Sushma Shivkumar Daga vs Madhurkumar Ramkrishnaji Bajaj 2023 INSC 1081 – Ss. 8,11,16 Arbitration Act

Arbitration and Conciliation Act, 1996; Section 8,11 – After the 2015 amendment, primarily the court only has to see whether a valid arbitration agreement exists. Additionally, the clear non-arbitrability of cases, such as where a party to the agreement is statutorily protected, such as a consumer “has also to be seen by the Court”- Short of the narrow field stated above, the scope of judicial scrutiny at the stage of Section 11 (6) or Section 8 is extremely limited. (Para 17)

Arbitration and Conciliation Act, 1996; Section 8,11 – A plea of fraud must be serious in nature in order to oust the jurisdiction of an Arbitrator – Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710 – two conditions which must be satisfied before the Court can refuse to refer the matter to the Arbitrator, a forum consciously decided by parties in an agreement. (1) whether the plea permeates the entire contract and above all, the arbitration agreement, rendering it void (2) whether the allegation of fraud touches upon the internal affairs of the parties inter se having no implication in the public domain. The allegations must have some implication in public domain to oust the jurisdiction of an Arbitrator, if an allegation of fraud exists strictly between the parties concerned, the same will not be termed to be as a serious nature of fraud and hence would not be barred for arbitration. (Para 20)

Arbitration and Conciliation Act, 1996; Section 8,11- Referred to Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1, – Fourfold test for determining when the subject-matter of a dispute in an arbitration agreement is not arbitrable. These were: “(1) When cause of action and subjectmatter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem. (2) When cause of action and subjectmatter of the dispute affects third-party rights; have erga omnes effect; require centralised adjudication, and mutual adjudication would not be appropriate and enforceable. (3) When cause of action and subjectmatter of the dispute relates to inalienable sovereign and public interest functions of the State and hence mutual adjudication would be unenforceable. (4) When the subject-matter of the dispute is expressly or by necessary implication non-arbitrable as per mandatory statute(s).”

Specific Relief Act, 1963 ; Section 31 – Whether it is a suit for cancellation of a deed or a declaration of rights rising from the deed, it would only be an action in personam and not in rem – Deccan Paper Mills v. Regency Mahavir Properties, (2021) 4 SCC 786. (Para 19)

Arbitration and Conciliation Act, 1996; Section 8,11– Court will only decline reference under Section 8 or under Section 11 of the Act in rare cases where the Court is certain that either the arbitration agreement is non-existent, or the dispute is itself “manifestly non-arbitrable”. – Referred to NTPC Ltd. v. SPML Infra Ltd. (2023) 9 SCC 385, SNL v. Nortel Networks (2021) 5 SCC 738

Arbitration and Conciliation Act, 1996; Section 16 – All jurisdictional issues including the existence and the validity of an arbitration clause can be gone into by the Arbitral Tribunal. In other words, the Arbitral Tribunal is competent to decide on its own competence – The arbitration clause in a contract would be an independent agreement in itself and the arbitrator is empowered to decide upon its existence and validity. (Para 15-16)