Drolia
v.
Durga Trading Corpn.

51. The application under
Section 11
of the Arbitration Act, 1996 for
appointment of an arbitrator, was not maintainable in the present case, and
consequently we uphold the impugned orders dated 19-5-2022 and 25-11-2022,
which held this position. We refrain from saying anything further on the matter
as the dispute is still sub judice before the State Consumer Forum (appellate
authority). The appeals are hereby dismissed. No order as to costs."

d) Paragraphs Nos.24 to 28 of the judgement of the Hon'ble Supreme

Court in
NTPC Limited
(Supra) are relevant and are set out

hereunder:

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"24. Following the general rule and the principle
laid down in
Vidya Drolia, this
Court has consistently been holding that the Arbitral Tribunal is the preferred
first authority to determine and decide all questions of non-arbitrability.

In

Pravin Electricals (P) Ltd. v. Galaxy Infra & Engg. (P) Ltd.
, Sanjiv Prakash v.

Seema Kukreja, and Indian Oil Corpn. Ltd. v. NCC Ltd.
, the parties were
referred to arbitration, as the prima facie review in each of these cases on the
objection of non-arbitrability was found to be inconclusive.
Following the
exception to the general principle that the Court may not refer parties to
arbitration when it is clear that the case is manifestly and ex facie non-
arbitrable, in BSNL v. Nortel Networks (India) (P) Ltd. (hereinafter "Nortel
Networks") and Secunderabad Cantonment Board v. B. Ramachandraiah &
Sons, arbitration was refused as the claims of the parties were demonstrably
time-barred.

Eye of the needle

25. The abovereferred precedents crystallise the position of law that the pre-
referral jurisdiction of the Courts under
Section 11(6)
of the Act is very narrow
and inheres two inquiries. The primary inquiry is about the existence and the
validity of an arbitration agreement, which also includes an inquiry as to the
parties to the agreement and the applicant's privity to the said agreement.
These are matters which require a thorough examination by the Referral Court.
The secondary inquiry that may arise at the reference stage itself is with respect
to the non-arbitrability of the dispute.

26. As a general rule and a principle, the Arbitral Tribunal is the preferred first
authority to determine and decide all questions of non-arbitrability. As an
exception to the rule, and rarely as a demurrer, the Referral Court may reject
claims which are manifestly and ex facie non-arbitrable. Explaining this
position, flowing from the principles laid down in Vidya Drolia, this Court in a
subsequent decision in Nortel Networks held : (Nortel Networks case, SCC p.
764, para 45)

"45. ... 45.1. ... While exercising jurisdiction under
Section 11
as the judicial
forum, the Court may exercise the prima facie test to screen and knockdown
ex facie meritless, frivolous, and dishonest litigation. Limited jurisdiction of
the Courts would ensure expeditious and efficient disposal at the referral
stage. At the referral stage, the Court can interfere "only" when it is
"manifest" that the claims are ex facie time-barred and dead, or there is no
subsisting dispute."

27. The standard of scrutiny to examine the non-arbitrability of a claim is only
prima facie. Referral Courts must not undertake a full review of the contested
facts; they must only be confined to a primary first review and let facts speak for
themselves. This also requires the Courts to examine whether the assertion on
arbitrability is bona fide or not. The prima facie scrutiny of the facts must lead
to a clear conclusion that there is not even a vestige of doubt that the claim is
non-arbitrable. On the other hand, even if there is the slightest doubt, the rule is
to refer the dispute to arbitration.

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28. The limited scrutiny, through the eye of the needle, is necessary and
compelling. It is intertwined with the duty of the Referral Court to protect the
parties from being forced to arbitrate when the matter is demonstrably non-
arbitrable. It has been termed as a legitimate interference by Courts to refuse
reference in order to prevent wastage of public and private resources . Further,
as noted in Vidya Drolia, if this duty within the limited compass is not
exercised, and the Court becomes too reluctant to intervene, it may undermine
the effectiveness of both, arbitration and the Court. Therefore, this Court or a
High Court, as the case may be, while exercising jurisdiction under
Section 11(6)

of the Act, is not expected to act mechanically merely to deliver a purported
dispute raised by an applicant at the doors of the chosen arbitrator , as explained
in
DLF Home Developers Ltd. v. Rajapura Homes (P) Ltd
."

e) Paragraph Nos.150 to 169, 219, 220 and 222 of the judgement of the 7

Judge Bench of the Hon'ble Supreme Court in Interplay (Supra) are

relevant and are set out hereunder:

