SUPREME COURT OF INDIA
ROHINTON FALI NARIMAN, R. SUBHASH REDDY, SURYA KANT, JJ.
M/S MAYAVTI TRADING PVT. LTD. - APPELLANT(S)
VERSUS
PRADYUAT DEB BURMAN - RESPONDENT(S)
CIVIL APPEAL NO.7023 OF 2019 (ARISING OUT OF SLP (CIVIL) NO. 8519 OF 2019)
Decided On : 05-09-2019
Arbitration and Conciliation Act, 1996 - Section 11(6A) - Inserted by amendment 2015 - Omitted in 2019 - Omission not brought in force - Institutionalization of appointment of arbitrators - Superior Courts no longer required to appoint arbitrators and to determine whether arbitration agreement exists or not - Law prior to 2015 amendment resurrected - Court not confined to determination of the arbitration agreement. (Para 6, 10)
Facts of the case:
This case calls for interpretation of effect of omission of section 11(6A) of the arbitration and Conciliation Act, 1996.
Result: United India Insurance Company Limited v. Antique Art Exports Private Limited, (2019) 5 SCC 362, overruled.
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JUDGMENT
R.F. Nariman, J.
1) Leave granted.
2) We have heard Mr. Mukul Rohatgi, learned Senior Advocate appearing for the appellant and Mr. Shyam Divan, learned Senior Advocate appearing for the respondent at considerable length.
3) On the facts of this case, we do not propose to interfere with the impugned decision of 12.03.2019 and, therefore, do not find it necessary to exercise our extraordinary jurisdiction under Article 136 of the Constitution of India.
4) Having said this, however, during the course of argument, a recent decision of this Court was pointed out, namely, United India Insurance Company Limited vs. Antique Art Exports Private Limited, (2019) 5 SCC 362. In this judgment, purportedly following Duro Felguera, S.A. vs. Gangavaram Port Limited, (2017) 9 SCC 729, this Court held:
“20. The submission of the learned counsel for the respondent that after insertion of sub-section (6-A) to Section 11 of the Amendment Act, 2015 the jurisdiction of this Court is denuded and the limited mandate of the Court is to examine the factum of existence of an arbitration and relied on the judgment in Duro Felguera, S.A. v. Gangavaram Port Ltd. [(2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] The exposition in this decision is a general observation about the effect of the amended provisions which came to be examined under reference to six arbitrable agreements (five agreements for works and one corporate guarantee) and each agreement contains a provision for arbitration and there was serious dispute between the parties in reference to constitution of Arbitral Tribunal whether there has to be Arbitral Tribunal pertaining to each agreement. In the facts and circumstances, this Court took note of sub-section (6-A) introduced by the Amendment Act, 2015 to Section 11 of the Act and in that context observed that the preliminary disputes are to be examined by the arbitrator and are not for the Court to be examined within the limited scope available for appointment of arbitrator under Section 11(6) of the Act. Suffice it to say that appointment of an arbitrator is a judicial power and is not a mere administrative function leaving some degree of judicial intervention; when it comes to the question to examine the existence of a prima facie arbitration agreement, it is always necessary to ensure that the dispute resolution process does not become unnecessarily protracted.
21. In the instant case, prima facie no dispute subsisted after the discharge voucher being signed by the respondent without any demur or protest and claim being finally settled with accord and satisfaction and after 11 weeks of the settlement of claim a letter was sent on 27-7-2016 for the first time raising a voice in the form of protest that the discharge voucher was signed under undue influence and coercion with no supportive prima facie evidence being placed on record in absence thereof, it must follow that the claim had been settled with accord and satisfaction leaving no arbitral dispute subsisting under the agreement to be referred to the arbitrator for adjudication.”
5) Section 11 (6A) was added by the amendment Act of 2015 and states as follows:
“11. (6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.”
6) Mr. Mukul Rohatgi, learned Senior Advocate, has pointed out that by an amendment Act of 2019, which has since been passed, this sub-section has now been omitted. Section 3 of the amendment Act of 2019 insofar as it pertains to this omission has not yet been brought into force. The omission is pursuant to a High Level Committee Review regarding institutionalization of arbitration in India, headed by Justice B. N. Srikrishna. The Report given by this Committee is dated 30th July, 2017. The omission of the sub-section is not so as to resusc
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