{"id":278722,"date":"2022-11-29T11:00:56","date_gmt":"2022-11-29T05:30:56","guid":{"rendered":"https:\/\/sccblog-linux-staging-1.azurewebsites.net\/?p=278722"},"modified":"2022-11-29T11:14:03","modified_gmt":"2022-11-29T05:44:03","slug":"supreme-court-legal-research-legal-news-updates-arbitration-conciliation-act-1996-section-116-scope-explained","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/11\/29\/supreme-court-legal-research-legal-news-updates-arbitration-conciliation-act-1996-section-116-scope-explained\/","title":{"rendered":"Explained| Three types of issues that can be considered in an application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"text-indent: 18pt;\">&#160; &#160;<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\"><b>Supreme Court<\/b>: In an appeal against the judgment passed by Telangana High Court, wherein the High Court dismissed the application filed by the appellant under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544910\">11(6)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\">Arbitration and Conciliation Act, 1996<\/a> (&#8216;Act of 1996&#8217;), the division bench of B.R Gavai and <b>B.V. Nagarathna<\/b>*, JJ. held that the High Court was not right in dismissing the petition under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544910\">11(6)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\">Act of 1996<\/a> filed by the appellant by giving a finding on novation of the share purchase agreement between the parties, as the said aspect would have a bearing on the merits of the controversy between the parties. Therefore, it must be left to the Arbitrator to decide on the said issue also. Hence, sets aside the impugned judgment passed by the High Court.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">The point for consideration was whether the judgment of the High Court calls for any interference or modification by the Supreme Court?<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">The plea taken by the respondent was that, owing to novation of share purchase agreement, the arbitration clause no longer existed so as to resolve the dispute between the parties through arbitration.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">Per Contra, the plea of the appellant is that there was no such novation of the share purchase agreement, and the arbitration clause was very much available and hence, the High Court ought to have referred the matter to arbitration.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">The Court referred to <i>National Insurance Co. Ltd.<\/i> v. <i>Boghara Polyfab (P) Ltd.<\/i>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/0xtZ0Abn\">(2009) 1 SCC 267<\/a>, wherein the Court has identified and segregated the issues that could be considered in an application filed under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544910\">11(6)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\">Act of 1996<\/a> into three categories.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">The Court said that the Chief Justice or his designate is bound to decide the issues in the first category; the issues falling under the second category are raised in an application under Section 11 of the Arbitration Act, the Chief Justice or his designate may decide them or may leave it open with a direction to the Arbitral Tribunal to decide the same. But if the Chief Justice or his designate chooses to examine the issue and decides it, the Arbitral Tribunal cannot re-examine the same issue. As far as the issues which arise in the third category are concerned, they must be dealt with exclusively by the Arbitral Tribunal, such as excepted or excluded matters. It would also include the merits of any claim involved in arbitration.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">The Court also took note of <i>Vidya Drolia<\/i> v. <i>Durga Trading Corpn.<\/i>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/6K00z7rA\">(2019) 20 SCC 406<\/a>, wherein it was observed that the first category of issues, namely, whether the party has approached the appropriate High Court, whether there is an arbitration agreement, and whether the party who has applied for reference is party to such agreement, would be subject to a more thorough examination in comparison to the second and third issues which are presumptively, save in exceptional cases, for the arbitrator to decide.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">Thus, the Court said that the Court at the referral stage can interfere only when it is manifest that the claims are ex facie time barred and dead, or there is no subsisting dispute. Further, in the context of the issue of the limitation period, in case of disputed &#8220;no claim certificate&#8221; or defence on the plea of novation and &#8220;accord and satisfaction&#8221; it should be referred to the Arbitral Tribunal for a decision on merits.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">Further, the Court referred to <i>Damodar Valley Corpn.<\/i> v. <i>K.K. Kar<\/i>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/6VQDHl49\">(1974) 1 SCC 141<\/a> and said that even if the performance of the contract has come to an end, the contract can still be in existence for certain purposes in respect of disputes arising under it or in connection with it.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">Thus, the Court held that the High Court was not right in dismissing the petition under Section <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0001544910\">11(6)<\/a> of the <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-0002726958\">Act of 1996<\/a> filed by the appellant.<\/p>\n<p style=\"text-indent: 18pt; margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\">Meenakshi Solar Power (P) Ltd. v. Abhyudaya Green Economic Zones (P) Ltd., <a href=\"http:\/\/www.scconline.com\/DocumentLink\/kyW66eia\">2022 SCC OnLine SC 1616<\/a>, decided on 23-11-2022<\/span>]<\/p>\n<p style=\"text-indent: 18pt;\"><strong><span style=\"color: #000080;\">*Judgment by: Justice BV Nagarathna.<\/span><\/strong><\/p>\n<hr\/>\n<p style=\"text-indent: 18pt;\"><strong><span style=\"color: #000080;\">*Apoorva Goel, Editorial Assistant has reported this brief.