"150.
Section 11
of the Arbitration Act deals with the appointment of arbitrators.
It recognises the autonomy of the parties to agree upon a procedure for
appointment of an arbitrator or arbitrators.
Section 11
requires the intervention
of the Court only when there is a deadlock or failure of the parties to follow the
appointment procedure. In the process,
Section 11
is meant to give effect to the
mutual intention of the parties to settle their disputes by arbitration in
situations where the parties fail to appoint an arbitrator or arbitrators. In an
arbitration with three arbitrators, each party is required to appoint one
arbitrator each, and subsequently the two arbitrators will appoint the third
arbitrator.
Section 11(6)
confers powers on the Supreme Court and the High
Court, as the case may be, on the failure of the parties to comply with the agreed
arbitration procedure.
Section 11(6)
enlists three possible defects in the
appointment procedure, namely : first, a party fails to act as required by the
agreed procedure; second, the parties or the two appointed arbitrators fail to
reach an agreement expected of them under that procedure; or third, a person,
including an institution, fails to perform any function entrusted to them or
under the agreed procedure.

151.
Section 11(6)
has had a long and chequered history before this Court,
particularly in respect of the nature of function of the Chief Justice or his
designate in the appointment of an arbitrator. In SBP & Co. v. Patel Engg. Ltd.,
a seven-Judge Bench of this Court held that the power exercised by the Chief
Justice of India or a Chief Justice of the High Court under
Section 11(6)
is a
judicial power. In the process, this Court analysed the scope of the powers and
authority of the Referral Court under
Section 11(6)
. Moreover, this Court noted
that
Sections 8
and
are complementary in nature. Consequently, if the

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judicial authority acting under
Section 8
has to mandatorily decide the issue of
jurisdiction before referring the parties to arbitration, the same standard of
scrutiny was also held to be applicable to the reference under
Section 11
. In
conclusion, it was held that the Chief Justice or their designate at the referral
stage under
Section 11(6)
had the right to determine all preliminary issues :

(SCC pp. 663-664, para 74)
"47. ... (iv) The Chief Justice or the designated Judge will have the right to
decide the preliminary aspects as indicated in the earlier part of this
judgment. These will be his own jurisdiction to entertain the request, the
existence of a valid arbitration agreement, the existence or otherwise of a live
claim, the existence of the condition for the exercise of his power and on the
qualifications of the arbitrator or arbitrators. The Chief Justice or the
designated Judge would be entitled to seek the opinion of an institution in
the matter of nominating an arbitrator qualified in terms of
Section 11(8)
of
the Act if the need arises but the order appointing the arbitrator could only
be that of the Chief Justice or the designated Judge."

152. The extent of judicial interference at the referral stage was scrutinised by a
Bench of two Judges of this Court in
National Insurance Co. Ltd. v. Boghara
Polyfab (P) Ltd. This
Court held that when the intervention of the Court is
sought under
Section 11
of the Arbitration Act, the following categories of issues
will arise before the Referral Court:

152.1. The issues which the Chief Justice or his designate is bound to decide.

These issues were : first, whether the party making the application has
approached the appropriate High Court; and second, whether there is a valid
arbitration agreement and whether the party who has applied under
Section 11

of the Act, is a party to such an agreement;

152.2. The issues which the Chief Justice or his designate may choose to decide
or leave them to the decision of the Arbitral Tribunal. These issues were : first,
whether the claim is a dead (long-barred) claim or a live claim; and second,
whether the parties have concluded the contract/transaction by recording the
satisfaction of their mutual rights and obligations or by receiving the final
payment without objection; and

152.3. The issues which the Chief Justice or their designate should leave
exclusively to the Arbitral Tribunal. These issues were : first, whether a claim
made falls within the arbitration clause (as for example, a matter which is
reserved for final decision of a departmental authority and excepted or excluded
from arbitration); and second, merits or any claim involved in the arbitration.

153. The decisions of this Court in Patel Engg. and Boghara Polyfab allowed for
greater judicial interference at the pre-arbitral stage. In effect, the Referral
Courts were encouraged to conduct mini trials instead of summarily dealing
with the preliminary issues. This was also noted by the Law Commission of
India, which observed that judicial intervention in the arbitral proceedings is a
pervasive problem in India leading to significant delays in the arbitration
process. The Law Commission recognised that one of the problems plaguing

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implementation of the
Arbitration Act
was that
Section 11
applications were
kept pending for years by the Courts. To remedy the situation, the Law
Commission proposed changing the then existing scheme of the power of
appointment being vested in the "Chief Justice" to the "High Court" and the
"Supreme Court". It also clarified that the power of appointment of arbitrators
ought not to be regarded as a judicial act.

