Case Note & Summary
The applicant, Priya Malay Sheth, filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitral tribunal to adjudicate disputes arising from an Infrastructure and Facility Management Agreement dated 14 July 2018 with the respondent, VLCC Health Care Ltd. The agreement was for the applicant to act as an infrastructure provider for a VLCC slimming, skin, and hair services centre in Mumbai. The applicant alleged that the respondent failed to perform its obligations, including payment of consideration, and that disputes arose. The respondent opposed the application, arguing that the agreement was repudiated by the applicant in 2019 and that the claims were barred by limitation. The court, after considering the submissions, held that the existence of an arbitration agreement was not in dispute and that the issues of repudiation and limitation were matters for the arbitral tribunal to decide. The court appointed a sole arbitrator to adjudicate the disputes, noting that the arbitration clause was broad enough to cover the disputes. The court also directed the parties to appear before the arbitrator for further proceedings.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Existence of Arbitration Agreement - The court examined whether the disputes arising from an Infrastructure and Facility Management Agreement were covered by the arbitration clause. The respondent contended that the agreement was repudiated and that the claims were barred by limitation. The court held that the existence of an arbitration agreement is not in dispute and that the issues of repudiation and limitation are matters for the arbitral tribunal to decide. The court appointed a sole arbitrator to adjudicate the disputes. (Paras 1-20) B) Arbitration Law - Limitation - Section 11 of the Arbitration and Conciliation Act, 1996 - The respondent argued that the claims were barred by limitation as the agreement was terminated in 2019 and the application was filed in 2022. The court held that the question of limitation is a mixed question of fact and law to be decided by the arbitral tribunal, not by the court at the stage of appointment. (Paras 15-18) C) Arbitration Law - Repudiation of Contract - Section 11 of the Arbitration and Conciliation Act, 1996 - The respondent contended that the agreement was repudiated and thus the arbitration clause could not be invoked. The court held that repudiation does not automatically invalidate the arbitration clause; the arbitral tribunal can decide on the validity of the contract and the claims. (Paras 12-14)
Issue of Consideration
Whether the disputes between the parties under the Infrastructure and Facility Management Agreement dated 14 July 2018 are referable to arbitration and whether an arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties. The parties were directed to appear before the arbitrator for further proceedings.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- existence of arbitration agreement
- referral of disputes to arbitration
- prima facie test
- limitation
- repudiation of contract
