Telangana High Court

Piramal Swasthya Management And ... vs Government Of Andhra Pradesh on 25 January, 2024

Author: K. Lakshman

Bench: K. Lakshman

          HON'BLE SRI JUSTICE K. LAKSHMAN

          ARBITRATION APPEAL No.71 of 2020

ORDER:

Heard Sri Rahul Sarella, learned counsel appearing

for the applicant and Sri P. Govind Reddy, learned

Government Pleader appearing for respondent No.1. There

is no representation on behalf of respondent No.2. Perused

the record.

2. This application is filed under Section 11(6) of the

Arbitration and Conciliation Act, 1996 (herein after

referred to 'the Act, 1996', for brevity) seeking to appoint

sole Arbitrator in terms of Arbitration Clause in the

Service Level Agreement dated 27-02-2016, viz.,

Clause 14(1), for adjudication of the claims and disputes

between the applicant and the respondents.

3. Applicant and respondent No.1 have entered into a

Service Level Agreement dated 27-02-2016 on the specific

terms and conditions agreed thereon to provide service for

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operation and maintenance of Mobile Medical Units

(MMUs) attached to 104 Fixed Day Health Services (FDHS)

for a period of 3 years from 01-04-2016 to 31-03-2019. As

per the terms of the said agreement, applicant is required

to submit invoices on monthly basis to respondent No.1

for every Mobile Medical Unit and respondent No.1 would

pay an amount of Rs.2,43,802.97/- per Mobile Medical

Unit within 15 days from the date of submission of

invoices. There are 227 Mobile Medical Units in total.

Therefore, according to the applicant, an amount of

Rs.6,75,33,431/- was payable to it.

4. It is contended by the applicant that if the monthly

amount payable to the applicant per Mobile Medical Unit

in a month if divisible by 24 service days, respondent No.1

has to pay Rs.10,158/- per Mobile Medical Unit to the

applicant. The said amount was paid regularly till

November, 2016. According to the applicant, respondent

No.1 wrongly calculated the amount payable to it

applicant by including the number of service days as

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service days between December, 2016 and October, 2017

and thus, respondent No.1 reduced the monthly amount

payable to the applicant.

5. It is further contended by the applicant that in the

month of December, the number of service days was

wrongly shown as 25 and reduced the monthly payable

amount to Rs.9,752/- per Mobile Medical Unit in the

months of March, 2017, June, 2017, July, 2017,

September, 2017 and October, 2017. Respondent No.1

wrongly calculated the service days as 26 days and the

amount payable to the applicant was reduced to

Rs.9,337/- per MMU. The applicant addressed several

representations to respondent No.1 regarding the wrongful

calculations and reductions but they neither responded to

the said representations nor resolved the said issues.

Thus, according to the applicant, due to the said wrongful

calculation an amount of Rs.4,39,68,375/- is payable to it

along with interest @18% per annum. Thus, according to

the applicant, total amount to be payable by respondent

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No.1 is Rs.6,33,78,753/-. Applicant also claims penalty as

per the terms of the said agreement. Thus, in all applicant

claims Rs.6,62,78,756/- towards wrongful calculation of

service days, 5% penalty and deduction on account of

biometric and further claims Rs.2,74,11,367/- towards

interest. Thus, it claims an amount of Rs.9,36,89,943/-.

Invoking the arbitration clause, claiming the said amounts

and for appointment of Arbitrator to resolve the disputes,

the Applicant had issued a notice dated 18-02-2020.

There was no reply. Therefore, applicant has sent a

remainder on 04-03-2020, but there was no response from

respondent No.1.

