# ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED AND ANOTHER v. LAFARGE INDIA PRIVATE LIMITED - **Citation:** [2013] 17 S.C.R. 496 - **Court:** Supreme Court of India - **Decided:** 2013-12-12 - **Case number:** Civil Appeal No.11003 of 2013 - **Bench:** Anil R. Dave, Dipak Misra - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/arasmeta-captive-power-company-private-limited-and-another-v-lafarge-india-28791 - **Pages:** 33 ## Headnote Arbitration and Conciliation Act, 1996- ss.11 (5) and (6) C - Dispute falling in the realm of "excepted" matter - Role of Designated Judge, while dealing with an application u/ss.11(5) and (6) - Held: On facts, the Designated Judge while dealing with an application uls.11(6), on an issue raised with regard to the excepted matters, was not justified in addressing the D same on merits whether it was a dispute relating to excepted matters under the agreement in question or not - The Designated Judge fell into error by opining that the disputes raised were not "billing disputes", for the same should have been left to be adjudicated by the Arbitrator - Part of the E impugned order reflecting expression of opinion by the Designated Judge on the merits of the disputes, being pregnable, set aside. Precedent - Ratio decidendi - Held: The ratio of any decision must be understood in the background of the facts F of that case - Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation - The case is only an authority for what it actually decides, and not what logically follows from it - Further, the judgments rendered by a court are not to be read as statutes. G The Judge designated by the Chief Justice of the High Court, while dealing with an application preferred under Section 11 (5) and (6) of the Arbitration and Conciliation Act, 1996, repelled the submission of the H 496 ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 497 v. LAFARGE INDIA PRIVATE LIMITED appellant that the disputes in question, being excepted A matters, were squarely covered within the ambit of clause 9.3 of the agreement between the parties and hence, it was only to be referred to an expert for resolution and not to an arbitrator and, further addressing the issue on merits, opined that as the disputes were not covered B under the subject-matter of billing disputesin clause 9.3 of the agreement, the parties were not under obligation to refer the matter to the expert, and, accordingly, called for the names from both the parties and taking note of the inability expressed by the appellant, appointed an c arbitrator to adjudicate the disputes between the parties. In the instant appeal, the appellants, criticizing the view expressed by the designated Judge, submitted that the dispute raised by the respondent being a "billing dispute", which was an excepted matter, it was obligatory D on the contracting parties to resolve the dispute through an expert cemmittee by the mechanism provided in the agreement itself and the same could not have been referred to an arbitrator to be arbitrated upon. It was submitted that once a dispute falls in the realm of an E excepted matter, as stipulated in the agreement, it is a non-arbitrable claim and hence, the court alone has the jurisdiction to decide the issue of arbitrability and it cannot be left to be adjudicated by an arbitrator and as in the present case the Judge erroneously decided that F it was not a "billing dispute" and thereby not an excepted matter, the same warranted interference. Partly allowing the appeal, the Court HELD: 1. Regard being had to the anatomy of the G Arbitration and Conciliation Act, 1996 and the contours of its provisions, namely, Sections 8, 9, 11 and 16, a Bench of seven Judges in SBP & Co. by majority has stated about the functions to be performed by the Chief Justice or his H 498 SUPREME COURT REPORTS [2013) 17 S.C.R. A designate to do. Or, to put it differently, what'are required to be determined by the Chief Justice or his designate, have been exposited in paragraph 39 of the said judgment. In paragraph 47, the majority has summed up the conclusions in seriatim. On a careful reading of the B paragraph 39 and conclusion No. (iv), as set out in paragraph 47, of the said case, it is limpid that for the purpose of setting into motion the arbitral procedure the Chief Justice or his designate is required to decide the