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Author Topic: S.B.P. & Co v. Patel Engineering & Anr  (Read 4411 times)

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S.B.P. & Co v. Patel Engineering & Anr
« on: April 21, 2013, 04:59:21 AM »
One of the most important effects of the judgment was the prospective ruling direction, which provided that any appointment of an arbitrator under S. 11 made prior to 26.10.2005 had to be treated as valid and objections including the existence or validity of the arbitration agreement, have be decided by the arbitrator under S.16 of the Act. The legal position enunciated by SBP would govern only application to be filed under S.11 of the Act from 26.10.2005 as also applications under S.11 (6) of the Act pending as on 26.10.2005 where arbitrator was not appointed. The decision of the Hon'ble Supreme Court was reiterated in the case of Maharishi Dayanand University v. Anand Coop. L/C Society Ltd & Anr.,25 wherein it was observed by the Court that if an appointment of an arbitrator has been made before 26.10.2005, that appointment has to be treated as valid even if it challenged before this Court.

The next issue which has been raised in many an appeal i.e. who should decide whether there is an arbitration agreement or not. Should it be decided by the Chief Justice or his designate before making an appointment of arbitrator under S.11 or the arbitrator who is appointed under S.11 of the Act? This issue is no longer res-integra. Ever since the decision in SBP., it is recognised law, that any question on whether there is an arbitration agreement or not, or whether the party who has applied under S.11 of the Act, is a party to such an agreement, is an issue which has to be decided by the Chief Justice or his designate under S.11 before making appointment of arbitrator.26

The decision of the Supreme Court in SBP was a watershed moment in the history of the Arbitration Act in India. The decision in SBP has gone a long way in clearing many a legal hurdle in appointment of arbitrators under the Act. It has clearly laid down the law applicable to the exercise of powers by the Chief Justice or his designate under S. 11 of the Act.

The aim of this Article would hence be achieved by summarizing the powers of the Chief Justice or his designate under S.11 - his own jurisdiction, to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for exercise of his power and on the qualifications of the arbitrator or arbitrators, and by believing that it has cleared many a doubt on the subject.

 

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