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Ambey Mining Pvt. Ltd. and Ors. Vs. Western Coalfields Limited and Ors. - (High Court of Bombay) (02 Aug 2021)

Civil or Commercial dispute are to be adjudicated and resolved by Arbitral Tribunal unless the jurisdiction of the Arbitral Tribunal is excluded either expressly or by necessary implication



By present petition, the Petitioners are seeking issuance of directions to the Respondent No. 1 to proceed with resolution of disputes raised by Petitioners No. 1, through Arbitration in accordance with the "Settlement of Disputes" clause in the contract and also in the Circular dated 7th April 2017, issued by Respondent No. 3, Coal India Ltd. (CIL).

It is the grievance of the Petitioners that, the Respondent Nos. 1 and 2 deliberately and falsely represented that, the Respondent No. 1 would provide a total quantity of 31000 tons of coal with minimum daily quantity of 3000 tons of coal crushing. Whereas, during the course of three years since the issuance of the Work Order, merely an average of approximately 188.42 tons of coal per day was provided, resultantly the manpower and crusher of the Petitioner No. 1 remained largely unutilized, causing heavy financial losses. It was thus, requested by the Petitioner for foreclosure of the contract or settlement of dispute as per the clause under NIT or by any other machinery for dispute settlement including arbitration as provided in the circular dated 7th April 2017, issued by CIL. However, the Respondent Nos. 1 and 2 did not reply to any of the correspondence/representations, which led the petitioner to file the present petition.

Arbitration is a private dispute resolution mechanism, whereby two or more parties agree to resolve their current or future dispute by Arbitral Tribunal as an alternative to adjudication by the Courts or public Forum established by law. The Arbitration Agreement gives contractual authority to the Arbitral Tribunal to adjudicate the disputes and bind the parties.

In the case of Booz Allen & Hamilton Inc. vs. SBI Home Finance Ltd., the Hon'ble Supreme Court observes that civil or commercial dispute, whether contractual or non-contractual, which can be decided by the Court, is in principle capable of being adjudicated and resolved by Arbitral Tribunal unless the jurisdiction of the Arbitral Tribunal is either expressly or by necessary implication excluded.

The term "Agreement" is not defined in the Act of 1996, however, it is defined in Section 10 of the Contract Act, 1872, as the contracts made by pre-consent of the parties competent to contract, for a lawful consideration and that lawful object and are not thereby expressly declared to be void. Thus, the arbitration agreement must specify the objective mandates of the Law of Contract to qualify as an agreement.

Thus, there is no doubt that Section 16(1) of the Act of 1996 empowers the Arbitral Tribunal to rule upon its own jurisdiction, including ruling on any objection with respect to all aspects of non-arbitrability, including validity of arbitration agreement. The relief sought in this petition could be sought under Section 11(6) of the Act of 1996 and in case of any issue relating to arbitrability, the Arbitral Tribunal is empowered to rule on its own jurisdiction, including validity of the arbitration agreement.

As the Act of 1996 being self-contained and exhaustive one, and only such acts as are mentioned in the Act of 1996 are permissible to be done and the acts not mentioned therein are not permissible to be done. The present petition under Article 226 of the Constitution of India is not maintainable. Petition dismissed.

Relevant : Booz Allen & Hamilton Inc. vs. SBI Home Finance Ltd. MANU/SC/0533/2011


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