issues, namely, (i) territorial jurisdiction, (ii ## Text _Characters 0–39,966 of 61,505. This is a partial read: ask again with offset=39966 for what follows._ (2013] 17 S.C.R. 496 A ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED AND ANOTHER v. LAFARGE INDIA PRIVATE LIMITED (Civil Appeal No.11003 of 2013) B DECEMBER 12, 2013 [ANIL R. DAVE AND DIPAK MISRA, JJ.] Arbitration and Conciliation Act, 1996- ss.11 (5) and (6) C - Dispute falling in the realm of "excepted" matter - Role of Designated Judge, while dealing with an application u/ss.11(5) and (6) - Held: On facts, the Designated Judge while dealing with an application uls.11(6), on an issue raised with regard to the excepted matters, was not justified in addressing the D same on merits whether it was a dispute relating to excepted matters under the agreement in question or not - The Designated Judge fell into error by opining that the disputes raised were not "billing disputes", for the same should have been left to be adjudicated by the Arbitrator - Part of the E impugned order reflecting expression of opinion by the Designated Judge on the merits of the disputes, being pregnable, set aside. Precedent - Ratio decidendi - Held: The ratio of any decision must be understood in the background of the facts F of that case - Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation - The case is only an authority for what it actually decides, and not what logically follows from it - Further, the judgments rendered by a court are not to be read as statutes. G The Judge designated by the Chief Justice of the High Court, while dealing with an application preferred under Section 11 (5) and (6) of the Arbitration and Conciliation Act, 1996, repelled the submission of the H 496 ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 497 v. LAFARGE INDIA PRIVATE LIMITED appellant that the disputes in question, being excepted A matters, were squarely covered within the ambit of clause 9.3 of the agreement between the parties and hence, it was only to be referred to an expert for resolution and not to an arbitrator and, further addressing the issue on merits, opined that as the disputes were not covered B under the subject-matter of billing disputesin clause 9.3 of the agreement, the parties were not under obligation to refer the matter to the expert, and, accordingly, called for the names from both the parties and taking note of the inability expressed by the appellant, appointed an c arbitrator to adjudicate the disputes between the parties. In the instant appeal, the appellants, criticizing the view expressed by the designated Judge, submitted that the dispute raised by the respondent being a "billing dispute", which was an excepted matter, it was obligatory D on the contracting parties to resolve the dispute through an expert cemmittee by the mechanism provided in the agreement itself and the same could not have been referred to an arbitrator to be arbitrated upon. It was submitted that once a dispute falls in the realm of an E excepted matter, as stipulated in the agreement, it is a non-arbitrable claim and hence, the court alone has the jurisdiction to decide the issue of arbitrability and it cannot be left to be adjudicated by an arbitrator and as in the present case the Judge erroneously decided that F it was not a "billing dispute" and thereby not an excepted matter, the same warranted interference. Partly allowing the appeal, the Court HELD: 1. Regard being had to the anatomy of the G Arbitration and Conciliation Act, 1996 and the contours of its provisions, namely, Sections 8, 9, 11 and 16, a Bench of seven Judges in SBP & Co. by majority has stated about the functions to be performed by the Chief Justice or his H 498 SUPREME COURT REPORTS [2013) 17 S.C.R. A designate to do. Or, to put it differently, what'are required to be determined by the Chief Justice or his designate, have been exposited in paragraph 39 of the said judgment. In paragraph 47, the majority has summed up the conclusions in seriatim. On a careful reading of the B paragraph 39 and conclusion No. (iv), as set out in paragraph 47, of the said case, it is limpid that for the purpose of setting into motion the arbitral procedure the Chief Justice or his designate is required to decide the issues, namely, (i) territorial jurisdiction, (ii) existence of an c arbitration agreement