w w w . L a w y e r S e r v i c e s . i n



Medisprouts India Pvt. Limited CIN U93020KL2012PTC030297 a Company Registered Under The Companies Act & Others v/s M/s. Silver Maple Healthcare Services (P) Ltd. CIN U85100DL2010PTC200694 a Company Incorporated Under Companies Act


Company & Directors' Information:- ACT INDIA LIMITED [Dissolved] CIN = L99999TN1986PLC013555

Company & Directors' Information:- I SERVICES INDIA PRIVATE LIMITED [Active] CIN = U72900DL2003PTC118851

Company & Directors' Information:- R G S HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110PB2004PTC047381

Company & Directors' Information:- R G S HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110CH2004PTC027689

Company & Directors' Information:- P. H. HEALTHCARE PRIVATE LIMITED [Active] CIN = U33110MH2010PTC208651

Company & Directors' Information:- B G P HEALTHCARE PRIVATE LIMITED [Active] CIN = U24232GJ2007PTC050417

Company & Directors' Information:- D R HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110GJ2006PTC048008

Company & Directors' Information:- S T SERVICES LTD [Active] CIN = L74140WB1989PLC047210

Company & Directors' Information:- M G F SERVICES LIMITED [Amalgamated] CIN = U65910DL1987PLC029599

Company & Directors' Information:- R S SERVICES PRIVATE LIMITED [Active] CIN = U65100DL1989PTC038061

Company & Directors' Information:- R S SERVICES PRIVATE LIMITED [Active] CIN = U74900DL1989PTC038061

Company & Directors' Information:- S J SERVICES PRIVATE LIMITED [Active] CIN = U74140DL1988PTC034427

Company & Directors' Information:- M J HEALTHCARE PRIVATE LIMITED [Active] CIN = U93090PN2008PTC132455

Company & Directors' Information:- S J HEALTHCARE PRIVATE LIMITED [Active] CIN = U85190MH2005PTC153435

Company & Directors' Information:- AMP E - SERVICES PRIVATE LIMITED [Active] CIN = U51909MN2013PTC008361

Company & Directors' Information:- G J HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110PB1998PTC021049

Company & Directors' Information:- E M SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U93090MH2001PTC131924

Company & Directors' Information:- L M J SERVICES LTD [Active] CIN = L51226WB1983PLC035807

Company & Directors' Information:- L M J SERVICES LTD [Active] CIN = L93000WB1983PLC035807

Company & Directors' Information:- G K SERVICES PRIVATE LIMITED [Active] CIN = U65990MH1994PTC078529

Company & Directors' Information:- I M HEALTHCARE PRIVATE LIMITED [Active] CIN = U24232CH2010PTC032454

Company & Directors' Information:- A K SERVICES PRIVATE LIMITED [Active] CIN = U74899MH1986PTC268851

Company & Directors' Information:- B V SERVICES PVT LTD [Active] CIN = U74140WB1991PTC050946

Company & Directors' Information:- I S A SERVICES PRIVATE LIMITED [Active] CIN = U74140JH1995PTC006387

Company & Directors' Information:- E I C SERVICES PRIVATE LIMITED [Strike Off] CIN = U74899DL1985PTC022426

Company & Directors' Information:- K G HEALTHCARE LIMITED [Active] CIN = U85110TZ1995PLC006402

Company & Directors' Information:- S. R. SILVER PRIVATE LIMITED [Active] CIN = U74120WB2010PTC143753

Company & Directors' Information:- C S HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110GJ2012PTC070018

Company & Directors' Information:- M M HEALTHCARE LIMITED [Active] CIN = U74899DL1988PLC034339

Company & Directors' Information:- A C SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC070774

Company & Directors' Information:- A L B HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U85110UP2002PTC026786

Company & Directors' Information:- S B M HEALTHCARE (INDIA) PRIVATE LIMITED [Active] CIN = U33112DL2005PTC140703

Company & Directors' Information:- H S SERVICES PRIVATE LIMITED [Active] CIN = U74900KA2014PTC074321

Company & Directors' Information:- S A HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U85100OR2014PTC018365

Company & Directors' Information:- AND HEALTHCARE LIMITED [Active] CIN = U51909PB2017PLC046446