6. Thus, applicant claims that it is entitled for an

amount of Rs.14,19,78,034/- towards non-payment of

invoices for the month of February and March, 2019 and a

separate notice dated 13-04-2020 invoking Arbitration

Clause was addressed to respondent No.1 seeking

appointment of sole Arbitrator to resolve the disputes in

relation to payments of Rs.14,19,78,034/- and

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Rs.9,36,89,943/-. According to the applicant, on

15-05-2020, respondent No.1 had released an amount of

Rs.7,07,24,352/- out of Rs.14,19,78,034/-. Therefore,

applicant is entitled for balance amount of

Rs.7,10,79,829/- and Rs.9,36,89,943/- and it is entitled

for total amount of Rs.16,47,69,772/-. Therefore,

applicant filed the present Arbitration Application seeking

appointment of sole Arbitrator.

7. Respondent No.1 had filed counter and additional

counter. In the counter filed on 27-07-2021 vide USR

No.42677, respondent No.1 agreed about entering of

Service Level Agreement dated 27-02-2016. However,

disputes that there is no such clause mentioned in the

said agreement, which states that the applicant has to

provide 24 days fixed day health services in a calendar

month. There is no express provision or any stipulation in

the agreement claiming 24 days of fixed service days. The

agreement is for a month, which consists of 30 or 31 days

and the applicant has to render service for all those 30/31

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days. The agreement has been made with the applicant to

meet the responsibilities stated in Clause 4 wherein the

applicant agreed to maintain the required number of man

power under any circumstances. Hence, deductions were

made towards non-compliance of biometric attendance is

as per the Clauses and it is justifiable.

8. It is further contended that respondent No.1 has paid

an amount to the applicant in respect of Invoice No.09

dated 28-02-2019 for Rs.6,75,16,556/- and Invoice

No.09A dated 28-02-2019 for Rs.33,81,649/-. The

applicant has accepted the said payment in paragraph

No.8 of the Arbitration Application. Applicant failed to

follow the procedure laid down under Clause 4 of the said

agreement. Therefore, this Arbitration Application is liable

to be dismissed.

9. Respondent No.1 has filed additional counter-

affidavit contending that this Court has no territorial

jurisdiction to entertain the present application. There is

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no cause of action much less part of cause of action within

the territorial jurisdiction of this Court. The place of

execution of work covered by the agreement is exclusively

in State of Andhra Pradesh, issuance of notices by the

applicant on 18-02-2020 and 13-04-2020 for appointment

of Arbitrator was addressed to respondent No.1, which is

located at Vijayawada. Meetings were held on 28-01-2019

and thereafter on several occasions between the parties at

the Secretariat at Vijayawada in the State of Andhra

Pradesh. Thus, this Court has no territorial jurisdiction to

try, entertain and determine the present Arbitration

Application.

10. It is further contended that mere mention of "the

venue of the arbitration shall be the place from where the

agreement has been issued" in Clause 14(3) of the

agreement does not confer any jurisdiction of this Court to

try, entertain and determine the instant application. It is

well settled in law that venue cannot be equated with the

seat of arbitration since both have a different connotation

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and that the "seat of arbitration" and "venue of

arbitration" cannot be used interchangeably.

11. Sri P. Govind Reddy, learned Government Pleader

appearing for respondent No.1 has placed reliance on the

principle laid down by the Hon'ble Apex Court in M/s.Ravi

Ranjan Developers Pvt. Limited v. Aditya Kumar

Chatterjee 1 and order dated 07-01-2022 in

W.P.(SR)No.42360 of 2021 of this Court in Mr.Bandi

Srinivas Raghuveer and 2 others v. The State of

Andhra Pradesh.