between the parties, (iii) existence or otherwise of a live claim, and (iv) existence of the conditions for exercise of power and further satisfaction as regards the qualification of the arbitrator. That apart, under certain circumstances the Chief Justice or his 0 designate is also required to see whether a long-barred claim is soughtto be restricted and whether the parties had concluded the transaction by recording satisfaction of the mutual rights and obligations or by receiving the final payment without objection. [Paras 13, 14 and 15) [510-B; E 511-8, F-H; 512-A] SBP & Company v. Patel Engineering Ltd. and another (2005) 8 SCC 618: 2005 (4) Suppl. SCR 688 - followed. 2.1. The ratio of any decision must be understood in F the. background of the facts of that case. The case is only an authority for what it actually decides, and not what logically follows from it. [Paras 29, 30) [520-F; 521-C] 2.2. Further, the judgments rendered by a court are not to be read as statutes. The observations of courts are G neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. The observations must be red in the context in which they appear to have been stated. To interpret words, phrases and provisions of a statute, it may become necessary for H judges to embark into lengthy discussions but the ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 499. v. LAFARGE INDIA PRIVATE LIMITED discussion is meant to explain and not to define. Judges· A interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. [Para 35] [523-E-F] 2.3. The judgments are not to be construed as 8 statutes. Nor words or phrases in judgments to be interpreted like provisions of a statute. Some words· used in a judgment should be read and understood contextually and are not intended to be taken literally. Many a time a judge uses a phrase or expression with the C intention of emphasizing a point or accentuating a principle or even by way of a flourish of writing style. Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation. [Para 36] [523G; 524-A-B] Ambica Quarry Works v. State of Gujarat and others (1987) 1 SCC 213: 1987 (1) SCR 562; Krishena Kumar v. Union of India and others (1990) 4 SCC 207: 1990 (3) SCR 352; State of Orissa v. Mohd. llliyas (2006) 1 SCC 275: 2005 D (5) Suppl. SCR 395; Islamic Academy of Education v. State E of Kamataka (2003) 6 SCC 697: 2003 (2) Suppl. SCR 474; Natural Resources Allocation, In Re, Special Reference No. 1 of 2012; (2012) 10 SCC 1: 2012 (9) SCR 311; Union of India v. Amrit Lal Manchanda and another (2004) 3 SCC 75: 2004 (2) SCR 422 and Som Mittal v. Government of F Karnataka (2008) 3 SCC 574: 2008 (3) SCR 130 - relied on. Quinn v. Leath em (1901) AC 495 and Caledonian Railway Co. v. Walker's Trustees (1882) 7 App Cas 259 - referred to. G 3.1. It is luculent that the larger Bench in SBP & Co., after deliberating at length with regard to the role of the Chief Justice or his designate, while dealing with an application un~er Section 11 (6) of the Act, thought it appropriate to define what it precisely meant in paragraph H 500 SUPREME COURT REPORTS [2013] 17 S.C.R. A 39 of the judgment. The majority was absolutely conscious that it required to be so stated and hence, it did so. The deliberation was required to be made as the decision in Konkan Railway Corporation Ltd. where the Constitution Bench had held that an order passed by ·the s Chief Justice under Section 11 (6) is an administrative order and not a judicial one and, in that context, the Bench in many a paragraph proceeded to state about the role of the Chief Justice or his designate. When the learned Judges themselves have culled out the ratio c decidendi in paragraph 39, it is extremely difficult to state that the principle stated in SBP & Co. requires the Chief Justice or his designate to decide the controversy when raised pertaining to arbitrability of the disputes. Or to express an opinion on excepted matters. Such an 0 inference by syllogistic process is likely to usher in catastrophe in jurisprudence developed in this field. It is not apposite to pick up a line from here and there from the judgment or to choose one observation from here or there for raising it to the status of "the ratio decidendi". That is most likely to pave one on the path of danger and E it is to be scrupulously avoided. The propositions set out in SBP & Co. have been