Company & Directors' Information:- G V INDIA SERVICES PRIVATE LIMITED [Active] CIN = U74900DL2010PTC212026

Company & Directors' Information:- A TO Z SERVICES PRIVATE LIMITED [Active] CIN = U74999MH2007PTC168484

Company & Directors' Information:- D. S. HEALTHCARE PRIVATE LIMITED [Active] CIN = U24232WB2007PTC115617

Company & Directors' Information:- B N HEALTHCARE PRIVATE LIMITED [Active] CIN = U15412AS2000PTC006258

Company & Directors' Information:- O P T SERVICES INDIA PRIVATE LIMITED [Active] CIN = U63013DL1996PTC083397

Company & Directors' Information:- P AND B HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U24230GJ2013PTC075056

Company & Directors' Information:- P P SERVICES PVT LTD [Active] CIN = U70101WB1991PTC051423

Company & Directors' Information:- A P T SERVICES PRIVATE LIMITED [Amalgamated] CIN = U29219TG1999PTC031903

Company & Directors' Information:- M M D HEALTHCARE LIMITED [Active] CIN = U65921CH1996PLC017595

Company & Directors' Information:- S S SERVICES PVT LTD [Active] CIN = U51109AS1993PTC003956

Company & Directors' Information:- G & G SERVICES PRIVATE LIMITED [Active] CIN = U45201DL2012PTC230905

Company & Directors' Information:- A N Y SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071457

Company & Directors' Information:- N B SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC056484

Company & Directors' Information:- P C SERVICES PRIVATE LIMITED [Strike Off] CIN = U00894KA1985PTC006606

Company & Directors' Information:- A AND R HEALTHCARE PRIVATE LIMITED [Active] CIN = U24239DL1999PTC102404

Company & Directors' Information:- M. V. S SERVICES INDIA PRIVATE LIMITED [Active] CIN = U93000DL2013PTC252172

Company & Directors' Information:- K. N. HEALTHCARE PRIVATE LIMITED [Active] CIN = U85320RJ2018PTC061003

Company & Directors' Information:- M S HEALTHCARE PRIVATE LIMITED [Active] CIN = U24239MH2001PTC130893

Company & Directors' Information:- S D SERVICES PVT LTD [Active] CIN = U51109AS1998PTC005293

Company & Directors' Information:- H AND B SERVICES LIMITED [Strike Off] CIN = U72900MH2004PTC145775

Company & Directors' Information:- C & R SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74140KA1996PTC019645

Company & Directors' Information:- G A S HEALTHCARE PRIVATE LIMITED [Active] CIN = U74999BR2018PTC038700

Company & Directors' Information:- E AND A SERVICES (INDIA) PRIVATE LIMITED [Under Process of Striking Off] CIN = U51900MH1989PTC054373

Company & Directors' Information:- A. H. SERVICES PRIVATE LIMITED [Active] CIN = U74990MH2009PTC193917

Company & Directors' Information:- M E R I T SERVICES PRIVATE LIMITED [Strike Off] CIN = U51900MH1999PTC118445

Company & Directors' Information:- P F P SERVICES PRIVATE LIMITED [Active] CIN = U74900MH2009PTC293633

Company & Directors' Information:- J. R. HEALTHCARE PRIVATE LIMITED [Active] CIN = U85191UP2013PTC054982

Company & Directors' Information:- P F P SERVICES PRIVATE LIMITED [Active] CIN = U74900WB2009PTC139742

Company & Directors' Information:- M A P H HEALTHCARE PRIVATE LIMITED [Under Process of Striking Off] CIN = U85100WB2010PTC144870

Company & Directors' Information:- J. S. P. SERVICES PRIVATE LIMITED [Active] CIN = U63040DL1996PTC075731

Company & Directors' Information:- N. C. HEALTHCARE PRIVATE LIMITED [Active] CIN = U85191DL2007PTC164437

Company & Directors' Information:- N Y HEALTHCARE PRIVATE LIMITED [Active] CIN = U24230GJ2010PTC063348

Company & Directors' Information:- INDIA SERVICES LIMITED [Liquidated] CIN = U99999TN1946PLC000976

Company & Directors' Information:- U M S SERVICES LIMITED [Active] CIN = U03210TZ1982PLC001208