12. Applicant has filed reply to the said counter

contending that the disputes raised by the applicant with

regard to payment etc., are to be adjudicated and resolved

by the Arbitrator. The Service Level Agreement dated

27-02-2016 was executed at Hyderabad. The non-judicial

stamp papers for the Service Level Agreement were

purchased by respondent No.1 from Stamp Vendor at

2022 Live Law (SC) 329

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Hyderabad. At the time of execution of said agreement

respondent No.1 had its office at Sulthan Bazar, Koti,

Hyderabad. The Tender was floated by respondent No.1

from Hyderabad. The bid was submitted by the applicant

to respondent No.1 in Hyderabad. Respondent No.1

evaluated all the bid documents from out of its office in

Hyderabad. Respondent No.1 declared the applicant as the

successful bidder in Hyderabad and awarded the Tender

to the applicant in Hyderabad. Therefore, referring to

Clause Nos.13 and 14 of the said agreement, applicant

would contend that this Court has territorial jurisdiction

to entertain the present Arbitration Application.

13. FINDINGS OF THE COURT:

The aforesaid rival submissions would reveal that the

applicant and respondent No.1 have entered into Service

Level Agreement dated 27-02-2016 on the specific terms

and conditions agreed thereon to provide service of

operation and maintenance of Mobile Medical Units

attached to 104 for a period of three (3) years from

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01-04-2016 to 31-03-2019. The said agreement was

entered between applicant and respondent No.1. At that

time, the office of respondent No.1 was at Sulthan Bazar,

Koti, Hyderabad.

14. Clause Nos.13 and 14 of the said agreement deals

with the 'disputes' and 'arbitration' and the same are

relevant and are extracted below:

13. DISPUTES:

1. The agreement shall be governed by and interpreted in accordance with the laws of India for the time being in force. The Court located at the place of issue of agreement shall have jurisdiction to decide any dispute arising out of in respect of the agreement. It is specifically agreed that no other Court shall have jurisdiction in the matter.

2. Both parties agree to make their best efforts to resolve any dispute between them by mutual consultations.

14. ARBITRATION

1. If the parties fail to resolve their dispute or difference by such mutual consultations within thirty days of commencement of consultations, then either the Service procuring agency or the Service provider

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may give notice to the other party of its intention to commence arbitration, as hereinafter provided. The applicable arbitration procedure will be as per the Arbitration and Conciliation Act 1996 of India. In that event, the dispute or difference shall be referred to the sole arbitration of an officer as the arbitrator to be appointed by the CHFW, A.P. If the arbitrator to whom the matter is initially referred is transferred or vacates his office or is unable to act for any reason, he/she shall be replaced by another person appointed by CHFW GOVERNMENT OF Andhra Pradesh to act as Arbitrator.

2. Work under agreement shall, notwithstanding the existence of any such dispute or difference, continue during arbitration proceedings and no payment due or payable by the CHFW AP or the firm/contractor shall be withheld on account of such proceedings unless such payments are the direct subject of the arbitration.

3. Reference to arbitration shall be a condition precedent to any other action at law. 14.4 Venue of Arbitration: The venue of arbitration shall be the place from where the agreement has been issued.

15. According to the applicant, there are disputes

between the applicant and respondent No.1 with regard to

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providing services by the applicant for operation and

maintenance of Mobile Medical Unit attached to 104 and

payments. On 15-05-2020, respondent No.1 had released

an amount of Rs.7,07,24,352/- out of Rs.14,19,78,034/-.

Therefore, applicant is entitled for balance amount of

Rs.7,10,79,829/- and Rs.9,36,89,943/- and in all it is

entitled for a total amount of Rs.16,47,69,772/-.

16. According to respondent No.1, it has paid the entire

amount including the amounts mentioned in the aforesaid

two invoices i.e., Invoice No.09 dated 28-02-2019 for

Rs.6,75,16,556/- and Invoice No.09A dated 28-02-2019

for Rs.33,81,649/-. The applicant has accepted the said

payment in paragraph No.8 of the Arbitration Application.

17. Thus, even according to respondent No.1, there are

disputes between applicant and respondent No.1 with

regard to period, providing services, payments, penalty,

deductions and days fixed for providing services in a

Calendar month. The said aspects can be considered by

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an Arbitrator to be appointed by this Court and the

applicant and respondent No.1 have to raise all their

contentions before the said Arbitrator. Thus, according to

this Court, there are disputes between the applicant and

respondent No.1, which are arbitrable disputes. Therefore,

the contention of learned counsel appearing for

respondent No.1 that there are no arbitrable disputes

between the applicant and respondent No.1, cannot be

accepted.

