NDLI: Vidya Drolia and Others Vs. Durga Trading Corporation

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1996: Arbitration and Conciliation Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
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 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 Referred Case 18 Referred Case 19 Referred Case 20 Referred Case 21 Referred Case 22 Referred Case 23 Referred Case 24 Referred Case 25 Referred Case 26 Referred Case 27 Referred Case 28 Referred Case 29 Referred Case 30 Referred Case 31 Referred Case 32 Referred Case 33 Referred Case 34 Referred Case 35 Referred Case 36 Referred Case 37
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Reference Answered
Headnote	Arbitration and Conciliation Act, 1996:ss. 8 and 11 – Jurisdiction under – Judicial review – Scopeand ambit of – Held: Per Sanjiv Khanna, J. – Scope of judicialreview and jurisdiction of the Court u/s. 8 and 11 is identical, butextremely limited and restricted – The court may interfere at thestage of jurisdiction u/ss. 8 and 11, when it is manifestly and exfacie certain that the arbitration agreement is non-existent, invalidor the disputes are non-arbitrable – The court can not interfereand refer the matter for arbitration when contentions relating tonon-arbitrability are plainly arguable; when consideration insummary proceedings would be insufficient and inconclusive; whenfacts are contested; and when the party opposing arbitration adoptsdelaying tactics or impairs conduct of arbitration proceedings –This is not the stage for the court to enter into a mini trial or elaboratereview so as to usurp the jurisdiction of the arbitral tribunal – Atthis stage the court is required to affirm and uphold integrity andefficacy of arbitration as an alternative dispute resolution mechanism– Per Ramana, J. – Sections 8 and 11 have the same ambit i.e.limited judicial interference at reference stage – Usually subjectmatter arbitrability cannot be decided at the stage of ss. 8 and 11,unless it’s a clear case of deadwood – Unless a party has establisheda prima facie case of non-existence of valid arbitration agreement,the court has to refer the matter for arbitration or to appoint anarbitrator as the case may be i.e. ‘when in doubt, do refer’ – Thescope of the court to examine the prima facie validity of an arbitrationagreement includes only (i) whether arbitration agreement was inwriting; (ii) whether such agreement was contained in exchange ofletters, telecommunication etc. (iii) whether the core contractualingredients qua arbitration agreement were fulfilled; and (iv) onrare occasions, whether the subject-matter of dispute is arbitrable.Arbitration:Landlord-tenant dispute – Governed by Transfer of PropertyAct – Arbitrability of – Held: In order to determine whether thesubject-matter of a dispute in an arbitration agreement is notarbitrable, the four-fold test is when cause of action and subjectmatter of dispute (i) relates to action in rem that do not pertain tosubordinate rights in personam that arise from rights in rem; (ii)affects third party rights, have erga omnes effect, require centralizedadjudication and mutual adjudication would not be appropriateand enforceable; (iii) relates to inalienable sovereign and publicinterest functions of the State and hence mutual adjudication wouldbe unenforceable;(iv) expressly or by necessary implication non-arbitrable as per mandatory statutes – However, these tests are notwatertight compartments – Landlord-tenant disputes governed byTransfer of Property Act are arbitrable as per the testsaforementioned – However, such disputes, if covered by rent controllegislation giving exclusive jurisdiction to specific court or forum,would not arbitrable – Transfer of Property Act, 1882.Deeds and Documents:Arbitration agreement – Interpretation of – Held: The approachas to interpretation of arbitration agreement would depend uponvarious factors such as language, parties, nature of relationship,factual background in which the agreement was entered, etc. – Incase of pure commercial disputes, more appropriate principle ofinterpretation would be the one of liberal construction as there ispresumption in favour of one-stop adjudication.Doctrines/Principles:Principle of ‘separation’ and ‘competence-competence’ –Applicability of – Discussed.Doctrine of ‘election’ – Applicability of.‘Second look’ principle – Applicability of.Judgment:Judgment in rem and judgment in personam – Distinctionbetween – Discussed.Words and Phrases:‘Agreement’ – Meaning of.‘Arbitration agreement’ – Meaning of.‘Legal relationship’ – Meaning of.‘Arbitration agreement in writing’ – Meaning of.‘Existence’ – Meaning of.‘Examination’ – Meaning of.‘Existence of an arbitration agreement’ – Meaning of.‘Arbitrability’ – Meaning of.‘Prima facie’ – Meaning of.
Judge	Hon'ble Mr. Justice Sanjiv Khanna
Neutral Citation	2020 INSC 697
Petitioner	Vidya Drolia And Others
Respondent	Durga Trading Corporation
SCR	[2020] 11 S.C.R. 1001
Judgement Date	2020-12-14
Case Number	2402

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