Company & Directors' Information:- A T E SERVICES LIMITED [Strike Off] CIN = U74140MH2001PTC132923

Company & Directors' Information:- D. B. HEALTHCARE PRIVATE LIMITED [Active] CIN = U33205MH2014PTC253439

Company & Directors' Information:- SILVER INDIA LIMITED [Strike Off] CIN = U70109CH2010PLC032519

Company & Directors' Information:- SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74140DL1996PTC078465

Company & Directors' Information:- G I SERVICES INDIA LIMITED [Active] CIN = U74140DL2008PLC184088

Company & Directors' Information:- E AND E SERVICES LIMITED [Strike Off] CIN = U65992KL1988PLC005094

Company & Directors' Information:- S R V N SERVICES PRIVATE LIMITED [Strike Off] CIN = U50200DL2004PTC124035

Company & Directors' Information:- K S V HEALTHCARE PRIVATE LIMITED [Active] CIN = U85195HR2011PTC043767

Company & Directors' Information:- B H SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74999MH2012FTC227035

Company & Directors' Information:- A R SERVICES PRIVATE LIMITED [Active] CIN = U00000DL2001PTC109578

Company & Directors' Information:- J AND J SERVICES PRIVATE LIMITED [Active] CIN = U51900MH1995PTC092554

Company & Directors' Information:- L B D SERVICES PRIVATE LIMITED [Active] CIN = U00359BR1991PTC004694

Company & Directors' Information:- N M HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110MH2000PTC125392

Company & Directors' Information:- T K HEALTHCARE (INDIA ) PRIVATE LIMITED [Strike Off] CIN = U85190MH2003PTC139346

Company & Directors' Information:- A & D HEALTHCARE SERVICES PRIVATE LIMITED [Strike Off] CIN = U74120MH2012PTC229994

Company & Directors' Information:- A R HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110CH2013PTC034820

Company & Directors' Information:- I P HEALTHCARE PRIVATE LIMITED [Active] CIN = U24239DL2003PTC121211

Company & Directors' Information:- A 2 Z HEALTHCARE PRIVATE LIMITED [Active] CIN = U85100DL2010PTC208860

Company & Directors' Information:- K. D. HEALTHCARE INDIA PRIVATE LIMITED [Strike Off] CIN = U85100DL2015PTC281658

Company & Directors' Information:- A 2 Z E SERVICES PRIVATE LIMITED [Strike Off] CIN = U72200KA2006PTC039105

Company & Directors' Information:- M P SERVICES INDIA PRIVATE LIMITED [Strike Off] CIN = U74999PN1999PTC013531

Company & Directors' Information:- B I N A R Y SERVICES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC103072

Company & Directors' Information:- M C SERVICES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U74999PN1999PTC013532

Company & Directors' Information:- D & D SERVICES INDIA PRIVATE LIMITED [Strike Off] CIN = U51909DL1998PTC093967

Company & Directors' Information:- A P HEALTHCARE PRIVATE LIMITED [Active] CIN = U24230MH1999PTC122520

Company & Directors' Information:- K Y O S HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U51397HP2010PTC031280

Company & Directors' Information:- S C L SERVICES PRIVATE LIMITED [Active] CIN = U63012TN2001PTC046650

Company & Directors' Information:- A B SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140DL1998PTC093545

Company & Directors' Information:- G P SERVICES PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC037683

Company & Directors' Information:- T S SERVICES PRIVATE LIMITED [Strike Off] CIN = U85320WB2003PTC095712

Company & Directors' Information:- A. S. V. P. SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999HR2014PTC052304

Company & Directors' Information:- R AND T SERVICES PRIVATE LTD. [Strike Off] CIN = U72501DL1998PTC096640

Company & Directors' Information:- S S SERVICES PVT LTD [Strike Off] CIN = U74140WB1988PTC044009

Company & Directors' Information:- Z F HEALTHCARE PVT. LTD. [Active] CIN = U29295MH2006PTC164255

Company & Directors' Information:- S S D SERVICES PRIVATE LIMITED [Active] CIN = U74910RJ1996PTC012694

Company & Directors' Information:- K. B. B. K. HEALTHCARE PRIVATE LIMITED [Active] CIN = U85110RJ2013PTC041465