154. Significantly, the Law Commission observed that there was a need to
reduce judicial intervention at the pre-arbitral stage, that is, prior to the
constitution of the Arbitral Tribunal. Accordingly, it proposed limiting the
scope of the judicial intervention at the referral stage under
Sections 8
and
of
the Arbitration Act "to situations where the Court/Judicial Authority finds that
the arbitration agreement does not exist or is null and void". The Law
Commission suggested insertion of sub-section (6-A) under
Section 11
which
would read:"Any appointment by the High Court or the person or institution
designated by it under sub-section (4) or sub-section (5) or sub-section (6) shall
not be made only if the High Court finds that the arbitration does not exist or is
null and void." In light of the recommendations of the Law Commission,
Parliament passed the
Arbitration and Conciliation (Amendment) Act, 2015

("the 2015 Amendment Act") to incorporate
Section 11
(6-A).

155. The Statement of Objects and Reasons of the 2015 Amendment Act states
that sub-section (6-A) is inserted in
Section 11
to provide that the Supreme
Court or the High Court while considering application under sub-sections (4) to
(6) "shall confine to the examination of an arbitration agreement". With the
coming into force of the 2015 Amendment Act, the nature of preliminary
examination at the referral stage under
Section 11
was confined to the existence
of an arbitration agreement. It also incorporates a non obstante clause which
covers "any judgment, decree or order of any court". By virtue of the non
obstante clause,
Section 11
(6-A) has set out a new position of law, which takes
away the basis of the position
laid down by
the previous decisions of this Court
in Patel Engg. and Boghara Polyfab. It is also important to note that Parliament
did not incorporate the expression "or is null and void" as was suggested by the
Law Commission. This indicates that Parliament intended to confine the
jurisdiction of the Courts at the pre-arbitral stage to as minimum a level as
possible.

156. The effect and impact of the 2015 Amendment Act was subsequently
clarified by this Court.
In
Duro Felguera, S.A. v. Gangavaram Port Ltd. Kurien
Joseph, J.
noted that the intention of the legislature in incorporating
Section
(6-A) was to limit the scope of the Referral Court's jurisdiction to only one
aspect -- the existence of an arbitration agreement. To determine the existence
of an arbitration agreement, the Court only needs to examine whether the
underlying contract contains a clause which provides for arbitration pertaining
to the disputes which have arisen between the parties to the agreement. This

Court further held
that
Section 11
(6-A) incorporates the principle of minimal
judicial intervention : (SCC p. 765, para 59)

"59.
The scope of the power under
Section 11(6)
of the 1996 Act was

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considerably wide in view of the decisions in SBP & Co. [SBP & Co. v. Patel
Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab. This position continued
till the amendment brought about in 2015. After the amendment, all that the
Courts need to see is whether an arbitration agreement exists-nothing more,
nothing less. The legislative policy and purpose is essentially to minimise the
Court's intervention at the stage of appointing the arbitrator and this
intention as incorporated in
Section 11
(6-A) ought to be respected."

157. In 2017, the High-Level Committee to Review the Institutionalisation of
Arbitration Mechanism in India submitted a report noting that while the 2015
amendment facilitated the speedy disposal of
Section 11
applications, they failed
to limit judicial interference in arbitral proceedings. Accordingly, the High-
Level Committee recommended the amendment of
Section 11
to provide for
appointment of arbitrators solely by arbitral institutions designated by the
Supreme Court in case of international commercial arbitrations or the High
Court in case of all other arbitrations. In view of the report of the High-Level
Committee, Parliament enacted the
Arbitration and Conciliation (Amendment)
Act, 2019
("the 2019 Amendment Act") omitting
Section 11
(6-A) so as to leave
the appointment of arbitrators to arbitral institutions.
Section 1(2)
of the 2019
Amendment Act provides that amended provisions shall come into force on
such date as notified by the Central Government in the official gazette.
However,
Section 3
of the 2019 Amendment Act which amended
Section 11
by
omitting
Section 11
(6-A) is yet to be notified. Till such time,
Section 11
(6-A) will
continue to operate.

158.
In
Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman
, a three-Judge
Bench of this Court affirmed the reasoning in
Duro Felguera [Duro Felguera,
S.A. v. Gangavaram Port Ltd.
, (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] by
observing that the examination under
Section 11
(6-A) is "confined to the
examination of the existence of an arbitration agreement and is to be
understood in the narrow sense". Moreover, it held that the position of law
prior to the 2015 Amendment Act, as set forth by the decisions of this Court in
Patel Engg. and Boghara Polyfab, has been legislatively overruled. Thus, this
Court gave effect to the intention of the legislature in minimising the role of the
Courts at the pre-arbitral stage to the bare minimum.

