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All grounds in respect of existence and validity of the arbitration clause can be raised by the petitioner before the Arbitral Tribunal: Delhi High Court

The intent of the Arbitration and Conciliation Act, 1996 is that existence and validity of the arbitration agreement can be raised by a party before the Arbitral Tribunal and therefore, finality has been given to the orders passed by the court allowing application under Section 8 of the Act as upheld by the High Court of Delhi through the learned bench led by Hon’ble Mr. Justice Amit Bansal in the case of Arun Srivastava v. M/S Larsen & Toubro Ltd. (CM(M) 1520/2018)

The brief facts of the present petition are that on 20th October, 2019, a Letter of Intent was issued by the respondent to the petitioner for supply, installation and commissioning of electric works at the District Hospital Project at Gurgaon, Bhiwani and Hissar in Haryana. Letter of Intent was duly executed and signed between the parties at New Delhi. It was the contention of the petitioner that the respondent wrongly withheld an amount of Rs.12,24,181/- in respect of bills raised by the petitioner on the respondent which led to filing of a recovery suit for an amount of Rs.17,26,000/- before the court of ADJ on 22nd September, 2017. In the said suit, an application under Section 8 of the Act was filed on behalf of the respondent seeking that the parties may be referred to arbitration in terms of the arbitration clause contained in the Letter of Intent. On 22nd December, 2017, an application under Order 12 Rule 6 of the Code of Civil Procedure, (CPC), 1908, was filed on behalf of the petitioner seeking decree on the basis of admissions made by the respondent. The application filed on behalf of the respondent under Section 8 of the Act was allowed by the impugned order. In view of the Section 8 application filed by the respondent being allowed, the application filed by the petitioner under Order 12 Rule 6 of CPC was dismissed as being infructuous.

After the perusal of the facts and arguments, the Hon’ble Court held, “The present petition under Article 227 of the Constitution of India against the impugned order allowing the Section 8 application would not be maintainable. All grounds in respect of existence and validity of the arbitration clause can be raised by the petitioner before the Arbitral Tribunal. Even on the merits of the case, no grounds have been made for interference with the impugned order. The only case put by the petitioner is that in light of the admission made by the respondent, there is no arbitrable dispute to be referred for arbitration. No merit is found in the petition. Dismissed.”

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Judgment reviewed by Vandana Ragwani

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