Company & Directors' Information:- V & V SERVICES PRIVATE LIMITED [Strike Off] CIN = U74990MH2010PTC206211

Company & Directors' Information:- D S SERVICES PRIVATE LIMITED [Strike Off] CIN = U65923MH2012PTC226482

Company & Directors' Information:- T.H.E. HEALTHCARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U33111MH2012PTC229451

Company & Directors' Information:- P AND I SERVICES PRIVATE LIMITED [Active] CIN = U63090MH1981PTC024997

Company & Directors' Information:- F F C SERVICES PRIVATE LIMITED [Active] CIN = U74900PN2014PTC153348

Company & Directors' Information:- R. B. SERVICES PRIVATE LIMITED [Active] CIN = U74999MH2017PTC302692

Company & Directors' Information:- Q C SERVICES PRIVATE LIMITED [Active] CIN = U74999PN2013PTC148110

Company & Directors' Information:- J S B HEALTHCARE PRIVATE LIMITED [Active] CIN = U74120MH2013PTC248848

Company & Directors' Information:- J S D HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U74120UP2011PTC046578

Company & Directors' Information:- S V T HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U85100TZ2009PTC015287

Company & Directors' Information:- B S K A SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900WB2013PTC198627

Company & Directors' Information:- S N SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900JK2014PTC004110

Company & Directors' Information:- A N S HEALTHCARE PRIVATE LIMITED [Active] CIN = U85100HP2011PTC031745

Company & Directors' Information:- J M HEALTHCARE PRIVATE LIMITED [Active] CIN = U24230CH2007PTC030943

Company & Directors' Information:- R N SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900CH2013PTC034757

Company & Directors' Information:- P R HEALTHCARE PRIVATE LIMITED. [Strike Off] CIN = U24231DL2003PTC120123

Company & Directors' Information:- R S M HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U24232DL2005PTC136255

Company & Directors' Information:- R M E-SERVICES PRIVATE LIMITED [Active] CIN = U72300DL2007PTC166470

Company & Directors' Information:- A Y SERVICES PRIVATE LIMITED [Active] CIN = U74140DL2012PTC239759

Company & Directors' Information:- J N D SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140DL2014PTC264620

Company & Directors' Information:- V. S. SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2012PTC233958

Company & Directors' Information:- S & V SERVICES PRIVATE LIMITED [Active] CIN = U74999DL2015PTC287145

Company & Directors' Information:- M H HEALTHCARE PRIVATE LIMITED [Active] CIN = U74999DL2016PTC289311

Company & Directors' Information:- A R J SERVICES PRIVATE LIMITED [Active] CIN = U72200DL2015PTC286948

Company & Directors' Information:- M K R SERVICES PRIVATE LIMITED [Strike Off] CIN = U93000DL2012PTC242159

Company & Directors' Information:- G W SERVICES PVT LTD [Strike Off] CIN = U79140DL2001PTC111194

Company & Directors' Information:- N T HEALTHCARE PRIVATE LIMITED [Active] CIN = U85100DL2012PTC241304

Company & Directors' Information:- R A HEALTHCARE PRIVATE LIMITED [Strike Off] CIN = U85190DL2009PTC188221

Company & Directors' Information:- B 2 B SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140HR2013PTC049213

Company & Directors' Information:- G & G HEALTHCARE PRIVATE LIMITED [Active] CIN = U51397HR2015PTC057293

Company & Directors' Information:- R K SERVICES PRIVATE LIMITED [Active] CIN = U45200HR2007PTC041783

Company & Directors' Information:- P D HEALTHCARE PRIVATE LIMITED [Active] CIN = U24230GJ2004PTC045131

Company & Directors' Information:- L. V. G. HEALTHCARE PRIVATE LIMITED [Active] CIN = U24233GJ2006PTC047749

Company & Directors' Information:- A. R. T. SERVICES PRIVATE LIMITED [Active] CIN = U51900GJ2009PTC056248

Company & Directors' Information:- B 9 N SERVICES PRIVATE LIMITED [Active] CIN = U74900KL2012PTC032087

Company & Directors' Information:- V J SERVICES PRIVATE LIMITED [Strike Off] CIN = U29242GJ2013PTC074510

Company & Directors' Information:- N I SERVICES PRIVATE LIMITED [Strike Off] CIN = U64202KL2000PTC014355