159. Thereafter, in Vidya Drolia , another three-Judge Bench of this Court,
affirmed the ruling in Mayavati Trading that Patel Engg. has been legislatively
overruled. In Vidya Drolia, one of the issues before this Court was whether the
Court at the reference stage or the Arbitral Tribunal in the arbitration
proceedings would decide the question of non-arbitrability. This Court began its
analysis by holding that an arbitration agreement has to satisfy the mandate of
the
Contract Act
, in addition to satisfying the requirements stipulated under

Section 7
of the Arbitration Act to qualify as an agreement.

160. In the course of the decision, one of the questions before this Court in
Vidya Drolia was the interpretation of the word "existence" as appearing in

Section 11
. It was held that existence and validity are intertwined. Further, it
was observed that an arbitration agreement does not exist if it is illegal or does
not satisfy mandatory legal requirements. Therefore, this Court read the

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mandate of valid arbitration agreement contained in
Section 8
into the mandate
of
Section 11
, that is, "existence of an arbitration agreement".

161. At the outset, Vidya Drolia noted that "
Section 11
has undergone another
amendment vide Act 33 of 2019 with effect from 9-8-2019." The purport of the
omission of the said clause was further explained in the following terms : (SCC
p. 115, para 145)
"145. Omission of sub-section (6-A) by Act 33 of 2019 was with the specific
object and purpose and is relatable to by substitution of sub-sections (12), (13)
and (14) of
Section 11
of the Arbitration Act by Act 33 of 2019, which, vide sub-
section (3-A) stipulates that the High Court and this Court shall have the power
to designate the arbitral institutions which have been so graded by the Council
under Section 43-I, provided where a graded arbitral institution is not available,
the High Court concerned shall maintain a panel of arbitrators for discharging
the function and thereupon the High Court shall perform the duty of an arbitral
institution for reference to the Arbitral Tribunal. Therefore, it would be wrong
to accept that post omission of sub-section (6-A) of
Section 11
the ratio in Patel
Engg. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] would become
applicable."

162.Vidya Drolia proceeds on the presumption that
Section 11
(6-A) was
effectively omitted from the statute books by the 2019 Amendment Act. This is
also reflected in the conclusion arrived at by the Court, as is evident from the
following extract : (SCC p. 121, para 154)

"154. ... 154.1. Ratio of the decision in Patel Engg. on the scope of judicial
review by the Court while deciding an application under
Sections 8
or 11 of
the
Arbitration Act
, post the amendments by Act 3 of 2016 (with
retrospective effect from 23-10-2015) and even post the amendments vide
Act 33 of 2019 (with effect from 9-8-2019), is no longer applicable."

(emphasis supplied)

163. We are of the opinion that the above premise of the Court in Vidya Drolia is
erroneous because the omission of
Section 11
(6-A) has not been notified and,
therefore, the said provision continues to remain in full force. Since
Section
(6-A) continues to remain in force, pending the notification of the Central
Government, it is incumbent upon this Court to give true effect to the legislative
intent.

164. The 2015 Amendment Act has laid down different parameters for judicial
review under
Section 8
and
Section 11
. Where
Section 8
requires the Referral
Court to look into the prima facie existence of a valid arbitration agreement,

Section 11
confines the Court's jurisdiction to the examination of the existence
of an arbitration agreement. Although the object and purpose behind both

Sections 8
and
is to compel parties to abide by their contractual
understanding, the scope of power of the Referral Courts under the said
provisions is intended to be different. The same is also evident from the fact
that
Section 37
of the Arbitration Act allows an appeal from the order of an

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Arbitral Tribunal refusing to refer the parties to arbitration under
Section 8
, but
not from
Section 11
. Thus, the 2015 Amendment Act has legislatively overruled
the dictum of Patel Engg. where it was held that
Section 8
and
Section 11
are
complementary in nature. Accordingly, the two provisions cannot be read as
laying down a similar standard.

165. The legislature confined the scope of reference under
Section 11
(6-A) to the
examination of the existence of an arbitration agreement. The use of the term
"examination" in itself connotes that the scope of the power is limited to a
prima facie determination. Since the Arbitration Act is a self-contained code,
the requirement of "existence" of an arbitration agreement draws effect from

Section 7
of the Arbitration Act. In Duro Felguera, this Court held that the
Referral Courts only need to consider one aspect to determine the existence of
an arbitration agreement -- whether the underlying contract contains an
arbitration agreement which provides for arbitration pertaining to the disputes
which have arisen between the parties to the agreement. Therefore, the scope of
examination under
Section 11
(6-A) should be confined to the existence of an
arbitration agreement on the basis of
Section 7
. Similarly, the validity of an
arbitration agreement, in view of
Section 7
, should be restricted to the
requirement of formal validity such as the requirement that the agreement be in
writing. This interpretation also gives true effect to the doctrine of competence-
competence by leaving the issue of substantive existence and validity of an
arbitration agreement to be decided by Arbitral Tribunal under
Section 16
. We
accordingly clarify the position of law laid down in Vidya Drolia in the context
of
Section 8
and
Section 11
of the Arbitration Act.

