Section 11 Arbitration Act- Court By Default Would Refer To Arbitration When Contentions On Non- Arbitrability Are Plainly Arguable: Supreme Court

The Supreme Court observed that while dealing with petition under Section 11 of the Arbitration and Conciliation Act, the Court by default would refer the matter when contentions relating to non­-arbitrability are plainly arguable.

In such case, the issue of non­-arbitrability is left open to be decided by the Arbitral Tribunal, the bench comprising Justices Indira Banerjee and Abhay S. Oka observed.

The bench observed thus while disposing the appeals against orders passed by a Single Judge of the Bombay High Court on the petitions under Section 11 of the Arbitration and Conciliation Act.

In this case, allowing a petition under Section 11 of the Arbitration Act , the Single Judge of the Bombay High Court appointed a member of the Bar as the sole Arbitrator. The other party approached the Apex Court essentially contending that the High Court did not issue and serve a notice of the petition filed under Section 11 of the Arbitration Act. He submitted that he was admitted in intensive care unit of a hospital on 3rd May 2021 and was discharged on 3rd June 2021. As the appellant was not given a notice of the date fixed in the petition under Section 11, he could not urge before the Single Judge that the claim was barred by limitation and that there was no arbitration clause, it was contended.

The bench noted that the impugned order refers to the affidavit of service of notice.

"A judicial notice will have to be taken of a long standing and consistent practice followed on the Original Side of the Bombay High Court. The practice is that the advocates serve a notice of the proceedings filed in the Court even before it comes up before the Court. The Court acts upon such service effected by the advocate on proof thereof being produced in the form of an affidavit of service. Therefore, there is nothing illegal about the High Court acting upon the advocate's notice admittedly served to the appellant. According to the case of the appellant, he was admitted to a hospital on 3rd May 2021. However, the advocate's notice of the petition under Section 11 was served upon the appellant in November 2019. Therefore, the appellant could have always made arrangements to contest the said petition. Therefore, we reject the first submission made by the learned Senior Counsel appearing for the appellant regarding the failure to serve the notice of the petition under Section 11.", the court said.

Referring to Vidya Drolia & Others v. Durga Trading Corporation, the court observed thus:

11. Thus, this Court held that while dealing with petition under Section 11, the Court by default would refer the matter when contentions relating to non­-arbitrability are plainly arguable. In such case, the issue of non­-arbitrability is left open to be decided by the Arbitral Tribunal. On perusal of the impugned order, we find that the issues of non-arbitrability and the claim being time barred have not been concluded by the learned Single Judge of the Bombay High Court. In fact, in clause (vii) of the operative part of the impugned Order, the learned Single Judge has observed that the contentions of the parties have been kept open. 

The court then dismissed the appeals

Case name: Mohammed Masroor Shaikh v. Bharat Bhushan Gupta

Citation: 2022 LiveLaw (SC) 120

Case no.|date: CA 874 OF 2022 | 2 Feb 2022

Coram: Justices Indira Banerjee and Abhay S. Oka

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