JUDGMENT

Prathiba M. Singh, J.

1. This pronouncement has been done through hybrid mode.

Background

2. The present petition has been filed by the Petitioner-IDFC First Bank Limited (hereinafter ‘IDFC Bank’) challenging the impugned order dated 31st May 2021 whereby, a three member Arbitral Tribunal dismissed the application filed by the Petitioner under Section 16 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘Arbitration Act’).

3. A brief background of this petition is, that two agreements were entered into on 15th May 2017 between IDFC Bank and the Respondent- Hitachi MGRM Net Limited (hereinafter ‘Hitachi’). The said agreements were titled Strategic Partnership Agreement (‘SPA’) and Business Development Agreement (‘BDA’). The Agreements had an arbitration clause. The same reads:

“9.7 Governing Law and Jurisdiction i. This Agreement shall in all respects be subject to and governed by and construed in accordance with laws of India and in the event of any dispute arising on any basis from or under any part of this Agreement, the Parties shall submit to arbitration.

ii. If any dispute, difference, claim or controversy (the "Dispute") arises between the Parties about the validity, interpretation, implementation or alleged breach of any provision of this Agreement, then the Parties shall negotiate in good faith to endeavour to resolve the matter. However, if the Dispute has not been resolved by the Parties within thirty (30) days after the date of receipt of written notice of the Dispute by either Party from the Party raising the Dispute, then Dispute shall be referred to a sole arbitrator mutually acceptable to both the Parties. The arbitration shall be governed by the Arbitration and Conciliation Act, 1996 as updated. If the Parties are unable to mutually agree upon and appoint a sole arbitrator then the arbitration shall be referred to a panel of three arbitrators appointed in the following manner; one arbitrator shall be appointed by each Party and the third arbitrator shall be appointed by the aforesaid two arbitrators. The venue of arbitration shall be at New Delhi. The award of arbitrator shall be final and binding on the Parties.

iii. The provisions of this Section shall survive termination of this Agreement.

iv. it is agreed between the Parties hereto that Courts in New Delhi shall have non-exclusive jurisdiction to entertain and try suits and other legal proceedings, if any, between the Parties hereto."”

4. Disputes arose between the parties and accordingly the agreements stood terminated. However, according to the Petitioner, the Respondent was to refund an amount of Rs. 15 crore which had been paid as an advance. As the Respondent failed to refund the same, the Petitioner invoked arbitration on 28th June 2019.

5. While the arbitration proceedings were ongoing, on 14th December 2020, the Supreme Court’s decision in ‘Vidya Drolia and Others vs. Durga Trading Corporation’ [(2021) 1 Supreme Court Cases (Civ) 549:2020] was rendered. As per this decision, it is the Petitioner’s case that disputes which are governed by the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter ‘RDB Act, 1993’) would not be arbitrable.

6. In view of the said decision in Vidya Drolia (supra), on 23rd February 2021, the Petitioner- IDFC Bank moved an application under Section 16 of the Arbitration Act challenging the jurisdiction of the Arbitral Tribunal and seeking termination of the mandate of the Tribunal. On 31st May 2021, the Arbitral Tribunal, after pleadings and hearing, passed the impugned order dismissing the application filed under Section 16 of the Arbitration Act.

Submissions on behalf of the Petitioner

7. Mr. Parag P. Tripathi, ld. Sr. Counsel for the Petitioner, made the following submissions:

(A) That the impugned order passed by the Arbitral Tribunal is liable to be challenged under Article 226/227 of the Constitution of India as there is inherent lack of jurisdiction on the part of the Arbitral Tribunal in the light of Vidya Dr