18. With regard to other contentions raised by

Sri P. Govind Reddy, learned Government Pleader

appearing for respondent No.1 that this Court has no

territorial jurisdiction to try, entertain and determine the

instant application, it is relevant to note that the subject

Tender was floated by respondent No.1 from Hyderabad.

The bid was submitted by the applicant to respondent

No.1 in Hyderabad. Respondent No.1 has evaluated all the

bid documents from out of its office in Hyderabad.

Respondent No.1 declared the applicant as the successful

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bidder in Hyderabad and awarded the Tender to the

applicant in Hyderabad. It is also relevant to note that the

subject Service Level Agreement was entered between the

applicant and respondent No.1 on 27-02-2016 at

Hyderabad. As rightly contended by learned counsel

appearing for the applicant, respondent No.1 has

purchased non-judicial stamp papers at Hyderabad. At

the time of execution of said agreement, respondent No.1

had its office in Sulthan Bazar, Koti, Hyderabad.

Therefore, there is cause of action in Hyderabad.

19. It appears thereafter the office of respondent No.1

was shifted to Gollapudi, Vijayawada and the operation

and maintenance of 108 and 104 services were migrated

from office of the Director of Health and Family Welfare,

Andhra Pradesh, Vijayawada to the office of the Chief

Executive Officer, Dr.YSR Aarogyasri Halth Care Trust,

Guntur i.e., respondent No.2 herein vide G.O.RT.No.566

dated 30-10-2019.

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20. Sri P. Govind Reddy, learned Government Pleader

appearing for respondent No.1 would further contend that

just because the subject Service Level Agreement was

signed on 27-02-2016 it cannot be treated that this Court

has territorial jurisdiction to entertain the present

application. The applicant has executed the Service Level

Agreement dated 27-02-2016 in Andhra Pradesh. It has

provided services pursuant to the said agreement in

Andhra Pradesh. The department was permanently shifted

to Gollapudi, Vijayawada, Andhra Pradesh on 16-10-2017

after division of States. The office of respondent No.1 was

located at Sulthan Bazar, Koti, Hyderabad temporarily. It

was permanently shifted to Vijayawada on 16-10-2017.

Therefore, this Court has no territorial jurisdiction to

entertain the present application. He has also placed

reliance on the principles laid down by the Hon'ble Apex

Court in M/s.Ravi Ranjan Developers Pvt. Limited v.

Aditya Kumar Chatterjee and order dated 07-01-2022 in

W.P.(SR)No.42360 of 2021 of this Court.

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21. As discussed supra, entire process i.e., from floating

of tender to entering of service level agreement was at

Hyderabad. At the time of execution of said agreement,

respondent No.1 had its office is at Sulthan Bazar, Koti,

Hyderabad. Thus, the entire tender process right from the

floating of tender to awarding of work to the applicant was

in Hyderabad. Therefore, the contention of learned

Government Pleader appearing for the 1st respondent that

there is no part of cause of action within the territorial

jurisdiction of this Court and this Court lacks territorial

jurisdiction to try, entertain and determine the present

application, cannot be accepted.

22. As discussed supra, Clause No.13 of the said

agreement deals with 'Disputes' and Clause No.14 deals

with 'Arbitration'. Thus, Clause No.13(i) of the agreement

contemplates that the Court located at the place of issue

of agreement shall have the jurisdiction to decide any

dispute arising out of in respect of the agreement and that

no other Court shall have jurisdiction.

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23. It is also relevant to note that in M/s.Ravi Ranjan

Developers Pvt. Limited's case cited supra, the facts are

as follows:

1. The Section 11 Application seeking appointment of an arbitrator was filed before the Calcutta High Court and the Arbitrator was appointed by the Calcutta High Court. A review petition was filed before the Calcutta High Court, which was dismissed.