Company & Directors' Information:- ACT SERVICES PRIVATE LIMITED [Active] CIN = U74910RJ2019PTC067152

Company & Directors' Information:- 7-A SERVICES PRIVATE LIMITED [Active] CIN = U74999DL2019PTC359011

Company & Directors' Information:- L K E SERVICES PRIVATE LIMITED [Active] CIN = U74999RJ2021PTC073635

Company & Directors' Information:- F I SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2001PTC113001

Company & Directors' Information:- C R D SERVICES PVT LTD [Active] CIN = U72300AS1988PTC003097

Company & Directors' Information:- S H G HEALTHCARE PVT LTD [Strike Off] CIN = U85110WB1989PTC047231

Company & Directors' Information:- B I M SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140KA1974PTC002694

Company & Directors' Information:- T Q M SERVICES PVT. LTD. [Strike Off] CIN = U74140DL1999PTC101341

Company & Directors' Information:- B AND M SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140MH1977PTC019880

Company & Directors' Information:- M J B E-SERVICES PRIVATE LIMITED. [Strike Off] CIN = U72400DL2006PTC150832

    O.M.P. (T) (COMM.). No. 88 of 2020

    Decided On, 08 January 2021

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE VIBHU BAKHRU

    For the Petitioners: Shinu J. Pillai, Advocate. For the Respondent: ------



Judgment Text

[Hearing Held Through Video Conferencing](Oral)1. The petitioners have filed the present petition under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act’), inter alia, impugning an order dated 27.11.2020, whereby an application filed by the petitioners seeking termination of arbitral proceedings in terms of Section 32(2)(c) of the Act was rejected along with costs of Rs.20,000/-. The petitioners also pray that orders be passed terminating the arbitral proceedings.2. The disputes between the parties arose in connection with a Sub-Franchise Agreement dated 24.01.2012 entered into between petitioner no. 1 and the respondent. In terms of the said agreement, the respondent had granted petitioner no. 1 non-transferable and non-assignable license to use the trademarks (DHI trademarks) for specified products and for hair transplantation services, in the State of Kerala.3. Petitioner no. 1 is a company and petitioner nos. 2 and 3 are its directors.4. The petitioners claim that petitioner no. 1 terminated the said Sub-Franchise Agreement vide a letter dated 06.03.2019. The respondent claims that it terminated the Sub-Franchise Agreement by a letter dated 16.05.2019, citing various reasons including lapses in health and safety standards.5. By a letter dated 04.06.2019, the respondent invoked the Arbitration Agreement contained in the said Sub-Franchise Agreement for adjudicating the disputes that had arisen between the parties. The respondent also suggested names of two former judges of this Court to be appointed as Arbitrators. The said proposal was declined by the petitioners but subsequently, the parties constituted the Arbitral Tribunal by the petitioner no.1 nominating Mr. MKS Menon, Advocate and the respondent nominating Mr. Amit Bansal, Advocate as arbitrators. Justice Indermeet Kochhar was appointed as the presiding arbitrator.6. The respondent filed a Statement of Claim claiming a sum aggregating Rs.6,31,81,795/- along with interest from the petitioners. The petitioners filed their response and petitioner nos. 1 and 2 made a counter-claim aggregating Rs.19,97,75,452.72 along with interest.7. The petitioners state that the respondent filed a criminal complaint before the Safdarjung Police Station resulting in registration of FIR No. 340/19. The petitioners have challenged the registration of the said FIR in Crl. MC No. 516 of 2020, which is pending before this Court. The petitioners also filed a criminal complaint which led to the registration of FIR No. 107/2020 with the Ernakulam Town South Police Station, Kerala.8. Thereafter, on 06.11.2020, the petitioners filed an application before the Arbitral Tribunal praying that the arbitral proceedings be terminated under Section 32(2)(c) of the Act. The said application was dismissed by an impugned order dated 27.11.2020.9. The petitioners claim that the respondent had entered into the Sub-Franchise Agreement by falsely representing to it that the respondent was a franchise of DHI trademarks under the Master Franchise Agreement dated 26.05.2010. The petitioners claim that the CEO of the respondent company had falsely represented that the respondent had sufficient authority to deal with the brand ‘DHI’, which was owned by entities based in Cyprus. The petitioners further claim that the disputes have become un-arbitrable in view of subsequent developments including registration of FIRs and consequent investigations. The petitioners claim that disputes relating to Intellectual Property Rights are not arbitrable.10. It is further stated that both the parties – petitioner no.1 as well as the respondent – had also filed criminal complaints against each other and consequentially, FIRs have also been registered on the basis of the said complaints.11. The learned counsel appearing for the petitioner submits that since the respondent did not have any right to sub-license or deal with the brand ‘DHI’, the Sub-Franchise Agreement was a consequence of fraud perpetuated on it. He submits that in view of the above, the disputes raised by the respondents are not arbitrable and therefore, the Arbitral Tribunal has no mandate to deal with the said disputes. He submits that in the given circumstances, the Arbitral Tribunal was obliged to terminate the arbitral proceedings under Section 32(2)(c) of the Act. He referred to the recent decision of the Supreme Court in Vidya Drolia v. Durga Trading Corporation: C.A. No. 2402 of 2019 decided on 14.12.2020. He also referred to the decision of the Supreme Court in Lalitkumar V. Sanghavi Thr LRs & Anr. v. Dharamdas V. Sanghavi & Ors.: (2014) 7 SCC 255, in support of his contention that the disputes regarding termination of arbitral proceedings under Section 32(2)(c) of the Act could be agitated by filing a petition under Section 14 of the Act.12. It is not necessary for this Court to examine the contention whether the disputes raised before the Arbitral Tribunal are arbitrable or not. The question whether the disputes are arbitrable relate to the jurisdiction of the Arbitral Tribunal. The doctrine of Kompetenz-Kompetenz is applicable to arbitral proceedings and the arbitral tribunal has the jurisdiction to rule as to the extent of its own competence on the issues before it.13. It is relevant to refer to Section 16 of the Act, which is set out below:“16. Competence of arbitral tribunal to rule on its jurisdiction.