2021 Supreme(SC) 515

SUPREME COURT OF INDIA
N.V. RAMANA, CJI., SURYA KANT, J.
DLF Home Developers Limited – Petitioner
Versus
Rajapura Homes Private Limited and Another – Respondents
With
DLF Home Developers Limited – Petitioner
Versus
Begur OMR Homes Pvt. Ltd. and Another – Respondents
Arbitration Petition (Civil) Nos. 16, 17 of 2020
Decided On : 22-09-2021

IMPORTANT POINTS
(1) Apex Court or High Court, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at doors of chosen Arbitrator. Court(s) are obliged to apply their mind to core preliminary issues, within framework of Section 11(6-A) of Arbitration and Conciliation Act, 1996.

Headnote:

(A) Arbitration and Conciliation Act, 1996 – Section 11(6) read with Section 11(12) – Petition for appointment of sole Arbitrator – Jurisdiction of this Court under Section 11 is primarily to find out whether there exists a written agreement between parties for resolution of disputes through arbitration and whether aggrieved party has made out a prima facie arbitrable case – Limited jurisdiction, however, does not denude this Court of its judicial function to look beyond bare existence of an arbitration clause to cut deadwood – This Court or a High Court, as the case may be, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at doors of chosen Arbitrator – Court(s) are obliged to apply their mind to core preliminary issues, within framework of Section 11(6-A) of Act – Such a review is not intended to usurp jurisdiction of Arbitral Tribunal but is aimed at streamlining process of arbitration – Even when an arbitration agreement exists, it would not prevent Court to decline a prayer for reference if dispute in question does not correlate to the agreement. (Paras 18 and 19)

(B) Arbitration and Conciliation Act, 1996 – Section 11(6) read with Section 11(12) – Petition for appointment of sole Arbitrator – Disputes emanating from Construction Management Agreements – ‘Share Purchase Agreements’ as well as ‘Construction Management Agreements’ are subsisting and have not been repudiated by Parties – Both sets of agreements contain arbitration clauses that are not similar to one another – In order to determine nature of arbitral proceedings, two groups of agreements will have to be read in harmony and reconciled so as to avoid any head on collision, and thereafter a conclusion as to which of clauses would be applicable in present case, needs to be drawn – Prima facie reading of `Share Purchase Agreements’ and `Construction Management Agreements’, does suggest that notwithstanding certain overlaps between these agreements, their object and field of operation is different and distinct in nature – Dispute sought to be referred to arbitration by Petitioner DHDL pertains to non-deposit of agreed amount by Respondent No.2 and resultant payment thereof as `Fee’ which Petitioner claims in terms of clause 4 of RCMA/SCMA – Whether or not Petitioner has complied with ‘condition precedent’ under Rajapura SPA and has become entitled to `fee’, is purely a question of fact to be determined by Arbitral Tribunal – Parties have neither denied that there is no ‘arbitrable dispute’ between them nor have they challenged existence of arbitration clause(s) in Construction Management Service Agreements – Instant application(s) are maintainable – Nature of disputes that have arisen between parties, can be adjudicated in arbitral proceedings under Clause 11 of RCMA and SCMA – RCMA and SCMA, though interlinked and connected, are still two separate agreements – A former Judge of Supreme Court of India appointed as sole Arbitrator to resolve all disputes/differences between parties. (Paras 25, 26, 27, 32, 35 and 36)

Facts of the case:

Petitioner DLF Home Developers Limited (DHDL) has filed Arbitration Petition No. 16 of 2020 and Arbitration Petition No. 17 of 2020 under Section 11(6) read with Section 11(12) of the Arbitration and Conciliation Act, 1996 for appointment of sole Arbitrator to adjudicate the differences between the parties that have arisen out of the two Construction Management Agreements dated 25.01.2017.

Findings of Court:

If on appreciation of the facts and law, Arbitrator finds that the ‘real dispute’ between the parties stems from the Share Purchase Agreements dated 08.07.2016 and 25.01.2017, Arbitrator shall be free to wind up the proceedings with liberty to the Parties to seek redressal under the rules of SIAC.

Result : Arbitration Petitions allowed.