2. The property which was the subject matter of the Development Agreement was situated in Muzaffarpur, Bihar

3. The Development Agreement was executed and registered in Muzaffarpur, Bihar

4. Complaint was filed with the Real Estate Regulatory Authority at Patna, Bihar citing certain violations in the building

5. Complaint was filed with Muzaffarpur Municipal Corporation citing certain violations in construction of the building, which was dismissed. An appeal was filed before the Bihar Municipal Tribunal.

6. Petition under Section 9 of the Arbitration and Conciliation Act, 1996 was filed before the District Court at Muzaffarpur, Bihar.

7. The arbitration clause in the Development Agreement contemplated that the 'sitting of the said Arbitral Tribunal shall be at Kolkata'.

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On consideration of the facts and arbitration Clause, the

Hon'ble Apex Court in paragraph Nos.20, 25 and 48 held

as follows:

"20. The question in this case is, whether the Calcutta High Court had territorial jurisdiction to pass the impugned orders. The answer to the question has to be in the negative for the reason that the Development Agreement was admittedly executed and registered outside the jurisdiction of the High Court of Calcutta, the agreement pertains to development of property located in Muzaffarpur outside jurisdiction of the Calcutta High Court. The Appellant has its registered office in Patna outside the jurisdiction of Calcutta High Court. The Appellant has no establishment and does not carry on any business within the jurisdiction of the Calcutta High Court. As admitted by the Respondent, no part of the cause of action had arisen within the jurisdiction of Calcutta High Court.

25. In the present case, no suit could have been filed in any Court over which the Calcutta High Court exercises jurisdiction, since as stated above, the suit admittedly pertains to immovable property situated at Muzaffarpur in Bihar, outside the territorial

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jurisdiction of the Calcutta High Court and admittedly, no part of the cause of action had arisen within the territorial jurisdiction of the Calcutta High Court. The Appellant who would be in the position of Defendant in a suit, neither resides nor carries on any business within the jurisdiction of the Calcutta High Court.

48. In this case, the parties, as observed above did not agree to refer their disputes to the jurisdiction of the Courts in Kolkata. It was not the intention of the parties that Kolkata should be the seat of arbitration. Kolkata was only intended to be the venue for arbitration sittings. Accordingly, the Respondent himself approached the District Court at Muzaffarpur, and not a Court in Kolkata for interim protection under Section 9 of the A&C Act. The Respondent having himself invoked the jurisdiction of the District Court at Muzaffarpur, is estopped from contending that the parties had agreed to confer exclusive jurisdiction to the Calcutta High Court to the exclusion of other Courts. Neither of the parties to the agreement construed the arbitration clause to designate Kolkata as the seat of arbitration. We are constrained to hold that Calcutta High Court inherently lacks jurisdiction to entertain the application of the Respondent under Section 11(6) of

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the Arbitration Act. The High Court should have decided the objection raised by the Appellant, to the jurisdiction of the Calcutta High Court, to entertain the application under Section 11(6) of A&C Act, before appointing an Arbitrator."

24. Thus, the Hon'ble Apex Court on examination of facts

therein specifically stated with regard to the cause of

action for the purpose of coming to a conclusion as to

whether Calcutta High Court has jurisdiction under

Section 11 (6) of the Act. The Hon'ble Apex Court further

held that no part of cause of action has arisen in Calcutta.

But the facts of the present case are different. There is

part of cause of action within the territorial jurisdiction of

this Court.

25. As discussed supra, at the cost of repetition entire

process i.e., floating of tenders, awarding of contract and

entering into agreement are at Hyderabad. Therefore, the

contention of respondent No.1 that this Court has no

territorial jurisdiction to try the present application is not

sustainable.

