ALVA ALUMINIUM LTD. BANGKOK versus GABRIEL INDIA LIMITED

Citation: [2010] 13 S.C.R. 803 · Decided: 16-11-2010 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Case Allowed

Judgment (excerpt)

[2010] 13 (ADDL.) S.C.R. 803 
ALVA ALUMINIUM LTD. BANGKOK 
v. 
GABRIEL INDIA LIMITED 
(Arbitration Petition No. 2 of 2010) 
NOVEMBER 16, 2010 
[T.S. THAKUR, J.] 
ARBITRATION AND CONCILIATION ACT, 1996: 
A 
B 
ss 11 (9), (5) and 16 - Appointment of arbitrator - Issue c 
as regards existence of arbitration agreement in the contract 
between the parties - Held: Once existence of arbitration 
agreement itself is questioned, the same will have to be 
decided by the Chief Justice or his designate, as the case 
may be - The power available to arbitral tribunal uls 16 does 
D 
not imply that the issue can be or ought to be left to be 
determined by it, even if in the application u/s 11, there is a 
dispute between the parties as regards existence of arbitration 
agreement between them - In the instant case, there is a 
written contract document between the parties containing an 
E 
arbitration clause - Accordingly, arbitrator appointed -
Contract Act, 1872. 
CONTRACT ACT, 1872: 
Contract - Signing of - Plea of the company that its officer 
F 
had only negotiated the contract on its behalf and was not 
competent to sign the contract and that he was misguided/ 
enticed by the opponent - Held: Cannot be accepted-
Documents, information and correspondence, when taken in 
their totality, especially in the light of the signed contract 
G 
document that stipulates the mutual rights and obligations of 
the parties, do not show that they were simply negotiating a 
contract but are, on the contrary, clearly suggestive of the 
parties having finalised and signed a contract - Besides, 
803 
H 
804 
SUPREME COURT REPORTS [2010] 13 (ADDL.) S.C.R. 
A there is nothing on record to establish that the signatures 
appended by the officer concerned to the contract document 
in token of its acceptance were vitiated by any 
misrepresentation etc.-Arbitration and Conciliation Act, 
1996. 
B 
c 
The petitioner, a joint venture company incorporated 
under the provisions of the laws of Thailand, filed the 
instant application under sub sections (5) and (9) of s. 11 
of the Arbitration and Conciliation Act, 1996 stating that 
on 30. 7 .2008 it entered into a contract with the · 
respondent, a company incorporated under the 
provisions of the Companies Act, 1956, for sale by the 
petitioner and purchase by the respondent of 150 mts of 
"Aluminium Alloy Ingots AC28" on the terms and 
conditions stipulated in the said contract, but the 
D respondent did not open the requisite letter of credit. The 
stand of the respondent was that the contract document 
relied upon by the petitioner was not signed on its behalf 
by an authorised person and, therefore, the same was not 
binding or enforceable against it; that the person who 
E signed the said document, namely, 'SKD", was 
authorised only to negotiate the terms of purchase and 
not to sign a contract; that the signatures of 'SKD' were 
obtained by misguiding/ enticing and misdirecting him; 
and that no arbitration agreement existed between the 
F parties that could provide the basis for making a 
reference. 
The questions for consideration before the Court 
were: (1) whether the Court, in a petition u/ss 11 (5) and 
G 11 (9) of the Arbitration and Conciliation Act, 1996, was 
required to determine the existence of an arbitration 
agreement between the parties? and (2) whether any 
such agreement was executed between the parties to call 
for the appointment of an arbitrator for adjudication of the 
disputes and differences that arose between them? 
H 
ALVA ALUMINIUM LTD. BANGKOK v. GABRIEL INDIA 805 
LIMITED 
Allowing the petition, the Court 
HELD: 
A 
1.1 Once the existence of the arbitration agreement 
itself is questioned by any party to the proceedings 
initiated uls 11 of the Arbitration and Conciliation Act, 
B 
1996, the same will have to be decided by the Chief 
Justice or his designate, as the case may be. That is 
because existence of an arbitration agreement is a 
jurisdictional fact which will have to be addressed while 
making an order on a petition uls 11 of the Act. [Para 17] 
C 
[815-D-F] 
National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. 
2008 (13) SCR 638 = 2009 (1) SCC 267; A.P. Tourism. 
Development Corpn. Ltd. v. Pampa Hotels Ltd. 2005 (4) 
D 
Suppl. SCR 688 = 2010 (5) SCC 425; SBP & Co. v. Patel 
Engg. Ltd. 2005 (8) SCC 618- relied on. 
1.2 The power available to the arbitral tribunal uls 16 
of the Act does not imply that the issue can be or ought 
to be left to be determined by

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