Court emphasizes limited scope of Referral Court under Section 11(6-A) of the Arbitration and Conciliation Act, appoints Justice N.N. Tiwari as Arbitrator.
In a decisive ruling, the Jharkhand High Court, under the aegis of Chief Justice M.S. Sonak, appointed Justice N.N. Tiwari (Retd.) as the arbitrator in the ongoing dispute between K.S. Multi Facility Services Private Limited and Jharkhand State Beverages Corporation. This appointment comes after repeated adjournments sought by the respondent, Jharkhand State Beverages Corporation, which the court deemed as attempts to delay proceedings.
The court's judgment, delivered on May 8, 2026, stemmed from an application filed by K.S. Multi Facility Services, invoking Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The petitioner had initially approached the court through a writ petition, which was opposed by the respondent on grounds of an existing arbitration clause in their agreement. Consequently, the writ petition was withdrawn, and the arbitration clause was invoked by the petitioner.
Despite multiple opportunities, the respondent failed to comply with the court's earlier conditions, including the payment of costs amounting to Rs. 10,000. The court criticized the respondent's reasons for adjournment, labeling them as unconvincing and indicative of a strategy to delay the arbitration process.
In its ruling, the court highlighted the limited scope of the Referral Court under Section 11(6-A) of the Arbitration and Conciliation Act. The court's role is confined to examining the existence of an arbitration agreement, with substantive issues of validity and jurisdiction reserved for the Arbitral Tribunal. This ensures the efficiency and autonomy of the arbitral process, consistent with the doctrine of competence-competence.
Justice N.N. Tiwari was appointed as the arbitrator, with instructions to ensure compliance with the necessary declarations under Section 12(2) of the Act. The costs of arbitration are to be equally shared by both parties, with a directive for the arbitration proceedings to conclude expeditiously in accordance with Section 29(A) of the Act.
The court's decision underscores the importance of adhering to contractual arbitration agreements and discourages undue litigation delays. The parties have been left with the liberty to raise any objections during the arbitration process, with the court maintaining neutrality on the merits of such objections.
This judgment reiterates the judiciary's commitment to uphold the legislative intent of the Arbitration and Conciliation Act, facilitating a streamlined dispute resolution process through arbitration.
Bottom line:-
Under Section 11(6-A) of the Arbitration and Conciliation Act, 1996, the Referral Court is confined to examining the prima facie existence of an arbitration agreement, leaving substantive questions about its validity and jurisdiction to the Arbitral Tribunal.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 11(6-A), 12(2), 16, 29(A), 7; 5th and 6th Schedules of the Act.