— (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,—(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34.”14. It is apparent from the above that any challenge to the jurisdiction of an Arbitral Tribunal necessarily has to be decided by the Arbitral Tribunal itself in the first instance. Thus, the question whether the disputes are arbitrable or not cannot be made the subject matter of proceedings under Section 14 of the Act.15. Plainly, if the Arbitral Tribunal agrees with the contention that the disputes are not arbitrable, arbitral proceedings would require to be terminated and the aggrieved party would have its remedies against the said order/decision. However, if the Arbitral Tribunal rejects the contention that it does not have jurisdiction to decide the claims, the Arbitral Tribunal would proceed to render an award. In the given circumstances, the Arbitral Tribunal may adjudicate the dispute regarding the question of jurisdiction and such decision may be construed as an award (See: Indian Farmers Fertilizer Cooperative Limited v. Bhadra Products: (2018) 2 SCC 534). In such circumstances, the aggrieved party would have a right to apply for setting aside of the said award provided that the grounds as set out under Section 34 of the Act are made out. In either event, recourse to Section 14 of the Act is not available to challenge the decision of the Arbitral Tribunal regarding any question of arbitrability/jurisdiction, unless the issue relates to the ineligibility of an arbitrator to act, such as in terms of Section 12(5) of the Act.16. The decision in the case of Vidya Drolia (supra) is of little assistance to the petitioner. In that case, the Supreme Court has authoritatively held as under:“69. Issue of non-arbitrability can be raised at three stages. First, before the court on an application for reference under Section 11 or for stay of pending judicial proceedings and reference under Section 8 of the Arbitration Act; secondly, before the arbitral tribunal during the course of the arbitration proceedings; or thirdly, before the court at the stage of the challenge to the award or its enforcement.”17. It is, thus, clear that the question whether the disputes are arbitrable is to be examined by the Arbitral Tribunal in the first instance and by the court while examining the award at the stage of challenge under Section 34 of the Act.18. In Vidya Drolia (supra), the Supreme Court also explained that the issue of non-arbitrability is a facet of the jurisdiction of the Arbitral Tribunal and can be examined by the Arbitral Tribunal under Section 16(1) of the Act. And, the remedy of the unsuccessful party raising the objection to the issue of arbitrability is the recourse under Section 34 of the Act. The relevant extract of the said decision is set out below:“119. Section 16(1) of the Arbitration Act accepts and empowers the arbitral tribunal to rule on its own jurisdiction including a ruling on the objections, with respect to all aspects of non-arbitrability including validity of the arbitration agreement. A party opposing arbitration, as per sub-section (2), should raise the objection to jurisdiction of the tribunal before the arbitral tribunal, not later than the submission of statement of defence. However, participation in the appointment procedure or appointing an arbitrator would not preclude and prejudice any party from raising an objection to the jurisdiction. Obviously, the intent is to curtail delay and expedite appointment of the arbitral tribunal. The clause also indirectly accepts that appointment of an arbitrator is different from the issue and question of jurisdiction and non-arbitrability. As per sub-section (3), any objection that the arbitral tribunal is exceeding the scope of its authority should be raised as soon as the matter arises. However, the arbitral tribunal, as per sub-section (4), is empowered to admit a plea regarding lack of jurisdiction beyond the periods specified in sub-section (2) and (3) if it considers that the delay is justified. As per the mandate of sub-section (5) when objections to the jurisdiction under sub-sections (2) and (3) are rejected, the arbitral tribunal can continue with the proceedings and pass the arbitration award. A party aggrieved is at liberty to file an application for setting aside such arbitral award under Section 34 of the Arbitration Act. Sub-section (3) to Section 8 in specific terms permits an arbitral tribunal to continue with the arbitration proceeding and make an award, even when an application under sub-section (1) to Section 8 is pending consideration of the court/forum. Therefore, pendency of the judicial proceedings even before the court is not by itself a bar for the arbitral tribunal to proceed and make an award. Whether the court should stay arbitral proceedings or appropriate deference by the arbitral tribunal are distinctly different aspects and not for us to elaborate in the present reference.120. Section 34 of the Act is applicable at the third stage post the award when an application is filed for setting aside the award. Under Section 34, an award can be set aside - (i) if the arbitration agreement is not valid as per law to which the party is subject; (ii) if the award deals with the disputes not contemplated by or not falling within the submission to arbitration, or contains a decision on the matter beyond the scope of submission to arbitration; and (iii) when the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force. Thus, the competence - competence principle, in its negative effect, leaves the door open for the parties to challenge the findings of the arbitral tribunal on the three issues. The negative effect does not provide absolute authority, but only a priority to the arbitral tribunal to rule the jurisdiction on the three issues. The courts have a ‘second look’ on the three aspects under Section 34 of the Arbitration Act.”19. At this stage, it is also relevant to refer to Section 14 of the Act and the same is set out below:“14. Failure or impossibility to act.—(1) 29[The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if]—(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and(b) he withdraws from his office or the parties agree to the termination of his mandate.(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.(3) If, under this section or sub-section (3) of Section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of Section 12.”20. A plain reading of Section 14 of the Act indicates that it applies only in cases where the Arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without delay. In terms of Clause (b

