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Citation Codes
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citation codes
Case Number
Attorney(S)
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Acts
  • Section 2(1)(f) of the Act
  • Section 11 of the Act
  • Section 11(6) of the Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 11(6) of the Arbitration and Conciliation Act, 1996
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Section 2(1)(f) of the Act
  • Section 11 of the Act
  • Section 11(6) of the Act
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Section 11(6) of the Arbitration and Conciliation Act, 1996
Smart Summary

Factual and Procedural Background

The order concerns a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996. The petitioner seeks judicial intervention in the appointment of an arbitral tribunal after the International Chamber of Commerce (ICC) was unilaterally requested to constitute the tribunal pursuant to an arbitration clause that also mentioned the UNCITRAL Rules. During the preliminary hearing, the Court perceived that the matter raised fundamental questions about its own jurisdiction under Section 11(6) and about the powers of the ICC once the Chief Justice of India (CJI) or his designate has been approached. The single Judge therefore asked counsel for both sides to crystallise the legal issues requiring authoritative determination. Following extensive submissions, counsel for the petitioner proposed two questions of law, while counsel for the respondent framed five additional questions. The Court had earlier issued notice on an application for interim relief and now considers whether it possesses the incidental power to grant such relief while exercising Section 11 jurisdiction.

Legal Issues Presented

  1. Whether, where an arbitration clause contemplates the application of either ICC Rules or UNCITRAL Rules after constitution of the tribunal, a party may unilaterally invite the ICC to constitute the tribunal and proceed thereafter.
  2. Whether the Supreme Court’s decision in TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd. (2008) 14 SCC 271 correctly states the law on the definition of “international commercial arbitration.”
  3. Whether the Court’s jurisdiction under Section 11 extends to declaring invalid the constitution of an arbitral tribunal that an institution has purportedly formed under the arbitration agreement.
  4. Whether challenges to the jurisdiction of an arbitral tribunal constituted by an institution must be raised only before that tribunal (and in proceedings arising from its decision or award) rather than before the Court under Section 11.
  5. Whether, once an arbitral tribunal has been constituted, the Court can nevertheless intervene under Section 11 to constitute another tribunal.
  6. Whether an arbitration between two Indian companies can be an “international commercial arbitration” under Section 2(1)(f) of the Act when the management and control of one company is exercised outside India.
  7. Whether the present petition is maintainable in light of the reliefs claimed, and whether the statutory pre-conditions for exercise of jurisdiction under Section 11 are satisfied.

Arguments of the Parties

Petitioner’s Arguments

  • The two questions it has framed, if answered in its favour, would dispose of the entire controversy, making further issues redundant.
  • Relying on ITO v. M.K. Mohammed Kunhi, the Court possesses ancillary, incidental, or inherent powers to grant interim relief even while exercising jurisdiction under Section 11(6).

Respondent’s Arguments

  • Formulated five additional questions that, in its view, comprehensively cover the dispute’s legal dimensions.
  • Contends that once an arbitral tribunal has been constituted by an institutional authority, the Court should not interfere under Section 11.
  • Challenges the maintainability of the petition and questions whether statutory prerequisites for Section 11 jurisdiction are met.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd. (2008) 14 SCC 271 Definition and scope of “international commercial arbitration.” The correctness of this decision is expressly questioned and referred to a larger Bench.
ITO v. M.K. Mohammed Kunhi, AIR 1969 SC 430 Recognition of ancillary/incidental/inherent powers of a judicial authority. Cited by the petitioner to argue that the Court can grant interim relief while exercising Section 11(6) powers; the question is to be considered by the larger Bench.

Court's Reasoning and Analysis

The Court observed that the case raises jurisdictional issues of “far-reaching consequences” regarding:

  • The extent of its powers under Section 11(6) once the arbitration clause contemplates institutional rules such as ICC or UNCITRAL.
  • The competence of an institution like the ICC to constitute an arbitral tribunal after the CJI’s jurisdiction has been invoked.
  • The continued authority of the Court to intervene after a tribunal has already been formed.
  • The parameters of “international commercial arbitration” where both parties are Indian companies but management or control lies abroad.

Given the breadth and potential impact of these questions, the Judge concluded that they cannot be satisfactorily resolved by a single Judge bench. He therefore decided to place all seven formulated questions, along with the ancillary issue of the Court’s power to grant interim relief, before a larger Bench for authoritative clarification.