166. The burden of proving the existence of arbitration agreement generally lies
on the party seeking to rely on such agreement. In jurisdictions such as India,
which accept the doctrine of competence-competence, only prima facie proof of
the existence of an arbitration agreement must be adduced before the Referral
Court. The Referral Court is not the appropriate forum to conduct a mini-trial
by allowing the parties to adduce the evidence in regard to the existence or
validity of an arbitration agreement. The determination of the existence and
validity of an arbitration agreement on the basis of evidence ought to be left to
the Arbitral Tribunal. This position of law can also be gauged from the plain
language of the statute.

167.
Section 11
(6-A) uses the expression "examination of the existence of an
arbitration agreement". The purport of using the word "examination" connotes
that the legislature intends that the Referral Court has to inspect or scrutinise
the dealings between the parties for the existence of an arbitration agreement.
Moreover, the expression "examination" does not connote or imply a laborious
or contested inquiry. On the other hand,
Section 16
provides that the Arbitral
Tribunal can "rule" on its jurisdiction, including the existence and validity of an
arbitration agreement. A "ruling" connotes adjudication of disputes after
admitting evidence from the parties. Therefore, it is evident that the Referral
Court is only required to examine the existence of arbitration agreements,
whereas the Arbitral Tribunal ought to rule on its jurisdiction, including the
issues pertaining to the existence and validity of an arbitration agreement. A
similar view was adopted by this Court in
Shin-Etsu Chemical Co. Ltd. v. Aksh

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Optifibre Ltd.

168.
In
Shin-Etsu [Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.
, (2005) 7
SCC 234] , this Court was called upon to determine the nature of adjudication
contemplated by unamended
Section 45
of the Arbitration Act when the
objection with regards to the arbitration agreement being "null and void,
inoperative or incapable of being performed" is raised before a judicial
authority. Writing for the majority, B.N. Srikrishna, J. held that Section 45 does
not require the judicial authority to give a final determination. The Court
observed that : (SCC p. 267, para 74)

"74. There are distinct advantages in veering to the view that Section 45 does
not require a final determinative finding by the Court. First, under the Rules
of Arbitration of the International Chamber of Commerce (as in force with
effect from 1-1-1998), as in the present case, invariably the Arbitral Tribunal
is vested with the power to rule upon its own jurisdiction. Even if the Court
takes the view that the arbitral agreement is not vitiated or that it is not
invalid, inoperative or unenforceable, based upon purely a prima facie view,
nothing prevents the arbitrator from trying the issue fully and rendering a
final decision thereupon. If the arbitrator finds the agreement valid, there is
no problem as the arbitration will proceed and the award will be made.
However, if the arbitrator finds the agreement invalid, inoperative or void,
this means that the party who wanted to proceed for arbitration was given an
opportunity of proceeding to arbitration, and the arbitrator after fully trying
the issue has found that there is no scope for arbitration. Since the
arbitrator's finding would not be an enforceable award, there is no need to
take recourse to the judicial intercession available under Section 48(1)( a) of
the Act."

169. When the Referral Court renders a prima facie opinion, neither the Arbitral
Tribunal, nor the Court enforcing the arbitral award will be bound by such a
prima facie view. If a prima facie view as to the existence of an arbitration
agreement is taken by the Referral Court, it still allows the Arbitral Tribunal to
examine the issue in depth. Such a legal approach will help the Referral Court in
weeding out prima facie non-existent arbitration agreements. It will also protect
the jurisdictional competence of the Arbitral Tribunals to decide on issues
pertaining to the existence and validity of an arbitration agreement.

219. The Statement of Objects and Reasons of the 2015 Amendment Act are as
follows:

"6. (iii) an application for appointment of an arbitrator shall be disposed of
by the High Court or Supreme Court, as the case may be, as expeditiously as
possible and an endeavour should be made to dispose of the matter within a
period of sixty days.

(iv) to provide that while considering any application for appointment of
arbitrator, the High Court or the Supreme Court shall examine the existence

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of a prima facie arbitration agreement and not other issues."