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) of Section 14(1) of the Act, it also applies where the Arbitrator withdraws from his office or his mandate is terminated by the parties. It is obvious from the plain language of Section 14(1) of the Act that it has no application in cases where the Arbitral Tribunal is proceeding with the reference and the mandate of the Arbitrators is not terminated by the parties.21. Reliance on the case of Lalitkumar (supra) is also misplaced. In the said case, the Arbitral Tribunal had terminated the arbitral proceedings as the concerned party had failed to pay the arbitration fees. The Supreme Court held that such termination would fall within the ambit of Section 32(2)(c) of the Act, that is, on the Arbitral Tribunal’s finding that continuation of arbitral proceedings has become unnecessary or impossible. It is in that context that the Supreme Court held that “the question whether the mandate of the arbitrator stood legally terminated or not can be examined by the court as provided under Section 14(2)”. This decision would have little relevance in cases where the arbitral proceedings have not been terminated; the arbitrators are able to perform their function; and they have neither withdrawn their mandate nor has the same been terminated by the parties.22. As noticed above, the question whether the disputes are arbitrable or not is a matter effecting the jurisdiction of the Arbitral Tribunal and the same is not a subject matter of Section 32(2)(c) of the Act.23. The present petition is, thus, misconceived. The same is, accordingly, dismissed.
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