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26. In BBR (India) (P) Ltd., v. S.P. Singla

Constructions (P) Ltd. 2, the Hon'ble Apex Court held as

follows:

"17. In BGS SGS Soma (supra), this Court observed that any other construction of the provisions would render Section 20 of the Act nugatory. In view of the Court, the legislature had given jurisdiction to two courts: the court which should have jurisdiction where the cause of action is located; and the court where the arbitration takes place. This is necessary as, on some occasions, the agreement may provide the 'seat of arbitration' that would be neutral to both the parties. The courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. The 'seat of arbitration' need not be the place where any cause of action has arisen, in the sense that the 'seat of arbitration may be different from the place where obligations are/had to be performed under the contract. In such circumstances, both the courts should have jurisdiction, viz., the courts within whose jurisdiction 'the subject matter of the suit' is situated and the courts within whose jurisdiction the dispute resolution forum, that is, where the arbitral tribunal is located.

(2023) 1 SCC 693

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18. Turning to Section 20 of the Act, sub-section (1) in clear terms states that the parties can agree on the place of arbitration. The word 'free' has been used to emphasise the autonomy and flexibility that the parties enjoy to agree on a place of arbitration which is unrestricted and need not be confined to the place where the 'subject matter of the suit' is situated. Sub-

section (1) to Section 20 gives primacy to the agreement of the parties by which they are entitled to fix and specify 'the seat of arbitration', which then, by operation of law, determines the jurisdictional court that will, in the said case, exercise territorial jurisdiction. Sub-section (2) comes into the picture only when the parties have not agreed on the place of arbitration as 'the seat'.11 In terms of sub-section (2) of Section 20 the arbitral tribunal determines the place of arbitration. The arbitral tribunal, while doing so, can take into regard the circumstances of the case, including the convenience of the parties. Sub-section (3) of Section 20 of the Act enables the arbitral tribunal, unless the parties have agreed to the contrary, to meet at any place to conduct hearing at a place of convenience in matters, such as consultation among its members, for the recording of witnesses, experts or hearing parties, inspection of documents, goods, or property.

23. It may, however, be noted that clause (e) to sub- section (1) of Section 2 was amended by inserting sub-

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clause (ii)15 with the specific objective to solve the problem of conflict of jurisdiction that would arise in cases where interim measures are sought in India in cases of arbitration seated outside India. In the context of domestic arbitrations it must be held that once the 'seat of arbitration' has been fixed, then the courts at the said location alone will have exclusive jurisdiction to exercise the supervisory powers over the arbitration. The courts at other locations would not have jurisdiction, including the courts where cause of action has arisen. As observed above and held in BGS SGS Soma (supra), and Indus Mobile (supra),16 the moment the parties by agreement designate 'the seat', it becomes akin to an exclusive jurisdiction clause. It would then vest the courts at 'the seat' with exclusive jurisdiction to regulate arbitration proceedings arising out of the agreement between the parties.

25. Accordingly, in BGS SGS Soma (supra), the law as applicable, where the parties by agreement have not fixed the jurisdictional 'seat', is crystallised as under:

82. On a conspectus of the aforesaid judgments, it may be concluded that whenever there is the designation of a place of arbitration in an arbitration clause as being the "venue" of the arbitration proceedings, the expression "arbitration proceedings" would make it clear that the "venue" is really the "seat" of the arbitral proceedings, as the aforesaid expression does not

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include just one or more individual or particular hearing, but the arbitration proceedings as a whole, including the making of an award at that place. This language has to be contrasted with language such as "tribunals are to meet or have witnesses, experts or the parties" where only hearings are to take place in the "venue", which may lead to the conclusion, other things being equal, that the venue so stated is not the "seat"

of arbitral proceedings, but only a convenient place of meeting. Further, the fact that the arbitral proceedings "shall be held" at a particular venue would also indicate that the parties intended to anchor arbitral proceedings to a particular place, signifying thereby, that that place is the seat of the arbitral proceedings. This, coupled with there being no other significant contrary indicia that the stated venue is merely a "venue" and not the "seat" of the arbitral proceedings, would then conclusively show that such a clause designates a "seat" of the arbitral proceedings. In an international context, if a supranational body of rules is to govern the arbitration, this would further be an indicia that "the venue", so stated, would be the seat of the arbitral proceedings. In a national context, this would be replaced by the Arbitration Act, 1996 as applying to the "stated venue", which then becomes the "seat" for the purposes of arbitration."

