The court emphasized the principle that the issue of arbitrability should be left for the decision of the Arbitral Tribunal and held that the scope of the power under Section 11(6) of the Act is to see whether an arbitration agreement exists, nothing more, nothing less.

ORDER :

1. Heard Mr. Amit Sibal, learned senior counsel for the petitioner and Mr. Gopal Jain, learned senior counsel for the respondent no. 1, the only contesting respondent.

2. Despite service of notice on all other respondents, there has been no appearance.

3. The present application has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for brevity, the Act) for appointment of a sole arbitrator as disputes have arisen.

4. It is submitted by Mr. Amit Sibal, learned senior counsel for the petitioner that an arbitration agreement exists between the parties in the Term Sheet. He has invited our attention to clause 16 of the said Term Sheet. It reads as follows :-

“Governing Law & Arbitration : This Term Sheet will be governed by Indian Law.

Any dispute between the parties arising from or relating to this Term Sheet which cannot be amicably resolved between the parties shall be referred to arbitration in New Delhi in accordance with the Arbitration and Conciliation Act, 1996. The Tribunal shall consist of 1 arbitrator to be agreed upon between the parties. The language of the arbitration shall be English and the decision of the arbitrator shall be final and binding on the parties. The law of the arbitration shall be the laws of India.”

5. Mr. Gopal Jain, learned senior counsel for the respondent no. 1, per contra, would contend that the same may be construed as an arbitration clause, but the disputes that have been sought to be raised are under the Non- Disclosure Agreement and, therefore, not arbitrable, inasmuch as, there is no arbitration agreement in that agreement. The learned senior counsel would further submit that respondent no. 1 had filed a suit seeking damages and other reliefs and no steps were taken by the petitioner for stay of the suit.

6. On a query being made, we have been apprised that the suit has been filed seeking injunction from the Civil Court for restraining the petitioner from making any defamatory statement affecting the goodwill of the respondents and for grant of damages.

7. In our considered opinion, in such a suit, even if an application under Section 8 of the Act would have been moved, no stay could have been granted. On a scan of the arbitration clause, there can be no doubt that a clause of arbitration exists between the parties in the Term Sheet. Whether the claims are arbitrable or not, is within the domain of the arbitration. In this regard, we may refer to the decision rendered by this Court in Arasmeta Captive Power Company Ltd. & Anr. vs. Lafarge India Pvt. Ltd., (2013) 15 SCC 414, wherein a two-Judge Bench has said :-

“40. From the aforesaid authorities it is luculent that the larger Bench in SBP & Co. vs. Patel Engg. Ltd., (2005) 8 SCC 618, after deliberating at length with regard to the role of the Chief Justice or his designate, while dealing with an application under Section 11(6) of the Act, has thought it appropriate to define what it precisely meant in paragraph 39 of the judgment. The majority, if we allow ourselves to say so, was absolutely conscious that it required to be so stated and hence, it did so. The deliberation was required to be made as the decision in Konkan Railway Corporation Ltd. v. Rani Construction (P) Ltd., (2002) 2 SCC 388, where the Constitution Bench had held that an order passed by the Chief Justice under Section 11(6) is an administrative order and not a judicial one and, in that context, the Bench in many a paragraph proceeded to state about the role of the Chief Justice or his designate. The phrases which have been emphasized by Mr. Ranjit Kumar, it can be irrefragably stated, they cannot be brought to the eminence of ratio decidendi of the judgment. The stress laid thereon may be innovative but when the learned Judges themselves have culled out the ratio decidendi in paragraph 39, it is extremely difficult to state that the principle stated in SBP & Co. (supra) requires the Chief Justice or his designate to decide the controversy whe