M/S. EMAAR INDIA LTD. versus TARUN AGGARWAL PROJECTS LLP & ANR.

M/S. EMAAR INDIA LTD. versus TARUN AGGARWAL PROJECTS LLP & ANR.

Because the High Court appointed arbitrators under Clause 37 without conducting the required prima facie inquiry into whether the dispute fell within Clause 36 (which by its terms entitles a party to seek specific enforcement before a court and thus renders such disputes non-arbitrable), the High Court's order appointing arbitrators was quashed and set aside and the matter was remitted to the High Court to decide the Section 11(5)&(6) application afresh after holding a preliminary inquiry into arbitrability and whether the dispute falls within Clause 36.

Parties
Appellant: M/S. EMAAR INDIA LTD.; Respondent: TARUN AGGARWAL PROJECTS LLP & ANR.
Jurisdiction
India
Judgment Date
30 September 2022
Procedural Posture
Civil Appeal / Appeal From Judgment and Order Dated 24.12.2021 of the High Court of Delhi Under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996
Outcome
Appeal allowed; impugned High Court judgment and order dated 24.12.2021 quashed and set aside; matter remitted to the High Court for fresh decision after preliminary inquiry into arbitrability
Legal Topics
Appointment of Arbitrator, Non Arbitrability, Preliminary Inquiry at Section 11 Stage, Interpretation of Arbitration Clause
Arbitration and Conciliation Act, 1996 Contract Law Appointment of Arbitrator Non Arbitrability Preliminary Inquiry at Section 11 Stage Interpretation of Arbitration Clause

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Parties

M/S. EMAAR INDIA LTD.

Appellant

TARUN AGGARWAL PROJECTS LLP & ANR.

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment and Order Dated 24.12.2021 of the High Court of Delhi Under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996

Legal Issues

  1. 1 Whether the High Court was justified in appointing arbitrators under Section 11(5) & (6) without holding a preliminary inquiry into arbitrability
  2. 2 Whether disputes falling under Clause 36 of the Addendum Agreement (relating to Clauses 3, 6 and 9) are non-arbitrable and thus excluded from Clause 37 arbitration clause

Ratio Decidendi

Because the High Court appointed arbitrators under Clause 37 without conducting the required prima facie inquiry into whether the dispute fell within Clause 36 (which by its terms entitles a party to seek specific enforcement before a court and thus renders such disputes non-arbitrable), the High Court's order appointing arbitrators was quashed and set aside and the matter was remitted to the High Court to decide the Section 11(5)&(6) application afresh after holding a preliminary inquiry into arbitrability and whether the dispute falls within Clause 36.

Court Disposition

Appeal allowed; impugned High Court judgment and order dated 24.12.2021 quashed and set aside; matter remitted to the High Court for fresh decision after preliminary inquiry into arbitrability

Orders

  • Impugned judgment and order dated 24.12.2021 of the High Court of Delhi appointing arbitrators quashed and set aside
  • Matter remitted to the High Court of Delhi to decide the application under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 afresh after holding a preliminary inquiry/review on whether the dispute is arbitrable and/or whether the dispute falls within Clause 36 of the Addendum Agreement dated...