Case Note & Summary
The applicant, Maharashtra State Power Generation Company Limited, filed a Miscellaneous Civil Application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve a dispute with the non-applicant, Western Coalfields Limited, arising out of a contract. The existence of an arbitration clause was not disputed. The core issue was whether the dispute fell within the scope of the arbitration clause, which referred to disputes relating to the interpretation and application of contract provisions. The applicant argued that the words 'such dispute or difference' in the clause indicated that only disputes about interpretation and application were arbitrable. The court, after hearing both sides, held that the dispute was indeed covered by the arbitration clause and that the arbitrator could decide his own jurisdiction under Section 16 of the Act. The court allowed the application and appointed a retired judge of the Bombay High Court as the sole arbitrator to adjudicate the dispute.
Headnote
A) Arbitration Law - Scope of Arbitration Clause - Interpretation of Contract - The arbitration clause covered disputes relating to interpretation and application of contract provisions - The court held that the words 'such dispute or difference' refer to disputes about interpretation and application of the contract, and thus the dispute is arbitrable (Paras 2-3). B) Arbitration Law - Jurisdiction of Arbitrator - Section 16 of the Arbitration and Conciliation Act, 1996 - The arbitrator has the power to rule on his own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement - The court held that the arbitrator can decide the scope of his jurisdiction (Para 4).
Issue of Consideration
Whether the dispute raised by the applicant falls within the scope of the arbitration clause and whether the arbitrator can decide his own jurisdiction.
Final Decision
The court allowed the application and appointed a retired judge of the Bombay High Court as the sole arbitrator to adjudicate the dispute between the parties.
Law Points
- Arbitration clause
- scope of arbitration
- interpretation of contract
- Section 16 of Arbitration and Conciliation Act
- 1996
- jurisdiction of arbitrator