correctly understood by the twoJudge Bench in Boghara Polyfab Private Limited and the same have been appositely approved by the three-Judge Bench in Chiaro Controls India Private Limited and the F same is respectfully concurred with. [Para 37] [524-C-H; 525-A-C] 3.2. In Booz Allen and Hamilton Inc. case, the Court has dealt with the meaning of the term "arbitrability" and stated G that arbitrability has different meanings in different contexts. The Court enumerated three facets which relate to the jurisdiction of the Arbitral Tribunal. In sub-para (ii) of t11e said paragraph it has been stated that one facet of arbitrability is whether the disputes are enumerated or H described in the arbitration agreement as matters to be ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 501 v. LAFARGE INDIA PRIVATE LIMITED decided by arbitration or whether the disputes fall under A the "excepted matters" excluded from the purview of the arbitration agreement. In the said judgment, the learned Judges have referred to paragraph 19 of SBP & Co. and thereafter referred to Section 8 of the Act and opined what the judicial authority should decide. Thereafter the Court B proceeded to deal with nature and scope of the issues arising for consideration in an application under Section 11 of the Act for appointment of the arbitrator. The said ruling is absolutely in consonance with the principle laid down in SBP & Co. The meaning given to arbitrability c thereafter has been restricted to the adjudication under Section 8 and not under Section 11 of the Act. Thus, the said decision further reflects how the court has consistently understood the principles laid down in SBP & Co .. [Paras 4~, 41) [525-G-H; 526-A-C, F-G] D National Insurance Company Limited v. Boghara Polyfab Private Limited (2009) 1 SCC 267: 2008 (13) SCR 638 and Chiaro Controls India Private Limited v. Seven Trent Water Purification Inc. and others (2013) 1 SCC 641 and Booz Allen and Hamilton Inc. v. SB/ Home Finance Limited and others E (2011) 5 SCC 532: 2011 (7) SCR 310 - affirmed. Government of Andra Pradesh and others v. A. P. Jaiswal and other, AIR 2001 SC 499: 2001 (1) SCC 748; APS Kushwaha (SS/ Unit) v. Municipal Corporation, Gwalior and F others (2011) 13 SCC 258; Shree Ram Mills Ltd. v. Utility Premises (P) Ltd. (2007) 4 SCC 599: 2007 (4) SCR 279 and Konkan Rr3ilway Corporation Ltd. v. Rani Construction (P) Ltd. (2002) 2 SCC 388: 2002 (1) SCR 728 - referred to. 4. In conclusion, it is held as follows: - (i) The decisions rendered in Boghara Polyfab Private Limited and Chloro Controls India Private Limited are in accord with the G principles of law stated in SBP & Co.. H A B c D E F G H 502 SUPREME COURT REPORTS (2013] 17 S.C.R. (ii) The designated Judge, as perceived from the impugned order, while dealing with an application under Section 11(6) of the Act, on an issue raised with regard to the excepted matters, was not justified in addressing the same on merits whether it is a dispute relating to excepted matters under the agreement in question or not. (iii) The designated Judge has fallen into error by opining that the disputes raised are not "billing disputes':, for the same should have been left to be adjudicated by the learned Arbitrator. (iv) The part of the order impugned that reflects the expression of opinion by the designate of the Chief Justice on the merits of the disputes, being pregnable, deserves to be set aside and is hereby set aside. [Para 42) [526-G; 527-A-E;J Case Law Reference: 2001 (1) sec 748 referred to Para 2 (2013) 1 sec 641 affirmed Para 3 2005 (4) Suppl. SCR 688 followed Para 3 (2011) 13 sec 258 referred to Para 9 2008 (13) SCR 638 affirmed Para 10 • 2007 (4) SCR 279 referred to Para 16 1987 (1) SCR 562 relied on Para 29 (1901) AC 495 referred to Para 29 1990 (3) SCR 352 relied on Para 31 (1882) 7 App Cas 259 referred to Para 31 ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 503 v. LAFARGE INDIA PRIVATE LIMITED 2005 (5) Suppl. SCR 395 relied on Para 32 A 2003 (2) Suppl. SCR 474 relied on Para 33 2012 (9) SCR 311 relied on Para 34 2004 (2) SCR 422 relied on Para 35 B 2008 (3) SCR 130 relied on Para 36 2002 (1) SCR 728 referred to · Para 37 2011 (7) SCR 310 affirmed Para 40 CIVIL APPELLATE JURISDICTION : Civil Appeal No. c 11003 of 2013 From the Judgment and Order dated 22.07.2013 of the High Court of Chhattisgarh