Summary
The Supreme Court retained appointment of an arbitrator while setting aside the High Court’s conclusive finding that an arbitration agreement existed. Disputed signatures, an inconclusive forensic report, irregular notarisation and inconsistent documentary accounts required evidence and cross-examination. At the referral stage, this uncertainty called for the arbitrator to decide existence as a preliminary issue, proceeding to merits only if an agreement was established. The Court’s observations remained prima facie.
Issues
- What level of review applied to a disputed arbitration agreement at the appointment stage.
- Whether the record justified a conclusive finding of agreement or required a preliminary determination by the arbitrator.
Provisions considered
- Section 11(6) and (6A), Arbitration and Conciliation Act, 1996Limited prima facie review required leaving the disputed agreement’s existence for preliminary arbitral determination while retaining the appointment. (¶¶ 10-18, 22-27)
- Sections 8(1), 11(7) and 37, Arbitration and Conciliation Act, 1996The Court explained equivalent prima facie referral standards and drew legislative attention to the differing appeal provisions. (¶ 19-21)
Held
- Referral scrutiny is summary and prima facie, including validity, and cannot become a full trial of debatable factual questions. Where that review is inconclusive, the tribunal is the preferred first adjudicator. (¶ 12-18)
- The forensic report did not establish authorship either way. Subsequent negotiations, invoices and payments involving another company, irregular notarisation and contested correspondence made a conclusive finding of an arbitration agreement unsafe. (¶ 22-27)
- The rule that an arbitration agreement need not always be signed did not resolve the pleaded denial that this alleged signed agreement was entered into at all. The High Court also made findings inconsistent with the correspondence and pleadings. (¶ 24-26)
- The sole arbitrator’s appointment survived, but he was to decide existence of the arbitration agreement first through detailed evidence and cross-examination. Merits could follow only on an affirmative finding, uninfluenced by the Court’s prima facie observations. (¶ 27)
- The suggestion to Parliament to reconsider appealability under Sections 11(7) and 37 was not itself an amendment conferring an appeal. (¶ 19-21)
Result
Appeal allowed in part: conclusive finding of an arbitration agreement set aside; sole arbitrator’s appointment retained with directions to decide existence first.