Arbitration & Conciliation Act, 1996 – s.11(6A) – Presidency Small Cause Courts Act, 1882 – s.41 – Single Judge allowed the s.11, A&C Act application filed by the respondent seeking appointment of a sole arbitrator in accordance with clause
33 of the arbitration agreement of the Leave and License Agreement, and appointed an arbitrator to adjudicate the dispute between the parties – Appellant took objection that the dispute is non-arbitrable in view of s.41, 1882 Act – Raised the ground of non-arbitrability u/s.41,1882 Act before the arbitrator and filed a s.16 application under the A&C Act before the arbitrator – Dismissed by arbitrator – Whether the High Court had rightly allowed the application filed by the respondent u/s.11, A&C Act:
Held: Leave and License agreement in Clause 33 contained an Arbitration clause – Paragraph 40 of the Full Bench judgment of the Bombay High Court in Central Warehousing relied on by the appellant cannot be understood on the facts of the present case to mean that Clause 33 of the Leave and License Agreement containing the arbitration clause has ceased to exist – An examination u/s.11(6-A) indicates that there exists an arbitration agreement between the parties – Furthermore, s.41 is a provision conferring jurisdiction on the Small Causes Court for certain types of disputes and cannot be interpreted to mean that ex proprio vigore (by its own force), it neutralizes arbitration clauses in agreements – Conferment of jurisdiction on a specific court or creation of a public forum, may not be the decisive test to answer and decide whether arbitrability is impliedly barred – Since, the Arbitrator has taken a decision on the s.16 application thus, parties have to work out their remedies in accordance with law – As and when such remedies are resorted to, they will be decided uninfluenced by any of the observations made herein – All questions between the parties other than the one answered herein based on s.11(6-A), A&C Act are left open. [Paras 14, 17, 21, 23, 27]
Arbitration & Conciliation Act, 1996 – s.11(6A) – Presidency Small Cause Courts Act, 1882 – Appellant relied on the Full Bench judgment of the Bombay High Court in Central Warehousing which inter alia held that the Arbitration Agreement in the situation referred therein would be invalid and inoperative on the principle that it would be against public policy to allow the parties to contract out of the exclusive jurisdiction of Small Causes Court by virtue of s.41 of the Act of 1882 – Appellant submitted that in view of this holding, even while examining within the contours of s.11(6-A) this Court will be obliged to conclude that no arbitration agreement existed: Held: Submission not countenanced, reasons stated – Paragraph
40 of Central Warehousing cannot be understood on the facts of the present case to mean that Clause 33 of the Leave and License Agreement has ceased to exist – The judgement in Central Warehousing is dealt with only to decipher whether on account of the said judgement, Clause 33 of the Leave and License Agreement in the present case, containing the arbitration clause is non-existent – It is not – An examination u/s.11(6-A) indicates that there exists an arbitration agreement between the parties – An appeal is pending in this Court against the judgement in Central Warehousing – That appeal may be decided on its own merits – This Court is not to be taken to have pronounced on the correctness of Central Warehousing one way or the other. [Paras 21, 23] Arbitration & Conciliation Act, 1996 – s.11(6-A) – Presidency Small Cause Courts Act, 1882 – s.41:
Held: Leave and License agreement in Clause 33 contained an Arbitration clause – In a proceeding u/s.11, A&C Act, the Court is to confine the examination to the existence of an Arbitration Agreement – s.11(6-A) which was brought into force w.e.f 23.10.2015, though omitted by Act 33 of 2019, the omission has not yet been notified – Hence, the jurisdiction of this Court is only to inspect or scrutinize the dealings between the parties for determination about the existence of an Arbitration Agreement. [Paras 14, 17]
Arbitration – Issue of arbitrability or otherwise of a dispute – Conferment of jurisdiction on a specific court or creation of a public forum not the decisive test to answer and decide whether arbitrability is impliedly barred:
Held: Creation of a specific forum as a substitute for Civil Court or specifying the Civil Court may not be enough to accept the inference of implicit non-arbitrability – Conferment of jurisdiction on a specific court or creation of a public forum though eminently significant, may not be the decisive test to answer and decide whether arbitrability is impliedly barred. [Para 21]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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