at Bilaspur in Arbitration Application No. 24 of 2012. D Ranjit Kumar, Ramesh Singh, Bina Gupta, Ranjit Raut, for _, the Appellant. Harish N. Salve, A.M. Singhvi, Manu Nair, Abhijeet Sinha, E Anuj Berry, Tanuj Bhushan (for Suresh A. Shroff & Co.) for the Respondent. The Judgment of the Court was delivered by DIPAK MISRA, J. 1. Leave granted. F 2. In Government of Andra Pradesh and others v. A P. Jaiswal and others' a three-Judge Bench has observed thus:- "Consistency is the cornerstone of the administration of justice. It is consistency which creates confidence in the G system and this consistency can never be achieved without respect to the rule of finality. It is with a view to achieve consistency in judicial pronouncements, the 1. AIR 2001 SC 499. H 504 SUPREME COURT REPORTS (2013] 17 S.C.R A Courts have evolved the rule of precedents, principle of stare decisis etc. These rules and principle are based on public policy ... " 3. We have commenced our opinion with the aforesaid exposition of law as arguments have been canvassed by Mr. B Ranjit Kumar, learned senior counsel for the appellants, with innovative intellectual animation how a three-Judge Bench in Chloro Controls India Private Limited v. Seven Trent Water Purification Inc. and others2 has inappositely and incorrectly understood the principles stated in the major part of the C decision rendered by a larger Bench in SBP & Company v. Patel Engineering Ltd. and another3 and, in resistance, Mr. Harish Salve and Dr. A.M. Singhvi, learned senior counsel for the respondent, while defending the view expressed later by the three-Judge Bench, have laid immense emphasis on D consistency and certainty of law that garner public confidence, especially in the field of arbitration, regard being had to the globalization of economy and stability of the jurisprudential concepts and pragmatic process of arbitration that sparkles the soul of commercial progress. We make it clear that we are not · E writing the grammar of arbitration but indubitably we intend, and we shall, in course of our delineation, endeavour to clear the maze, so that certainty remains "A Definite" and finality is 'Final'. 4. The present appeal, by special leave, is directed F against the judgment and order dated 22.7.2013 passed by the learned Judge, the designate of the Chief Justice of the High Court of Chhattisgarh at Bilaspur, in Arbitration Application No. 24 of .2012 whereby and whereunder, while dealing with an application preferred under Section 11 (5) and (6) of the Arbitration and· Conciliation Act, 1996 (for brevity "the Act"), has G repelled the submission of the appellant herein, the respondent in the original proceedings, that the disputes raised by the applicant, being excepted matters, were squarely covered 2. (2013) 1 sec 641. H 3 (2005) a sec 618. ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 505 v. LAFARGE INDIA PRIVATE LIMITED [DIPAK MISRA, J.] within the ambit of clause 9.3 of the agreement and hence, it A was only to be referred to an expert for resolution and not to an arbitrator and, further addressing the issue on merits, opined. that as the disputes are not covered under the subject-matter of billing disputes that find place in clause 9.3 of the agreement, the parties are not under obligation to refer the matter to the B expert, and, accordingly, called for the names from both the parties and taking note of the inability expressed by the counsel for the .respondents therein, appointed an arbitrator to adjudicate the disputes that have arisen between the parties. 5. Regard being had to the narrow compass of the controversy that has emanated for consideration before this Court, we need not dwell upon the factual matrix in extenso. Suffice it to state that the appellant No. 1 is a company carrying c on business in generation of power. The re~pondent owns 49% equity of the appellant No. 1 company and \he appellant No. 2 D owns 51% equity of the appellant No. 1 company. The appellant-company had entered into two agreements with the respondent for supply of power to the respondent. The first agreement, namely, a Power Purchase Agreement (PPA) was entered into on 10.2.2005 and the second agreement of similar E nature was entered into on 1.11.2007 for supply of power. In course of subS'istence of the agreements dispute arose between the parties relating to