Arbitration Reference Can Be Declined If Dispute In Question Does Not Correlate To Arbitration Agreement: Supreme Court

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Arbitration Reference Can Be Declined If Dispute In Question Does Not Correlate To Arbitration Agreement

Case: DLF Home Developers Limited vs. Rajapura Homes Private Limited

Coram: CJI NV Ramana and Justice Surya Kant

Case No: Arb. Petn. 17 OF 2020

Court Observation: To say it differently, this Court or a High Court, as the case may be, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator. On the contrary, the Court(s) are obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act. Such a review, as already clarified by this Court, is not intended to usurp the jurisdiction of the Arbitral Tribunal but is aimed at streamlining the process of arbitration. Therefore, even when an arbitration agreement exists, it would not prevent the Court to decline a prayer for reference if the dispute in question does not correlate to the said agreement.

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