Claims must establish a cause of action to be arbitrable; if deemed premature, arbitrability does not exist under the Arbitration and Conciliation Act.

JUDGMENT

Vibhu Bakhru, J. The appellants have filed the present appeal under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act'), impugning orders dated 22.07.2020 and 24.06.2021 (hereafter `the impugned orders') passed by the Arbitral Tribunal.

2. The appellants' challenge to the impugned order dated 22.07.2020 is confined to the findings of the Arbitral Tribunal that no cause of action had arisen for the appellants in respect of certain counter-claims (referred to as Claims A, C, D, E and H). In respect of these counter-claims, the Arbitral Tribunal also granted liberty to revive the same at a subsequent stage.

3. The appellants, subsequently, sought revival of two counter-claims referred to as Claim A and H. However, by the impugned order dated 24.06.2021, the Arbitral Tribunal did not entertain the same. In respect of Claim A, the Arbitral Tribunal held that there was no material to indicate that the said claim had arisen in connection with the Family Settlements. In respect of Claim H, the Arbitral Tribunal, in effect, held that the same was premature. The Arbitral Tribunal's order dated 24.06.2021 is challenged to the limited extent that the aforesaid claims have not been entertained.

Factual Context

4. The disputes between the parties arise in the context of the Family Settlements dated 02.12.2017 and 09.12.2017.

5. Appellant no.1 (Rajesh Gupta) and respondent no.1 (Dinesh Gupta) are brothers and were jointly engaged in the business of dealing/development in real estate. Admittedly, during the course of the business, they promoted and incorporated several companies and carried on their businesses through and in the form of the said incorporated entities. It is stated that sometime in the year 2017, disputes arose between the two brothers and they agreed to divide their assets/businesses. The broad agreement entailed each of the two brothers and their respective families acquiring exclusive control of certain assets and companies. The appellant companies are under the control of Rajesh Gupta (appellant no.1). The appellants are collectively referred to as Rajesh Gupta Group - `RGG', and the respondents are collectively referred to as Dinesh Gupta Group - `DGG'. Rajesh Gupta and Dinesh Gupta (respondent no.1) entered into Family Settlements dated 02.12.2017 and 09.12.2017, as noted above.

6. The disputes between the two groups (RGG and DGG) continued to fester even after the two brothers had entered into the Family Settlements. DGG instituted a suit [CS(OS) No.51/2018] seeking a decree of permanent injunction restraining RGG from acting in contravention of the Family Settlements. DGG also instituted two other suits [CS(OS) No.100/2018 and CS(OS) No.101/2018] impugning the notices issued in respect of certain companies, as being in contravention of the Family Settlements. Essentially, DGG moved this Court seeking implementation of the Family Settlements. Certain interim orders were passed by this Court in the said suits, subject to DGG making certain payments to RGG. DGG appealed against the said interim orders to the Division Bench [FAO(OS) No.6/2019].

7. During the course of the proceedings before the Division Bench, RGG and DGG agreed to refer their disputes to an Arbitral Tribunal comprising