ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED AND ANOTHER versus LAFARGE INDIA PRIVATE LIMITED

Citation: [2013] 17 S.C.R. 496 · Decided: 12-12-2013 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Case Partly allowed

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

(2013] 17 S.C.R. 496 
A 
ARASMETA CAPTIVE POWER COMPANY PRIVATE 
LIMITED AND ANOTHER 
v. 
LAFARGE INDIA PRIVATE LIMITED 
(Civil Appeal No.11003 of 2013) 
B 
DECEMBER 12, 2013 
[ANIL R. DAVE AND DIPAK MISRA, JJ.] 
Arbitration and Conciliation Act, 1996- ss.11 (5) and (6) 
C - Dispute falling in the realm of "excepted" matter - Role of 
Designated Judge, while dealing with an application u/ss.11(5) 
and (6) - Held: On facts, the Designated Judge while dealing 
with an application uls.11(6), on an issue raised with regard 
to the excepted matters, was not justified in addressing the 
D same on merits whether it was a dispute relating to excepted 
matters under the agreement in question or not -
The 
Designated Judge fell into error by opining that the disputes 
raised were not "billing disputes", for the same should have 
been left to be adjudicated by the Arbitrator - Part of the 
E impugned order reflecting expression of opinion by the 
Designated Judge on the merits of the disputes, being 
pregnable, set aside. 
Precedent - Ratio decidendi - Held: The ratio of any 
decision must be understood in the background of the facts 
F of that case - Ratio decidendi of a judgment is not to be 
discerned from a stray word or phrase read in isolation - The 
case is only an authority for what it actually decides, and not 
what logically follows from it - Further, the judgments 
rendered by a court are not to be read as statutes. 
G 
The Judge designated by the Chief Justice of the 
High Court, while dealing with an application preferred 
under Section 11 (5) and (6) of the Arbitration and 
Conciliation Act, 1996, repelled the submission of the 
H 
496 
ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 497 
v. LAFARGE INDIA PRIVATE LIMITED 
appellant that the disputes in question, being excepted 
A 
matters, were squarely covered within the ambit of clause 
9.3 of the agreement between the parties and hence, it 
was only to be referred to an expert for resolution and not 
to an arbitrator and, further addressing the issue on 
merits, opined that as the disputes were not covered 
B 
under the subject-matter of billing disputesin clause 9.3 
of the agreement, the parties were not under obligation 
to refer the matter to the expert, and, accordingly, called 
for the names from both the parties and taking note of the 
inability expressed by the appellant, appointed an c 
arbitrator to adjudicate the disputes between the parties. 
In the instant appeal, the appellants, criticizing the 
view expressed by the designated Judge, submitted that 
the dispute raised by the respondent being a "billing 
dispute", which was an excepted matter, it was obligatory 
D 
on the contracting parties to resolve the dispute through 
an expert cemmittee by the mechanism provided in the 
agreement itself and the same could not have been 
referred to an arbitrator to be arbitrated upon. It was 
submitted that once a dispute falls in the realm of an 
E 
excepted matter, as stipulated in the agreement, it is a 
non-arbitrable claim and hence, the court alone has the 
jurisdiction to decide the issue of arbitrability and it 
cannot be left to be adjudicated by an arbitrator and as 
in the present case the Judge erroneously decided that 
F 
it was not a "billing dispute" and thereby not an excepted 
matter, the same warranted interference. 
Partly allowing the appeal, the Court 
HELD: 1. Regard being had to the anatomy of the 
G 
Arbitration and Conciliation Act, 1996 and the contours of 
its provisions, namely, Sections 8, 9, 11 and 16, a Bench 
of seven Judges in SBP & Co. by majority has stated about 
the functions to be performed by the Chief Justice or his 
H 
498 
SUPREME COURT REPORTS [2013) 17 S.C.R. 
A designate to do. Or, to put it differently, what'are required 
to be determined by the Chief Justice or his designate, 
have been exposited in paragraph 39 of the said judgment. 
In paragraph 47, the majority has summed up the 
conclusions in seriatim. On a careful reading of the 
B paragraph 39 and conclusion No. (iv), as set out in 
paragraph 47, of the said case, it is limpid that for the 
purpose of setting into motion the arbitral procedure the 
Chief Justice or his designate is required to decide the 
issues, namely, (i) territorial jurisdiction, (ii) existence of an 
c arbitration agreement between the parties, (iii) existence 
or otherwise of a live claim, and (iv) existence of the 
conditions for exercise of power and further satisfaction 
as regard

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