TMI Blog2013 (2) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... cant to these proceedings had invoked arbitration by a notice dated 31 March 2011. A Memorandum of Understanding was executed between the parties on 23 October 2006. An additional Memorandum of Understanding was entered into on 27 March 2008. Following this, a Deed of Conveyance was executed on 28 March 2006 which has admittedly been registered. In pursuance of the agreement, the applicant to the Chamber Summons has been paid an amount of ₹ 87.70 crores leaving a balance of ₹ 22.99 crores for which cheques have been placed in deposit with an escrow agent. The Applicant to the Chamber Summons ( the Applicant ) invoked arbitration on 31 March 2011. By that letter, the Applicant expressed its readiness and willingness to deliver po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Applicant furnished its consent before the Court to the appointment of an Arbitrator, the Respondent had failed to disclose three documents dated 24 December 2008, 31 July 2009 and 6 December 2010 under which the Respondent had created equitable mortgages in favour of ABN Ambro Bank (under the first two documents) and a simple mortgage in favour of a consortium of twelve banks in consideration for loans or credit facilities. According to the Applicant, these three mortgages were executed on the premise that the Respondent is the absolute owner of the properties involved in the dispute under the Deed of Conveyance dated 28 March 2008. According to the Applicant, the Deed of Conveyance is not absolute, but conditional and that title to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to the appointment of the named Arbitrator; (iv) The scope of an application under Section 11 is far more restricted than proceedings under Section 8 and the only role of the Chief Justice or his designate is to determine as to whether an arbitration agreement exists and whether an application has been filed before the High Court having jurisdiction. The arbitration agreement being undisputed and since this Court has jurisdiction, a reference was made under section 11. The issue of arbitrability has to be determined by the Sole Arbitrator. 5. In a petition under Section 11 of the Arbitration and Conciliation Act, 1996, the jurisdiction of the Chief Justice or, as the case may be, of his designate is to determine whether (i) An arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited , (2011) 5 SCC 532 all aspects of arbitrability will have to be decided by the Court seized of the suit, and cannot be left to the decision of the Arbitrator. At para 33 page 545 Consequently, even if there is an arbitration agreement, the Court before which the civil suit is pending will refuse an application under Section 8 if the subject matter of the suit is capable of adjudication only by a public forum or the relief claimed can only be granted by a special court or Tribunal At para 33 page 546. On the other hand, as the Supreme Court emphasised, the jurisdiction under Section 11 is altogether of a different nature and far more restricted: The nature and scope of issues arising for consideration in an application under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a court of law and not by an arbitral tribunal. On the other hand, it was held that even an agreement to sell or an agreement to mortgage which does not involve a transfer of a right in rem but only creates a personal obligation can be the subject matter of an arbitration if specific performance is sought of such an agreement. In view of this position in law and particularly since issues of arbitrability in respect of the claim and counter claim will have to be decided not by this Court in the exercise of its jurisdiction under Section 11 but by the sole arbitrator, it is not possible to accept the contention which has been urged on behalf of the applicant. At this stage, it must be only clarified that it would be inappropriate for the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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