DLF HOME DEVELOPERS LIMITED versus RAJAPURA HOMES PRIVATE LIMITED & ANR.

Citation: [2021] 12 S.C.R. 1 · Decided: 22-09-2021 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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DLF HOME DEVELOPERS LIMITED
v.
RAJAPURA HOMES PRIVATE LIMITED & ANR.
(Arbitration Petition (Civil) No. 17 of 2020)
SEPTEMBER 22, 2021
[N.V. RAMANA, CJI AND SURYA KANT, J.]
Arbitration and Conciliation Act, 1996 – s.11(6) r/w s.11(12)
– Appointment of Arbitrator – In terms of Share Purchase
Agreements, the parties entered into Construction Management
Agreements – Both sets of agreements contained arbitration clauses
not similar to one another – Disputes arose – Respondents refused
to appoint Arbitrator under the Construction Management
Agreements – Present petitions filed by the Petitioner for appointment
of a sole arbitrator for resolution of all disputes arising from the
Construction Management Agreements – Held: Notwithstanding
certain overlaps between the Share Purchase Agreements and
Construction Management Agreements, their object and field of
operation is different and distinct – It cannot be accepted outrightly
that the respective Share Purchase Agreements are the ‘principal
agreements governing the transaction’ between the parties or that
the present disputes can be resolved solely under the arbitration
clause contained therein – Neither party pleaded the infringement
of the core provisions of the said Agreements, thus it cannot be
accepted that the subject controversy falls within the ambit of Clause
9 thereof and can be adjudicated only under the rules of Singapore
International Arbitration Centre (SIAC), with seat and venue at
Singapore – Further, parties have neither denied that there is no
arbitrable dispute between them nor have they challenged the
existence of the arbitration clause(s) in the Construction
Management Service Agreements – The nature of disputes that have
arisen between the parties can thus, be adjudicated in the arbitral
proceedings u/Clause 11 of the Construction Management
Agreements – Primary twin-test u/s.11(6) satisfied by the Petitioner
– Sole arbitrator appointed to resolve all disputes between the
parties.
[2021] 12 S.C.R. 1
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SUPREME COURT REPORTS
[2021] 12 S.C.R.
Arbitration and Conciliation Act, 1996 – ss.11, 11(6-A) –
Scope of interference by Court at the stage of referral – Held: Courts
are obliged to apply their mind to the core preliminary issues within
the framework of s.11(6-A) – Thus, even when an arbitration
agreement exists, it would not prevent the Court to decline a prayer
for reference if the dispute does not correlate to the said agreement
– Arbitration and Conciliation (Amendment) Act, 2015 – Arbitration
and Conciliation (Amendment) Act, 2019 – s.11(6-A).
Allowing the petitions, the Court
HELD 1. The jurisdiction of this Court under Section 11 is
primarily to find out whether there exists a written agreement
between the parties for resolution of disputes through arbitration
and whether the aggrieved party has made out a prima facie
arbitrable case. The limited jurisdiction, however, does not
denude this Court of its judicial function to look beyond the bare
existence of an arbitration clause to cut the deadwood. This Court
or a High Court, as the case may be, are not expected to act
mechanically merely to deliver a purported dispute raised by an
applicant at the doors of the chosen Arbitrator. On the contrary,
the Court(s) are obliged to apply their mind to the core preliminary
issues, albeit, within the framework of Section 11(6-A) of the Act.
Such a review is not intended to usurp the jurisdiction of the
Arbitral Tribunal but is aimed at streamlining the process of
arbitration. Therefore, even when an arbitration agreement exists,
it would not prevent the Court to decline a prayer for reference if
the dispute in question does not correlate to the said agreement.
[Paras 18, 19][14-B-C; 16-A-C]
2.1 In terms of Clauses 3.1, 6.1 and 6.2 of Share Purchase
Agreements, the parties entered into two Construction
Management Service Agreements dated 25.01.2017. The ‘Share
Purchase Agreements’ as well as the ‘Construction Management
Agreements’ are subsisting and have not been repudiated by the
Parties. Both sets of agreements contain arbitration clauses that
are not similar to one another. Upon perusing the Share Purchase
Agreements, it is clear that the primary purpose of these
agreements is to effectuate the change of ownership of
Respondent No.1 and the Begur Company from DHDL to
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Resimmo PCC. The Rajapura SPA and the Southern Homes SPA
as per their Clause 6.1 and 6.2, do provide for the completion of
the respective 

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