220. The above extract indicates that the Supreme Court or High Court at the
stage of the appointment of an arbitrator shall "examine the existence of a
prima facie arbitration agreement and not other issues". These other issues not
only pertain to the validity of the arbitration agreement, but also include any
other issues which are a consequence of unnecessary judicial interference in the
arbitration proceedings. Accordingly, the "other issues" also include
examination and impounding of an unstamped instrument by the Referral
Court at the
Section 8
or
Section 11
stage. The process of examination,
impounding, and dealing with an unstamped instrument under the
Stamp Act

is not a time-bound process, and therefore does not align with the stated goal of
the
Arbitration Act
to ensure expeditious and time-bound appointment of
arbitrators. Therefore, even though the Law Commission of India Report or the
Statement of Objects and Reasons of the 2015 Amendment Act do not
specifically refer to SMS Tea Estates, it nevertheless does not make any
difference to the position of law as has been set out above.

222. The scope of authority of an Arbitral Tribunal under
Section 16
is wide
because it can deal with issues pertaining to the existence and validity of an
arbitration agreement. In his dissenting opinion in N.N. Global (2), Roy, J.
correctly observes that since "[s]ection 16 specifically deals with both existence
and validity whereas
Section 11
only deals with existence, the former should be
given more weight." This observation comports with the stated goal of the

Arbitration Act
to minimise the supervisory role of Courts in the arbitral
process. Post the 2015 Amendment Act the Referral Courts are only required to
prima facie determine the existence or validity of an arbitration agreement. The
basis for such prima facie determination lies in the fact that the Arbitral
Tribunal will later have the competence to rule on the issue of existence and
validity of the arbitration agreement. Therefore, the separability presumption
applies at the referral stage.

f) Paragraph Nos.110 to 114, 117, 118, 122 to 125 of the judgement of the

Hon'ble Supreme Court in SBI General Insurance Co.Ltd. (Supra) are

relevant and are set out hereunder:

"110. The scope of examination under
Section 11
(6-A) is confined to the
existence of an arbitration agreement on the basis of
Section 7
. The examination
of validity of the arbitration agreement is also limited to the requirement of
formal validity such as the requirement that the agreement should be in writing.

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111. The use of the term 'examination' under
Section 11
(6-A) as distinguished
from the use of the term 'rule' under
Section 16
implies that the scope of
enquiry under
section 11
(6-A) is limited to a prima facie scrutiny of the
existence of the arbitration agreement, and does not include a contested or
laborious enquiry, which is left for the arbitral tribunal to 'rule' under Section

16. The prima facie view on existence of the arbitration agreement taken by the
referral court does not bind either the arbitral tribunal or the court enforcing
the arbitral award.

112. The aforesaid approach serves a two-fold purpose - firstly, it allows the
referral court to weed out non-existent arbitration agreements, and secondly, it
protects the jurisdictional competence of the arbitral tribunal to rule on the
issue of existence of the arbitration agreement in depth.

113. Referring to the Statement of Objects and Reasons of the Arbitration and
Conciliation (Amendment) Act, 2015, it was observed in In Re : Interplay
(supra) that the High Court and the Supreme Court at the stage of appointment
of arbitrator shall examine the existence of a prima facie arbitration agreement
and not any other issues. The relevant observations are extracted hereinbelow:

"209. The above extract indicates that the Supreme Court or High Court at
the stage of the appointment of an arbitrator shall "examine the existence of
a prima facie arbitration agreement and not other issues". These other issues
not only pertain to the validity of the arbitration agreement, but also include
any other issues which are a consequence of unnecessary judicial
interference in the arbitration proceedings. Accordingly, the "other issues"

also include examination and impounding of an unstamped instrument by
the referral court at the
Section 8
or
Section 11
stage. The process of
examination, impounding, and dealing with an unstamped instrument under
the
Stamp Act
is not a timebound process, and therefore does not align with
the stated goal of the
Arbitration Act
to ensure expeditious and time-bound
appointment of arbitrators. [...]"

(Emphasis supplied)

114. In view of the observations made by this Court in In Re : Interplay (supra),
it is clear that the scope of enquiry at the stage of appointment of arbitrator is
limited to the scrutiny of prima facie existence of the arbitration agreement, and
nothing else.
For this reason, we find it difficult to hold that the observations
made in
Vidya Drolia
(supra) and adopted in
NTPC v. SPML
(supra) that the
jurisdiction of the referral court when dealing with the issue of "accord and
satisfaction" under
Section 11
extends to weeding out ex-facie non-arbitrable
and frivolous disputes would continue to apply despite the subsequent decision
in In Re : Interplay (supra).

