Case Note & Summary
The appeal arose from a judgment by the High Court of Bombay, which allowed Go Airlines' appeal against an order of the Arbitrator regarding the jurisdiction to consider a counter claim for CENVAT invoices. The dispute originated from an Aviation Fuel Supply Agreement between Bharat Petroleum Corporation Limited (BPCL) and Go Airlines, with the initial agreement dated 01.01.2007 and a subsequent agreement from 01.04.2009. BPCL sought payment for delayed fuel supply, while Go Airlines raised counter claims for CENVAT invoices and damages due to imposed 'Cash and Credit' terms. The Arbitrator initially ruled that the counter claim regarding CENVAT invoices was beyond jurisdiction but allowed the claim for damages. Go Airlines appealed this decision, leading to the High Court's ruling that the Arbitrator had jurisdiction to consider the counter claim. The Supreme Court upheld the High Court's decision, emphasizing that the jurisdiction of the Arbitrator should be determined through enquiry rather than outright rejection. The court noted that the counter claim's relation to the agreement and its arbitrability were questions for the Arbitrator to resolve. The appeal was dismissed, affirming the High Court's judgment and allowing the Arbitrator to proceed with the matter on its merits (Paras 1-25).
Headnote
A) Arbitration Law - Jurisdiction of Arbitrator - Scope of Reference - Arbitration and Conciliation Act, 1996, Section 16 - The court held that the rejection of the counter claim at the threshold by the Arbitrator was improper, as the jurisdiction of the Arbitrator to consider the counter claim regarding CENVAT invoices should be determined after due enquiry. The High Court's decision to set aside the Arbitrator's order was affirmed (Paras 23-25).
Issue of Consideration
Whether the counter claim regarding CENVAT invoices was beyond the scope of reference to arbitration and whether the High Court was right in holding that the Arbitrator had jurisdiction to consider the counter claim.
Final Decision
The Supreme Court dismissed the appeal, affirming the High Court's judgment that the Arbitrator had jurisdiction to consider the counter claim regarding CENVAT invoices.
Law Points
- Arbitration jurisdiction
- CENVAT invoices
- counter claims
- Arbitration and Conciliation Act
- 1996
- Section 16
- implied terms of contract
