Supreme Court In the case of Booz-Allen & Hamilton Inc. vs. SBI Home Finance Ltd, (2011) 5 SC 532 wherein the Supreme Court was considering the scope of Section 8 of the Act in the SLP. The Supreme Court speaking through R.V. Raveendran, J. (as his Lordship then was) has observed that the powers of the court while hearing application under Section 8 of the Act are wider and the Court has consider the arbitrability of dispute from all the spheres as the arbitrability as a word has to be understood in the different contexts prior to referring the dispute to the arbitration. In the words of Supreme Court, it was observed thus:- “The nature and scope of issues arising for consideration in an application under section 11 of the Act for appointment of arbitrators, are far narrower than those arising in an application under section 8 of the Act, seeking reference of the parties to a suit to arbitration. While considering an application under section 11 of the Act, the Chief Justice or his designate would not embark upon an examination of the issue of `arbitrability or appropriateness of adjudication by a private forum, once he finds that there was an arbitration agreement between or among the parties, and would leave the issue of arbitrability for the decision of the arbitral Tribunal. If the arbitrator wrongly holds that the dispute is arbitrable, the aggrieved party will have to challenge the award by filing an application under section 34 of the Act, relying upon sub-section 2(b)(i) of that section. But where the issue of `arbitrability arises in the context of an application under section 8 of the Act in a pending suit, all aspects of arbitrability have to be decided by the court seized of the suit, and cannot be left to the decision of the Arbitrator. Even if there is an arbitration agreement between the parties, and even if the dispute is covered by the arbitration agreement, the court where the civil suit is pending, will refuse an application under Section 8 of the Act, to refer the parties to arbitration, 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.”
Posted on: Tue, 19 Aug 2014 10:33:42 +0000