117. By referring disputes to arbitration and appointing an arbitrator by exercise

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of the powers under
Section 11
, the referral court upholds and gives effect to the
original understanding of the contracting parties that the specified disputes
shall be resolved by arbitration. Mere appointment of the arbitral tribunal
doesn't in any way mean that the referral court is diluting the sanctity of
"accord and satisfaction" or is allowing the claimant to walk back on its
contractual undertaking. On the contrary, it ensures that the principal of
arbitral autonomy is upheld and the legislative intent of minimum judicial
interference in arbitral proceedings is given full effect. Once the arbitral
tribunal is constituted, it is always open for the defendant to raise the issue of
"accord and satisfaction" before it, and only after such an objection is rejected
by the arbitral tribunal, that the claims raised by the claimant can be
adjudicated.

118. Tests like the "eye of the needle" and "ex-facie meritless", although try to
minimise the extent of judicial interference, yet they require the referral court
to examine contested facts and appreciate prima facie evidence (however
limited the scope of enquiry may be) and thus are not in conformity with the
principles of modern arbitration which place arbitral autonomy and judicial
non-interference on the highest pedestal.

122. Once an arbitration agreement exists between parties, then the option of
approaching the civil court becomes unavailable to them. In such a scenario, if
the parties seek to raise a dispute, they necessarily have to do so before the
arbitral tribunal. The arbitral tribunal, in turn, can only be constituted as per
the procedure agreed upon between the parties. However, if there is a failure of
the agreed upon procedure, then the duty of appointing the arbitral tribunal
falls upon the referral court under
Section 11
of the Act, 1996. If the referral
court, at this stage, goes beyond the scope of enquiry as provided under the
section and examines the issue of "accord and satisfaction", then it would
amount to usurpation of the power which the parties had intended to be
exercisable by the arbitral tribunal alone and not by the national courts. Such a
scenario would impeach arbitral autonomy and would not fit well with the
scheme of the Act, 1996.

123. The power available to the referral courts has to be construed in the light of
the fact that no right to appeal is available against any order passed by the
referral court under
Section 11
for either appointing or refusing to appoint an
arbitrator. Thus, by delving into the domain of the arbitral tribunal at the
nascent stage of
Section 11
, the referral courts also run the risk of leaving the
claimant in a situation wherein it does not have any forum to approach for the
adjudication of its claims, if it
Section 11
application is rejected.

124.
Section 11
also envisages a time-bound and expeditious disposal of the
application for appointment of arbitrator. One of the reasons for this is also the
fact that unlike
Section 8
, once an application under
Section 11
is filed,
arbitration cannot commence until the arbitral tribunal is constituted by the
referral court. This Court, on various occasions, has given directions to the High
Courts for expeditious disposal of pending
Section 11
applications. It has also

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directed the litigating parties to refrain from filing bulky pleadings in matters
pertaining to
Section 11
. Seen thus, if the referral courts go into the details of
issues pertaining to "accord and satisfaction" and the like, then it would become
rather difficult to achieve the objective of expediency and simplification of
pleadings.

27. A perusal of these judgements shows that, prior to the judgement of

the Hon'ble Supreme Court in Interplay (Supra), the scope of interference by

the Court in proceedings under
Section 11
of the Act was slightly wider.

However, the judgement of the Hon'ble Supreme Court in Interplay (Supra)

has narrowed down the scope. In Interplay (Supra), the Hon'ble Supreme

Court has held that the scope of examination under
section 11 (6A)
should be

confined to the existence of an arbitration agreement on the basis of
Section 7

of the Act. Similarly, the validity of an arbitration agreement, in view of

Section 7
of the Act, should be restricted to the requirement of formal validity

such as the requirement that the agreement be in writing. The Hon'ble

Supreme Court has held that this interpretation gives true effect to the

doctrine of competence - competence by leaving the issue of substantive

existence and validity of an arbitration agreement to be decided by the

Arbitral Tribunal under
Section 16
of the Act.
The Hon'ble Supreme Court in

Interplay (Supra) accordingly clarified the position of law laid down in
Vidya

Drolia and Others
(Supra) in the context of
Section 8
and
Section 11
of the

Act in the aforesaid terms.
Further, in Interplay (Supra), the Hon'ble

Supreme Court held that, in jurisdictions such as India, which accept the

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doctrine of competence - competence, only prima facie proof of the

existence of an arbitration agreement must be adduced before the Referral

Court. The Hon'ble Supreme Court held that the Referral Court is not the

appropriate forum to conduct a mini trial by allowing the parties to adduce

evidence in regard to the existence or validity of an arbitration agreement.

