There Cannot Be Two Arbitration Proceedings With Respect To Same Contract/Transaction: Supreme Court

Observing that it is of the "firm opinion that there cannot be two arbitration proceedings with respect to the same contract/transaction", the Supreme Court stated that when a dispute has earlier been referred to arbitration and an award was passed on the claims made, then it is "rightful" to refuse to refer to arbitration- in exercise of Section 11 of the 1996 Arbitration Act- a fresh arbitration proceeding sought to be initiated with respect to some further claims. "Considering the aforesaid enunciation of law and the fact that the appointment of an arbitrator is sought for resolution of the dispute which in fact has already been adjudicated upon in the earlier claim petition filed by the applicant, I do not find any case is made out for appointment of an arbitrator afresh", held the High Court in the impugned order. In the impugned order, the High Court recorded that the advocate for the applicants submitted that as during the currency of execution of the project, there was dispute regarding price escalation, the applicant prayed for appointment of an arbitrator by filing an arbitration petition before the High Court, which was disposed off on September 16, 2016 directing the appointing authority under to ensure constitution of Arbitral Tribunal; that the Tribunal considered the claim, that the contract was concluded on March 22, 2016, the final bill was prepared and submitted on December 16, 2016, and that as certain claims were rejected, fresh application was filed by the applicant for appointment of arbitrator on August 21, 2017; that at this stage, the Court is only to examine as to whether there exists an arbitration clause in agreement and that the merits of the case cannot be gone into and that all other objections are open before the arbitrator. The High Court, in the order impugned in the present SLP, further recorded that on the other hand, the advocate for the respondent submitted that at the interim stage the applicant, raising certain disputes, sought appointment of an arbitrator, and that in terms of the direction issued by the High Court on September 16, 2016, Arbitral Tribunal was appointed; that the applicant submitted his claim petition on February 23, 2017, which was adjudicated upon by the Tribunal while passing award on December 11, 2020; that the claim for which the Arbitral Tribunal is now sought to be appointed by the applicant were part of the claim petition filed by him and have already been adjudicated upon by the Arbitral Tribunal, that in fact by filing a subsequent demand notice on August 21, 2017 the applicant wishes to raise the same issues which he had raised in the earlier arbitration proceedings and have already been dealt with and partly rejected; that once the claims made by the applicant have already been adjudicated upon by the arbitrator no question arises for appointment of fresh arbitrator. Considering the aforesaid enunciation of law and the fact that the appointment of an arbitrator is sought for resolution of the dispute which in fact has already been adjudicated upon in the earlier claim petition filed by the applicant, I do not find any case is made out for appointment of an arbitrator afresh", held the High Court in the impugned order.