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27. In view of the above, this Court is of the considered

view that this Court has jurisdiction to entertain the

present application. Thus, the Hon'ble Apex Court held

that the 'seat of arbitration' need not be the place where

any cause of action has arisen, in the sense that the 'seat

of arbitration may be different from the place where

obligations are/had to be performed under the contract. In

such circumstances, both the courts should have

jurisdiction, viz., the courts within whose jurisdiction 'the

subject matter of the suit' is situated and the courts

within whose jurisdiction the dispute resolution forum,

that is, where the arbitral tribunal is located.

28. As discussed supra, in the present case vide subject

Service Level Agreement both the applicant and

respondent No.1 have specifically agreed the execution of

same at Hyderabad. Therefore, this Court has jurisdiction

to try the present application.

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29. Respondent No.1 also placed reliance of order dated

07-01-2022 of this Court in Mr.Bandi Srinivas

Raghuveer and 2 others v. The State of Andhra

Pradesh. In the said case, there is no part of cause of

action within territorial jurisdiction of this Court except

issuance of appointment orders from the registered office.

Therefore, the facts of the said case are altogether different

to the facts of the present case.

30. With regard to other contentions of respondent No.1

that applicant has not followed the procedure laid down in

Clause 14 of the Arbitration Clause, it is relevant to note

that applicant has issued notice dated 18-02-2020

invoking the arbitration clause with a request to settle the

disputes as contemplated under Clause 13(2) of the

agreement. There is no response from respondent No.1.

Thereafter applicant has issued another reminder notice

dated 04-03-2020. Despite receiving and acknowledging

the said notices, there is no response from respondent

No.1. Even in the additional counter filed by respondent

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No.1, it is stated that applicant has issued notices on

18-02-2020 and 13-04-2020 for appointment of Arbitrator

and the same were addressed to respondent No.1 located

at Vijayawada. Meeting was held on 28-01-2019.

31. In the light of the same, respondent No.1 cannot

claim that the applicant has not followed the procedure

laid down under Clause Nos.13 and 14 of the said

agreement. The said contentions of respondent No.1

cannot be accepted.

32. As discussed supra, there are disputes between the

applicant and respondent No.1, which are arbitral

disputes. It is relevant to note that the Supreme Court in

Vidya Drolia v. Durga Trading Corporation 3 laid down

the test to exercise power under Section 11 of the Act,

1996. In his separate opinion, the then Hon'ble Chief

Justice of India, held as follows:

244. Before we part, the conclusions reached, with respect to Question 1, are:

(2021) 2 SCC 1.

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244.1. Sections 8 and 11 of the Act have the same ambit with respect to judicial interference. 244.2. Usually, subject-matter arbitrability cannot be decided at the stage of Section 8 or 11 of the Act, unless it is a clear case of deadwood.

244.3. The court, under Sections 8 and 11, has to refer a matter to arbitration or to appoint an arbitrator, as the case may be, unless a party has established a prima facie (summary findings) case of non-existence of valid arbitration agreement, by summarily portraying a strong case that he is entitled to such a finding. 244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e. "when in doubt, do refer".

244.5. The scope of the court to examine the prima facie validity of an arbitration agreement includes only:

244.5.1. Whether the arbitration agreement was in writing? or 244.5.2. Whether the arbitration agreement was contained in exchange of letters, telecommunication, etc.?