The determination of the existence and validity of an arbitration agreement

on the basis of evidence ought to be left to the Arbitral Tribunal.

28. Further, in Interplay (Supra), the Hon'ble Supreme Court held that

Section 11 (6A)
uses the expression "examination of the existence of an

arbitration agreement". The purpose of using the word "examination"

connotes that the legislature intended that the Referral Court had to inspect

or scrutinize the dealings between the parties for the existence of an

arbitration agreement. Moreover, the expression "examination" does not

connote or imply a laborious or contested inquiry. On the other hand,

Section 16
provided that the Arbitral Tribunal can 'rule' on its jurisdiction,

including the existence and validity of the arbitration agreement. The Hon'ble

Supreme Court further held that a 'ruling' connotes adjudication of disputes

after admitting evidence from the parties. Therefore, it is evident that the

Referral Court was only required to examine the existence of arbitration

agreements, whereas the Arbitral Tribunal ought to rule on its jurisdiction,

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including the issues pertaining to the existence and validity of an arbitration

agreement.

29. The aforesaid position in law laid down by Interplay (Supra) has been

confirmed by the subsequent decision of the Hon'ble Supreme Court in SBI

General Insurance Co.Ltd. (Supra) referred to hereinabove.

30. In my view, in the light of the aforesaid position in law laid down by

the Hon'ble Supreme Court in Interplay (Supra), the objections raised by the

Respondents cannot be gone into by this Court in the present Application

under
Section 11
of the Arbitration Act.

31. The objections of the Respondents, namely (i) that the disputes

raised by the Applicant are not non-arbitrable as they are barred by the

provisions of the SARFAESI Act and the RDDB Act, (ii) that the Applicant

had waived its right to arbitration by filing a Summary Suit in this Court and

(iii) that allowing of this Application would lead to multiplicity of

proceedings, are not objections regarding the existence of an arbitration

agreement, on the basis of
Section 7
of the Act nor are they objections

regarding the validity of the arbitration agreement. In view of
Section 7
of the

Act, objections as to validity should be restricted to the requirements of

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formal validity such as the requirement that the agreement be in writing.

Therefore on the basis of the law laid down by the Hon'ble Supreme Court in

Interplay (Supra), I hold that the objections raised by the Respondents

cannot be gone into by this Court in this Application under
Section 11
of the

Act.

32. As laid down by the Hon'ble Supreme Court in Interplay (Supra), in

an Application under
Section 11
of the Act, this Court has only to prima facie

determine whether an Arbitration Agreement exists as required by the

provisions of
Section 7
of the Act. In the present case, there exists an

Arbitration Agreement between the parties as contained in clause (k) of the

Sanction Letter dated 19th August 2019. The correspondence between the

parties shows that disputes and differences have arisen between the parties.

The Applicant has invoked the arbitration agreement contained in the said

Sanction Letter dated 19th August 2019 by its Advocate's letter dated 6 April

2021. In these circumstances, I hold that an arbitration agreement exists

between the parties and an Arbitrator would have to be appointed in order to

arbitrate upon all disputes and differences arising between the parties under

the said Sanction Letter dated 19 th August 2019. Needless to add, that the

Respondents will be at liberty to raise the objections raised by them to the

present Application before the Arbitrator.

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33. In light of the aforesaid discussion, and for the aforesaid reasons, the

following order is passed:

(a) Mr. Shanay Shah, an Advocate practising in this Court, is
appointed as the Arbitrator to arbitrate upon all the disputes
and differences between the parties under the said Sanction
letter dated 19th August 2019. Details of Mr. Shanay Shah, who is
appointed as an Arbitrator, are as under:-

Name :- Mr. Shanay Shah (Advocate)
Mobile No. :- 9987483450
Email :-
[email protected]

Address :- Office No.17-A, 4th Floor, Surya Mahal,
Burjorji Bharucha Marg, Fort,
Mumbai 400 023.

(b) The Advocates for the Applicant shall intimate the

Arbitrator about his appointment within a period of one
week from the date of uploading of this order;

(c) In addition, the Office of the Prothonotary and Senior
Master of this Court shall also intimate the Arbitrator
about his appointment within a period of one week from
the date of uploading of this order.

(d) The Arbitrator so appointed to make the disclosure as
required under the provisions of the Act within a period
of one week from the date of intimation of his
appointment;

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(e) The Arbitrator shall charge fees as per the Rules framed by
this Court in that regard;

34. The Arbitration Application is accordingly disposed of.

35. It is made clear that the Respondents will be at liberty to raise the

objections raised by them to the present Application before the arbitrator.

[FIRDOSH P. POONIWALLA, J.]

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