LexVISA INTERNATIONAL LTD. versus CONTINENTAL RESOURCES (USA) LTD.
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[2008] 16 S.C.R. 1043 VISA INTERNATIONAL LTD. A 1 v. CONTINENTAL RESOURCES (USA) LTD. (Arbitration Petition No.16 of 2007) DECEMBER 2, 2008 B [B. SUDERSHAN REDDY, J.] ...... ~ Arbitration and Conciliation Act, 1996: Ss.2(1 )(f), 7, 11 (5), (6) and (9) - 'International commercial c arbitration' - Arbitration clause in agreement - Existence of. live claim - Held: s. 7 does not prescribe any particular form of arbitration agreement- In the instant case, relevant clause in the agreement indicates clear intention of parties to refer the dispute to arbitration - There is a dispute and live issue between the parties -Claim is not barred by limitation - A clear D case is made out for appointment of arbitrator to decide the . ~ dispute between the parties - Arbitrator appointed. .. A Memo of Understanding dated 14.2.1005 was executed by and between the applicant and the E respondent to incorporate a company for the purpose of setting up an integrated Aluminium Complex. The said MoU was followed by ~n agreement dated 15.2.2005 executed between the parties, Clause VI whereof stated: "Any dispute arising out of this agreement and which F / -i cannot be settled amicably shall be finally settled in accordance with the Arbitration and Conciliation Act, 1996." Disputes having arisen between the parties, the applicant invoked the arbitration clause duly informing the respondent. The respondent by letter dated 3.4.2007 G rejected the names suggested by the applicant to be appointed as arbitrator for the reasons that (a) the arbitration would not be cost effective and (b) the arbitration was pre-mature. Therefore, the applicant filed 1043 H 1044 SUPREME COURT REPORTS [2008] 16 S.C.R. A the application. ,._ The questions for consideration before the Court were: "Whether there exists a valid arbitration agreement ~ between the parties?" and "Whether there exists a live B claim between the parties?" Allowing the application, the Court j HELD: 1. It is now well settled that the power 'r 1-o• exercised by the Chief Justice of India or the designated c Judge under s.11 (6) of the Arbitration and Conciliation Act, 1996 is not an administrative power. It is a judicial power. The Chief Justice or the designated Judge, as the case may be, is bound to decide whether he has jurisdiction to entertain the request, in the sense, whether D there is a valid arbitration agreement .in terms of s. 7 of the Act and whether the person before him with a request is a party to the arbitration agreement or whether there was no dispute subsisting which was capable of being '!' arbitrated upon. [Para 10] [1051-E-H; 1052-A] .. E SBP & Co. vs. Patel Engineering Ltd. & Anr. (2005) 8 sec 618, relied on. 2.1. Section 7 of the Act does not µrescribe any particular form and it is immaterial whether or not F expression 'arbitration' or 'arbitrator' or 'arbitrators' has been used in the agreement. That an arbitration agreement is not required to be in any particular form has ,.__ ' been reiterated in more than one decisions. What is required to be decided in an application u/s 11 of the Act G is whether there is any arbitration agreement as defined in the Act. What is required to be gathered is the intention of the parties from the surrounding circumstances including the conduct of the parties and the evidence 1-- such as exchange of correspondence between them. But, one cannot take into consideration the terms of any H VISA INTERNATIONAL LTD. v. CONTINENTAL RESOURCES (USA) LTD. 1045 other contract especially when the contract is not A between the same parties. [Para 18, 24 and 27] [1054-F- H; 1056-H; 1057-A, O] Rukmani Bai Gupta vs. Collector of Jabalpur, (1980) 4 SCC 556; M. Dayanand Reddy vs. A.P. Industrial Infrastructure Corpn. Ltd. & Ors. (1993) 3 SCC 137; and Bihar B State Mineral Development Corporation vs. Encon Building, (2003) 7 sec 418, relied on. Iron and Steel Company Ltd. vs. Tiwari Roadlines, (2007) 5 sec 703 held inapplicable. c 2.2. It is evident from the exchange of correspondence between the parties that the respondent while rejecting the names suggested by the applicant for resolution of the disputes by arbitrator never disputed the existence of the arbitration clause but, merely objected D to the names inter alia contending that the suggested arbitration would not be cost effective and the demand for arbitration itself was a premature one.
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