<\/span><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>&#160; &#160; Supreme Court: In an appeal against the judgment passed by Telangana High Court, wherein the High Court dismissed the application <\/p>\n","protected":false},"author":67011,"featured_media":278724,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[53245,35672,3226,43926,10131,34829,53246,44997,53247,5363],"class_list":["post-278722","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-accord-and-satisfaction","tag-arbitral-tribunal","tag-arbitration","tag-arbitration-act","tag-arbitration-and-conciliation-act","tag-conciliation","tag-no-claim-certificate","tag-novation","tag-share-purchase-agreement","tag-supreme-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Explained| Three types of issues that can be considered in an application filed under Section 11(6) of the 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questions involving novation of contract can&#8217;t be decided by Court under Section 11 of the Arbitration and Conciliation Act: Supreme Court","author":"Prachi Bhardwaj","date":"April 11, 2021","format":false,"excerpt":"\"Detailed arguments on whether an agreement which contains an arbitration clause has or has not been novated cannot possibly be decided in exercise of a limited prima facie review as to whether an arbitration agreement exists between the parties.\"","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-3-3.jpg?resize=350%2C200&ssl=1 1x, 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parties. Facts of the Case The respondent filed an application under Section 11\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Calcutta High Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/calcutta_high_court.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/calcutta_high_court.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/calcutta_high_court.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/calcutta_high_court.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/calcutta_high_court.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":6535,"url":"https:\/\/www.scconline.com\/blog\/post\/2015\/02\/23\/law-laid-down-under-s-8-of-the-arbitration-and-conciliation-act-1996-explained\/","url_meta":{"origin":278722,"position":2},"title":"Law laid down under S. 8 of the Arbitration &#038; Conciliation Act, 1996, explained","author":"Sucheta","date":"February 23, 2015","format":false,"excerpt":"Supreme Court: Deciding a short question as to what should be the approach of the Court, once an application is duly filed in terms of Section 8 of the Arbitration and Conciliation Act, 1996 before the civil court, the bench of MY Eqbal and Kurian Joseph, JJ held that the\u2026","rel":"","context":"In &quot;Supreme Court&quot;","block_context":{"text":"Supreme Court","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/supremecourt\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":6219,"url":"https:\/\/www.scconline.com\/blog\/post\/2015\/02\/23\/law-laid-down-under-s-8-of-the-arbitration-and-conciliation-act-1996-explained-2\/","url_meta":{"origin":278722,"position":3},"title":"Law laid down under S. 8 of the Arbitration &#038; Conciliation Act, 1996, explained","author":"Sucheta","date":"February 23, 2015","format":false,"excerpt":"Supreme Court: Deciding a short question as to what should be the approach of the Court, once an application is duly filed in terms of Section 8 of the Arbitration and Conciliation Act, 1996 before the civil court, the bench of MY Eqbal and Kurian Joseph, JJ held that the\u2026","rel":"","context":"In &quot;Alternate Dispute Resolution&quot;","block_context":{"text":"Alternate Dispute Resolution","link":"https:\/\/www.scconline.com\/blog\/post\/category\/alternate_dispute_resolution\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2015\/10\/scc-blog_Page_9.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":200608,"url":"https:\/\/www.scconline.com\/blog\/post\/2018\/08\/24\/suit-not-maintainable-as-matter-to-go-through-arbitration-by-virtue-of-section-8-of-the-arbitration-and-conciliation-act-1996\/","url_meta":{"origin":278722,"position":4},"title":"Suit not maintainable as matter to go through arbitration by virtue of Section 8 of the Arbitration and Conciliation Act, 1996","author":"Bhumika Indulia","date":"August 24, 2018","format":false,"excerpt":"Punjab and Haryana High Court: A Single Judge Bench comprising of Amit Rawal, J., allowed a revision petition which was filed against the order whereby an application submitted under Section 8 of the Arbitration and Conciliation Act, 1996 for resolution of dispute was dismissed by the Trial Court. The facts\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":63681,"url":"https:\/\/www.scconline.com\/blog\/post\/2016\/08\/25\/section-45-of-arbitration-and-conciliation-act-1996-does-not-include-the-enquiry-as-to-the-legality-and-validity-of-the-substantive-contract\/","url_meta":{"origin":278722,"position":5},"title":"Section 45 of Arbitration and Conciliation Act 1996 does not include the enquiry as to the legality and validity of the substantive contract","author":"Sucheta","date":"August 25, 2016","format":false,"excerpt":"Supreme Court: A pivotal question that came before the Court for consideration was that whether two Indian companies, Sasan Power Ltd. and NACC India Ltd., each of whom have been incorporated and registered in India could in law be said to have \u201cmade an agreement referred to in Section 44\u201d\u2026","rel":"","context":"In &quot;Alternate Dispute Resolution&quot;","block_context":{"text":"Alternate Dispute Resolution","link":"https:\/\/www.scconline.com\/blog\/post\/category\/alternate_dispute_resolution\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2017\/09\/Supreme-Court_Colour.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/278722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67011"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=278722"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/278722\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/278724"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=278722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=278722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=278722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}