Civil

Justice M.R. Shah and Krishna Murari held that any matter under the “excepted” category mentioned in the parties’ agreement is not subject to arbitration.

Hence, no hearings will be held regarding those issues. The Court concluded that Clause 36 states that if the matter is connected to Clauses 3, 6, and 9 of the Contract, the aggrieved party must go to the competent Court of law for selective enforcement of the contract, and Clause 37 states that all disputes, excluding those falling under Clause 36, must be sent to arbitration.

The Court ruled that an arbitration agreement must be properly interpreted and that the parties’ purpose of excluding some matters from arbitration must be given effect. Furthermore, it was decided that a party could not ask for more than what was specified in the contract and that the Court could not, even if appropriate, create a new contract on their behalf.

The Court then addressed who decides whether a matter is non-arbitrable. In the Vidya Drolia case, the Court held that where an objection to that effect is raised by the respondent, the High Courts might initiate a preliminary investigation to resolve the question of “Excepted Matters” while selecting the arbitrator. The High Court erred in choosing the arbitrator without first evaluating whether the issue genuinely falls inside the purview of the arbitration provision or the “excepted” category, the Court concluded.