Holding and Implications

ORDER: The Registry is directed to obtain the necessary directions from the Hon’ble Chief Justice of India for the constitution of a larger Bench to decide the seven identified questions of law and the issue of interim relief.

Implications: The order does not resolve the merits of the Section 11 petition; instead, it initiates a reference to a larger Bench, signalling that the Supreme Court considers these jurisdictional questions sufficiently significant to warrant an authoritative ruling. Until the larger Bench decides, uncertainty persists regarding the scope of the Court’s Section 11 powers, the status of institutional appointments by the ICC, and the definition of international commercial arbitration in disputes involving Indian companies.

    Antrix Corporation Limited v. Devas Multimedia Private Limited .

    Order

    1. I have heard the learned counsel for the parties at length. In my opinion in the present petition, certain questions have arisen, which would have far-reaching consequences with regard to the scope and ambit of the powers of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“the Act”, for short) and the powers of ICC to constitute the Arbitral Tribunal, especially after the powers of the Chief Justice of India under Section 11 of the Act have been invoked. In order to define the contours of the controversy between the parties, I had requested the learned counsel appearing for the parties to formulate propositions of law which would need to be addressed by the larger Bench. Pursuant to the aforesaid request, Mr Soli J. Sorabjee, learned Senior Counsel and Mr Gopal Subramanium, learned Senior Counsel appearing for the petitioner have proposed the following two propositions of law:

    “1. Where the arbitration clause contemplates the application of either ICC Rules or Uncitral Rules after the constitution of the Tribunal, could a party unilaterally proceed to invoke ICC to constitute the Tribunal and proceed thereafter?
    2. Whether the judgment of this Hon'ble Court in TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd. (2008) 14 SCC 271 lays down the correct law with reference to the definition of International Commercial Arbitration?”

    2. According to Mr Subramanium, if the aforesaid propositions of law are answered in favour of the petitioner, no further question of law need be considered.

    3. On the other hand, Mr Harish Salve, learned Senior Counsel appearing for the respondent has also framed 5 questions of law which according to Mr Salve would also cover the entire field of controversy between the parties. Mr Salve has proposed the following 5 questions of law/propositions of law:

    “1. Whether the jurisdiction of the Court under Section 11 extends to declaring as invalid the constitution of an Arbitral Tribunal purportedly under an arbitration agreement, especially, where the Tribunal has been constituted by an institution purportedly acting under the arbitration agreement?
    2. Whether the jurisdiction of an Arbitration Tribunal constituted by an institution purportedly acting under an arbitration agreement can be assailed only before the Tribunal and in proceedings arising from the decision or award of such Tribunal and not before the Court under Section 11 of the Act?
    3. Whether, once an Arbitral Tribunal has been constituted, the Court has jurisdiction under Section 11 of the Act to interfere and constitute another tribunal?
    4. Whether an arbitration between two Indian companies could be an ‘international commercial arbitration’ within the meaning of Section 2(1)(f) of the Act if the management and control of one of the said companies is exercised in any country other than India?
    5. Whether the petition is maintainable in the light of the reliefs claimed and whether the conditions precedent for the exercise of jurisdiction under Section 11 of the Act are satisfied or not?”

    4. In my opinion given the magnitude of the controversy involved, all the seven questions need to be placed before the larger Bench to elucidate/clarify the jurisdictional content of this Court under Section 11 of the Act.

    5. Mr Sorabjee and Mr Subramanium, learned Senior Counsel relying on the judgment of this Court in ITO v. M.K Mohammed Kunhi AIR 1969 SC 430 have tried to persuade this Court that even while exercising the jurisdiction under Section 11(6) it would have the necessary ancillary/incidental/inherent power to pass interim order, keeping in view the peculiar facts and circumstances of a case.

    6. It may also be noticed that at the time of initial hearing of this petition I had actually issued notice on the interim relief. The matter was to be considered upon completion of pleadings. In that view of the matter, the question with regard to the powers/jurisdiction of this Court to grant interim relief may also be placed before the Bench.

    7. The Registry to take necessary directions from the Hon'ble the Chief Justice of India for the constitution of a larger Bench.

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    Comments

    Antrix Corporation Limited v. Devas Multimedia Private Limited .
    (Nov 16, 2011)