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IN THE HIGH COURT OF DELHI
Navin Chawla, J.
Jasmine Buildmart Private Limited - Appellant
Versus
Ahluwalia Contracts (India) Limited - Respondent
Arb.P. 806 of 2017 & Review Pet. 416 of 2019
Decided On : 14-12-2022




A Settlement Agreement can nullify an existing Arbitration Agreement, preventing disputes from being referred to arbitration.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Review petition seeking appointment of an Arbitrator dismissed - Previous order held substantive due to existing Settlement Agreement - Supreme Court precedent emphasizes High Court powers to recall orders under certain conditions. (Paras 1, 4, 21)

(B) Power of Review - High Court's review limited to errors apparent on record; erroneous decisions should be challenged via appeal. (Paras 9, 10)

(C) Settlement Agreement - Comprehensive settlement resulted in discharge of prior Arbitration Agreement; no dispute remains for arbitration. (Paras 22, 26)

(D) Jurisdiction - High Court has the authority to reconsider its orders but only if procedural errors are evident. (Paras 7, 19)

Facts of the case:
The petitioner sought review after claiming that a settlement with the respondent did not extinguish their Arbitration Agreement, but this was rejected due to the Settlement being deemed comprehensive.

Findings of Court:
Review petition dismissed with costs of Rs.1 Lakh to be paid.

Issues: The key issue was whether the Settlement Agreement nullified the Arbitration Agreement.

Ratio Decidendi: The court reasoned that the execution of the Settlement Agreement discharged the Arbitration Agreement, and the petitioner's claims fell outside judicial review.

Result: Review petition dismissed.

Table of Content
1. review petition filed against prior order. (Para 1 , 2)
2. arguments on maintainability of review petition. (Para 3 , 4)
3. discussion on powers of review versus recall. (Para 5 , 11)
4. high court's constitutional power to recall orders. (Para 7)
5. no merit found for recall of previous order. (Para 8 , 10 , 12)
6. history of arbitration petition filed. (Para 14 , 16)
7. judiciary's limited review on arbitration agreements. (Para 17 , 18)
8. existence of settlement deemed to discharge arbitration. (Para 19 , 25)
9. settlement agreement's scope discussed. (Para 22 , 23 , 24)
10. final dismissal of review petition with costs. (Para 27 , 28)

JUDGMENT

Navin Chawla, J. (Oral)

REVIEW PET. 416/2019

1. This review petition has been filed by the petitioner seeking review of the order dated 16.04.2019 passed by this Court, dismissing the petition filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act') seeking appointment of an Arbitrator on the ground that as the parties have arrived at a settlement of inter-se claims in relation to the subject contract, the Arbitration Agreement contained therein no longer remains in existence and/or operative.

2. Before considering the merit of the contentions raised before this Court, I must note that the above order of this Court was challenged by the petitioner before the Supreme Court by way of a Special Leave Petition, being SLP (C) No.18969/2019. The said Special Leave Petition was disposed of by the Supreme Court vide its order dated 16.08.2019, observing as under:

    "Mr. Maninder Singh, learned senior counsel appearing for the petitioner, has prayed for withdrawal of this petition to file review before the High Court.

    Without commenting on the aforesaid prayer, the special leave petition is dismissed as withdrawn, without liberty to question the same order again in this Court."

3. The learned senior counsel for the respondent at the outset challenged the maintainability of the present review petition. He submitted that a power to review its own order is not granted to this Court by the Act. The Act being a self contained code, this Court cannot rely upon the general powers of review that are vested in the High Court. In support of his submission, the learned senior counsel for the respondent has placed reliance on the judgment of the High Court of Bombay in Antikeros Shipping Corporation v. Adani Enterprises Ltd., Mumbai, 2020 SCC OnLine Bom 277.

4. On the other hand, the learned senior counsel for the petitioner places reliance on the judgment of the Supreme Court in Municipal Corporation of Greater Mumbai And Another v. Pratibha Industries Limited and Others, (2019) 3 SCC 203, to submit that Supreme Court has held that the High Court, being a Court of record, would have the power to recall its order once it is found to be without jurisdiction or as suffering from an error apparent on the face of the record. Further, placing reliance on the judgment of the Supreme Court in Union of India v. Namit Sharma, (2013) 10 SCC 359, he submits that where the order is against the statute or law settled by the Supreme Court, the same is liable to be reviewed by the Court.

5. On this issue, in the rejoinder, the learned senior counsel for the respondent has placed reliance on the judgment of the Supreme Court in Budhia Swain and Others v. Gopinath Deb and Others, (1999) 4 SCC 396 and Asit Kumar Kar v. State of West Bengal and Others, (2009) 2 SCC 703, to submit that the judgment of Pratibha Industries Limited and Others (supra) was not only considered and distinguished by the High Court of Bombay in Antikeros Shipping Corporation (supra), but even otherwise, is not applicable as there is a distinction between the power of review and the power of recall of an order; the power of review would allow the Court to consider the merits of the claim raised and to determine if there is any error apparent on the face of t

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