The arbitration agreement survives cancellation of the MoU, with substantive issues left for the arbitral tribunal to adjudicate. Section 11 restricts the court’s role to confirming the existence of a valid arbitration agreement.

JUDGMENT :

SOMASEKHAR SUNDARESAN, J.

Context and Background:

1. This Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”) seeking a reference to arbitration, of disputes and differences purporting to arise from a Memorandum of Understanding dated February 24, 2022 (“MoU”). The arbitration agreement is contained in Clause 12 (found at Page Nos. 64 and 65 of the Petition). In the interest of brevity, the arbitration agreement is not being extracted here. Suffice it to say that this matter falls within the jurisdiction of this Court.

2. It is apparent from the record that the arbitration agreement was invoked by the Petitioner on September 2, 2023. The MoU related to sale of certain property held by the Petitioner in favour of the Respondents (other than Respondent Nos. 1, 2, 3 and 5) who are parties to the MoU. The MoU contains an arbitration agreement. The Petitioner contends that obligations contained in the MoU need to be performed and it entails consideration of value of Rs. 60 Lakhs per acre for the land covered by the MoU.

3. Multiple Sale Deeds were executed between May 16, 2023 and May 18, 2023. The land covered by these Sale Deeds was the very land referred to in the MoU. Some of the Sale Deeds are also with parties who are not signatories to the MoU – these are Respondent Nos. 1 2, 3 and 5. The dispute appears to be over the amounts payable for the land sold.

4. The primary objection on behalf of the signatory Respondents (Respondent Nos. 4, 6 and 7), as indeed the non-signatory Respondents (Respondent Nos. 1, 2, 3 and 5), is that the MoU came to be cancelled by a Cancellation Deed dated May 18, 2023. Incidentally, this date is two days after the date of execution of the multiple Sale Deeds i.e. on May 16, 2023. The MoU appears to have cancelled after completion of the transactions in relation to transfer of land that was subject matter of the MoU.

5. The upshot of the reliance on the Cancellation Deed placed by Learned Counsel for the Respondents who are present today is that once the MoU is cancelled, the arbitration agreement contained therein also stands cancelled. Therefore, within the limited scope of jurisdiction of this Court under Section 11 (6A) of the Act, it is submitted that the arbitration agreement does not exist.

6. The Petitioner contests the validity of the Cancellation Deed dated May 18, 2023. According to the Petitioner, this deed was not executed by him and it has been fabricated by the Respondents. This is strongly objected to by Learned Counsel for the Respondents, who point to the stamp paper having been bought in the name of the Petitioner. They also submit that the Petitioner has signed every page of the said Cancellation Deed.

Analysis and Findings:

7. Having heard Learned Counsel for the parties, it is apparent that MoU in question entails transfer of certain lands. All of that very land came to be transferred by way of multiple Sale Deeds variously between May 16, 2023 and May 18, 2023. The Cancellation Deed is, therefore, executed contemporaneously with the completion of execution of the Sale Deeds. Doubts are sought to be raised about the veracity of the Cancellation Deed. This would be a matter of evidence that would need to be examined. The Section 11 Court ought to have the discipline of not to be drawn into seemingly convincing or unconvincing arguments about the veracity of documents that parties may present, in the hope that reference to arbitration need not be made. Whether the dispute is arbi