Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 1996: s. 11 Arbitration and Conciliation Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Arbitration and Conciliation Act, 1996: s. 11 – Power of court u/s. 11 – Scope of – Novation of contract – Plea of – On facts, father formed a private company from his personal funds and distributed the shares among his family members without any consideration – Foreign company approached the father for long- term equity investment and collaboration – Pursuant thereto, family members-appellant and respondents entered into Memorandum of Understanding(MoU), wherein disputes arising in connection thereto were to be referred to an arbitrator – Thereafter, a Shareholders’ Agreement (SHA) and Share Purchase Agreement (SPA) entered into between the family members and the foreign Company, and both SHA and SPA contained an arbitration clause – Dispute between the parties over transfer of shareholding – Notice by appellant-son, invoking arbitration clause contained in the MoU against the respondents – However, reply by the respondents that the MoU ceased to exist on and from the date of the SHA, which superseded and novated the same – Petition u/s. 11 by the appellant – Dismissed by the Single Judge, holding that an arbitration clause of the MoU having perished the MoU owing to novation, invocation of arbitration under the MoU not justified – On appeal, held: Whether the MoU has been novated by the SHA requires a detailed consideration of the clauses of the two Agreements, together with the surrounding circumstances in which these Agreements were entered into, and a full consideration of the law on the subject – It cannot be done, given the limited jurisdiction of a court u/s. 11 – Detailed arguments 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 – Section 11 – court would refer the matter when contentions relating to non-arbitrability are plainly arguable, or when facts are contested – Instant case does not fall within the category of cases which oust arbitration altogether – More so, the Court at this stage is not empowered to determine by way of a mini-trial, the validity of the arbitration agreement – It would usurp the jurisdiction of the arbitral tribunal – Thus, the judgment of the High Court set aside – Matter referred to the sole arbitrator to decide the dispute between the parties – Contract Act, 1872 – s. 62. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2021 INSC 229 |
Petitioner | Sanjiv Prakash |
Respondent | Seema Kukreja And Ors. |
SCR | [2021] 4 S.C.R. 44 |
Judgement Date | 2021-04-06 |
Case Number | 975 |
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