Case Note & Summary
The dispute arose between Hythro Power Corporation Ltd. and Delhi Transco Ltd. regarding the rejection of an application for arbitration under Section 11 of the Arbitration and Conciliation Act, 1996. The Delhi High Court had previously concluded that there was no written arbitration agreement between the parties, leading to the appellant's appeal to the Supreme Court. The appellant contended that the notice inviting tenders (NIT) included an arbitration clause, and the correspondence exchanged constituted a contract that invoked the arbitration clause. The Supreme Court examined the role of the Chief Justice's nominee under Section 11, emphasizing that it is an administrative function and not judicial. The court referenced previous judgments that clarified that the existence and validity of an arbitration agreement should be determined by the arbitral tribunal, not the Chief Justice's nominee. The court found that both the High Court and the Chief Justice's nominee had acted under a misconception of law by adjudicating on the existence of the arbitration agreement. Consequently, the Supreme Court allowed the appeal, quashed the previous orders, and remanded the case for proper arbitration reference, stating that the costs incurred would abide by the final results of the arbitration proceedings.
Headnote
A) Arbitration Law - Existence of Arbitration Agreement - Jurisdiction of Arbitral Tribunal - Arbitration and Conciliation Act, 1996, Section 11 - The court held that the designate of the Chief Justice and the High Court erred in adjudicating the existence of the arbitration agreement, which is a matter for the arbitral tribunal to decide. The appeal was allowed, and the case was remanded for proper reference to arbitration (Paras 1-4).
Issue of Consideration
Whether the disputes between the parties can be referred to arbitration despite the absence of a written arbitration agreement.
Final Decision
The Supreme Court allowed the appeal, quashed the orders of the High Court and the Chief Justice's nominee, and remanded the case for proper reference to arbitration in accordance with the arbitration clause in the NIT.
Law Points
- Arbitration agreement
- Section 11 Arbitration and Conciliation Act
- 1996
- Jurisdiction of arbitral tribunal
- Administrative functions of Chief Justice's nominee
- Existence of arbitration agreement
