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TMI BlogUpholding Arbitral Autonomy: Supreme Court Clarifies Scope of Judicial Interference u/s 11X X X X Extracts X X X X X X X X Extracts X X X X ..... non-existent. 2. Core legal questions presented: Whether the issue of accord and satisfaction can be examined by the referral court while deciding an application for appointment of an arbitrator u/s 11 of the Act. What is the scope of judicial interference permissible at the stage of appointing an arbitrator u/s 11 of the Act? What is the effect of the Supreme Court's decision in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act 1966 and the Indian Stamp Act 1899 on the scope of powers of the referral court u/s 11 of the Act? ARGUMENTS PRESENTED The primary contentions of the parties were as follows: Appellant's Arguments: The underlying contract between the parties stood discharged by accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n those aspects vests with the tribunal itself. ( Para 96-98 ) The Court discussed the significance of arbitral autonomy and the right to arbitrate as fundamental aspects of individual autonomy and liberty, citing renowned author Gary B. Born and international precedents. ( Para 99-106 ) 2. Scope of Judicial Interference u/s 11 The Court analyzed the differences between Sections 8 and 11 of the Act, noting that while Section 8 empowers any judicial authority to refer parties to arbitration, Section 11 confers exclusive power upon the High Court and the Supreme Court. The standard of scrutiny u/s 11 is confined to the examination of the existence of an arbitration agreement. ( Para 108-109 ) Referring to the Statement of Objects and Reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be looked into by the referral court before the tribunal has had the opportunity to do so. ( Para 116 ) The Court emphasized that by referring disputes to arbitration and appointing an arbitrator u/s 11, the referral court upholds the parties' original understanding to resolve disputes through arbitration. It does not dilute the sanctity of accord and satisfaction or allow the claimant to walk back on its contractual undertaking. ( Para 117 ) 4. Evaluation of Precedents and Clarification The Court clarified its observations in M/s ARIF AZIM CO. LTD. Versus M/s APTECH LTD. - 2024 (3) TMI 121 - Supreme Court (LB) regarding the applicability of the Limitation Act, 1963, to applications u/s 11(6) of the Act. The Court affirmed its fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept open to be taken up before the arbitrator. ( Para 138 ) The legal principles established or applied in this judgment include: Upholding the principle of arbitral autonomy and judicial non-interference in arbitral proceedings, in line with the scheme of the Arbitration and Conciliation Act, 1996. Limiting the scope of inquiry by the referral court u/s 11 to the prima facie existence of an arbitration agreement, without delving into the merits of the dispute or the validity of the agreement. Recognizing the exclusive jurisdiction of the arbitral tribunal to rule on issues pertaining to its own jurisdiction, including the effect of accord and satisfaction on the arbitration agreement. Clarifying the position of law regarding the applicabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral process. The Court extensively refers to international precedents and scholarly works, such as those by Gary B. Born, to highlight the significance of arbitral autonomy and the right to arbitrate as fundamental aspects of individual liberty and access to justice. The judgment also acknowledges the legislative intent behind the Arbitration and Conciliation (Amendment) Act, 2015, which aimed to restrict the scope of judicial interference at the stage of appointing an arbitrator u/s 11. 3. Application in the Current Case In the present case, the Supreme Court applied the principles of arbitral autonomy and negative competence-competence to hold that the issue of accord and satisfaction falls within the exclusive jurisdiction of the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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