However, on the other hand, it was the case on behalf of the contesting respondent herein – original applicant that other agreement(s) i.e., SHA-1, SHA-2 and MOU-1 are interlinked/interconnected with the MOU-2 which contained the arbitration clause/agreement and therefore, all the aforesaid agreements are required to be read along with MOU-2. 1
Shri Preetesh Kapur, learned Senior Advocate appearing on behalf of the appellant has taken us to Section 11(6A) of the Arbitration Act and has submitted that post- Arbitration and Conciliation Amendment Act, 2015 by which sub-section (6A) has been added to Section 11 of the Arbitration Act, while deciding the application under Section 11(6) of the Act and while exercising the pre- referral jurisdiction, the Court has to consider and examine the existence of an arbitration agreement and it should not be left to the Arbitral Tribunal. It is submitted that the dispute with respect to the existence and validity of an arbitration agreement/clause goes to the root of the matter and has to be decided first by the referral court. It is submitted that if ultimately it is held that there is no existence of an arbitration agreement and/or there is no valid arbitration agreement and the said issue is left to be decided by the arbitral tribunal in that case the entire exercise by the arbitral tribunal will be futile.
While opposing the present appeals, Shri Neeraj Kishan Kaul, learned Senior Advocate appearing on behalf of the original applicant has vehemently submitted that in the facts and circumstances of the case, the High Court has rightly followed the decision of this Court in the case of Vidya Drolia (supra) and has rightly referred the disputes between the parties to the arbitration.
It is submitted that once there is a specific finding given that all the agreements are interconnected, the agreement in which there is an arbitration clause has to be read along with MOU-2 and therefore, the High Court has rightly referred the disputes to the arbitration.
1 While considering the aforesaid issue Section 11(6A) of the Arbitration Act which has been added through Arbitration and Conciliation Amendment Act, 2015 is required to be read which reads as follows: – “(6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under subsection (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.”
2 Thus, post-Arbitration and Conciliation Amendment Act, 2015, the jurisdiction of the court under Section 11(6) of the Act is limited to examining whether an arbitration agreement exists between the parties – “nothing more, nothing less”.
Thus, as per the Section 11(6A) of the Act, it is the duty cast upon the referral court to consider the dispute/issue with respect to the existence of an arbitration agreement.
However, so far as the dispute with respect to the existence and validity of an arbitration agreement is concerned and when the same is raised at pre-referral stage, the referral court has to decide the said issue conclusively and finally and should not leave the said issue to be determined by the arbitral tribunal.
We are of the opinion that therefore, if the dispute/issue with respect to the existence and validity of an arbitration agreement is not conclusively and finally decided by the referral court while exercising the pre-referral jurisdiction under Section 11(6) and it is left to the arbitral tribunal, it will be contrary to Section 11(6A) of the Arbitration Act.
From the impugned common order passed by the referral court, it appears from the observations made in paragraphs 11 to 13 that the referral court has not decided the said issue conclusively and finally and referral court has left it to be decided by the arbitral tribunal. The matter is remitted back to the High Court/referral court to decide the respective arbitration petitions afresh and in light of the observations made hereinabove and to decide the issue conclusively and finally with respect to the existence and validity of the arbitration agreement.
The aforesaid exercise to be completed within a period of three months from the date of receipt of the present order.
Case Title: MAGIC EYE DEVELOPERS PVT. LTD. Vs. M/S. GREEN EDGE INFRASTRUCTURE PVT. LTD. (2023 INSC 528)
Case Number: C.A. No.-003634-003637 / 2023
