IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Smt Manju Gupta & Ors. – Appellants
Versus
Smt Meenu Singhal & Ors. – Respondents
Arb.P. 773 of 2022
Decided On : 06-03-2023
Arbitration - Family Settlement - Arbitration and Conciliation Act, 1996 - Section 11(6)
Fact of the Case:
The petitioners invoked the Arbitration Agreement in the 'Family Settlement' against the respondents. The respondents objected to their impleadment, leading to the present petition.
Finding of the Court:
The Court appointed an arbitrator to adjudicate the disputes between the parties in relation to the Family Settlement, emphasizing that all disputes and questions of maintainability should be settled together by the arbitrator.
Issues: Impleadment of respondents in the arbitration proceedings, plea of limitation, and maintainability of claims.
Ratio Decidendi: The Court should not venture into the plea of limitation and other issues raised by the respondents, as the same may prejudice the arbitration proceedings. All disputes and questions of maintainability should be settled together by the arbitrator.
Final Decision: The Court appointed an arbitrator and disposed of the petition accordingly.
JUDGMENT
Navin Chawla, J. (Oral)--This petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') praying for the following relief:
"a. Allow the present petition and appoint the Hon'ble Mr. Justice C.M. Nayyar (Former Judge of this Hon'ble Court) as an arbitrator to adjudicate the disputes between the parties by making the reference of the disputes under Section 11 of the Arbitration & Conciliation Act, in view of the fact that this Hon'ble Court vide its judgment and order dated 22.1.2021, appointed Justice C.M. Nayyar as sole arbitrator to adjudicate the disputes between the other signatories of the MFS and the petitioners, to which the respondents are also the signatories."
2. It is the case of the petitioners that before filing of the present petition, the petitioners had invoked the Arbitration Agreement between the parties as is contained in the `Memorandum Recording Family Settlement' dated 28.04.2007 (hereinafter referred to as the `Family Settlement'), inter alia, against the husband/father of the respondents-Shri Pawan Singhal, vide notice dated 03.03.2020. On failure of the parties agreeing to the appointment of the Arbitrator, the petitioners had filed a petition under Section 11 of the Act, being ARB.P. 331/2020 titled Smt. Manju Gupta & Ors. v. Shri Vilas Gupta & Ors.. The said petition was allowed by a Coordinate Bench of this Court vide order dated 22.01.2021, appointing Mr. Justice C.M. Nayar (Retd.) as an Arbitrator.
3. In the Statement of Claim filed before the learned Arbitrator, the petitioners impleaded the respondents herein, who are the wife and children of Shri Pawan Singhal, who had been impleaded as respondent no.4 in the earlier petition. An objection to such impleadment was raised by the respondents by filing an application under Order I Rule 10 of the Code of Civil Procedure, 1908 (in short `CPC'). The said application has been allowed by the learned Sole Arbitrator vide order dated 24.11.2021, keeping in view that neither in the notice dated 03.03.2020 invoking arbitration nor in the petition filed under Section 11 of the Act, the respondents herein had been impleaded as parties.
4. Faced with this situation, the petitioners issued a notice dated 07.12.2021 to the respondents again invoking the Arbitration Agreement between the parties as contained in the `Family Settlement'.
5. The respondents vide their response dated 07.01.2022 refused the appointment of an Arbitrator, inter alia, raising the issue of the claims being barred by limitation; the claims raised being not arbitrable; and the claims being without merit. The petitioners thereafter have filed the present petition.
6. The learned counsel for the petitioners, placing reliance on the order dated 22.01.2021 passed in ARB.P. 331/2020 (supra), submits that this Court has already appointed an Arbitrator to adjudicate the disputes that have arisen between the parties in relation to the Family Settlement. He submits that in the Family Settlement, the husband/father of the respondents, Shri Pawan Singhal along with the respondents, formed `The Fourth Part' and in turn `Group-I'. The respondents were represented through their husband/father Shri Pawan Singhal. Based on the advice received, the earlier notice invoking arbitration was sent only to Shri Pawan Singhal. It is only when the respondents raised their objections before the learned Arbitrator appointed by this Court, that the petitioners realized their mistake and invoked the Arbitration Agreement over again by the notice of 07.12.2021.
7. He further submits that before invoking arbitration, the petitioners had tried to settle the disputes that had arisen with respect to the Family Settlement with the respondents through their husband/father and, therefore, it cannot be said that the claims raised by the petitioners are barred by limitation. In support, he places reliance on the judgment of the Supreme Court in Har
Geo Miller and Company Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Limited
Hari Shankar Singhania and Others v. Gaur Hari Singhania and Others
The Court emphasized that all disputes and questions of maintainability should be settled together by the arbitrator, and the Court should not venture into the plea of limitation and other issues rai....
The period of limitation for filing a petition seeking appointment of an Arbitrator is distinct from the period of limitation for the substantive claims made in the underlying commercial contract.
The proper invocation of an Arbitration Agreement and the non-supersession of an existing agreement by a subsequent settlement were central legal principles established in the judgment.
The Court's jurisdiction at the stage of Section 11 of the Act is limited, and the Arbitral Tribunal is the preferred authority to decide questions of non-arbitrability.
The referral court under Section 11 of the Arbitration and Conciliation Act must determine the prima facie existence of an arbitration agreement and appoint an arbitrator if satisfied.
The main legal point established in the judgment is that the appointment of an arbitrator must be in accordance with the agreed procedure in the contract. If the appointment is not in line with the a....
Point of law : Appointment Arbitrator - Arbitrator making necessary disclosures under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.
A party can seek arbitration anew after an arbitral award is set aside, and a notice under Section 21 is not necessary unless the arbitration clause is freshly invoked.
The main legal point established in the judgment is the conclusive decision on the limitation plea and the importance of expeditious disposal of arbitration matters.
The existence of an arbitrable dispute, the validity of the arbitration agreement, and the existence of an arbitrable dispute are to be determined by the arbitral tribunal.
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