amounts that is due and payable. The appellants treated the dispute raised to be a "billing dispute" and sought to appoint an expert in accordance F with clause 16.2 of the agreements and, accordingly, communicated with the respondent vide letter dated 4.5.2012 proposing for apppintment of one of the three persons of expertise and repute for appointment as an expert in respect of both the PPAs. The appellant No.1 requested the G Confederation of Indian Industry vide letter dated 30.5.2012 to appoint a suitable expert. As put forth by the appellant, the respondent did not accede to resolve the dispute by way of appointing an expert instead, it moved the High Court for appointment of an arbitrator. H 506 SUPREME COURT REPORTS [2013] 17 S.C.R. A 6. In support of the application for appointment of arbitrator, it was contended before the learned designated Judge that as the claims for recovery of arrears had not been settled and the respondents therein had communicated that the claims came within the ambit of sub-clause (a) of clause 9.3 B of the agreement and required the matter to be dealt with by an expert and an expert should be appointed in terms of clause 16.2 and 16.4 of the agreement and declined to take recourse to arbitration, it had become incumbent to move the court for appointment of an arbitrator. c 7. The said stand and stance put forth by the respondent before the High Court was resisted by the present appellants that disputes would come within clause 16.2 of the agreement that deals with "Dispute Resolution" which provides a specific 0 mechanism and not arbitration, for it has been clearly postulated therein that where any dispute is not resolved as pro• · jed for in clause 16.2 then only the matter shall be submitted to arbitration at the request of either of the parties by written notice in accordance with the provisions contained E in the Act. 8. The High Court adverted to the meanings of "billing date", "billing period", "billing year, "clarification notice" and various terms used in the agreement, scanned the anatomy of clause 9.3 of the agreement that deals with "billing disputes" F and arrived at the conclusion that disputes raised do not come within the purview of sub-clause (a) of clause 9.3 and, accordingly, appointed an arbitrator, as has been stated hereinbefore. G 9. Mr. Ranjit Kumar, learned senior counsel appearing for the appellants, criticizing the view expressed by the designated Judge, has submitted that the dispute raised by the respondent being a "billing dispute" which is an excepted matter, it was obligatory on the contracting parties to resolve the dispute H through an expert committee by the mechanism provided in the ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 507 v. LAFARGE INDIA PRIVATE LIMITED [DIPAK MISR~, J.] agreement itself and the same could not have been referred to an arbitrator to be arbitrated upon. Pyramiding the said proponement, learned senior counsel would submit that once a dispute falls in the realm of an excepted matter, as stipulated A in the agreement, it is a non-arbitrable claim and hence, the court alone has the jurisdiction to decide the issue of B arbitrability and it cannot be left to be adjudicated by an arbitrator and as in the present case the learned Judge has erroneously decided that it is not a "billing dispute" and thereby not an excepted matter, the same warrants interference. In essence, the submission is that advertence to the spectrum of c arbitrability or to the sphere of excepted matter to decide the issue of jurisdiction as contemplated under Section 11 (6) of the Act is justified but the analysis and the conclusion as regards the nature of dispute is indefensible .. To buttress his submissions he has commended us to the decisions in SBP & Co. (supra) and APS Kushwaha (SS/ Unit) v. Municipal Corporation, Gwalior and others• . D 10. Mr. Harish N. Salve and Dr.. A.M. Singhvi, learned senior counsel appearing for the respondent, in oppugnation, have submitted that the principles stated in SBP's case have E been appositely understood by a two-Judge Bench in the decision in National Insurance Company Limited v. Boghara Polyfab Private Limited; and the analysis therein has been accepted and approved by a three-Judge Bench in Chiaro Controls India Private Limited (supra) and, therefore, whether F it is an excepted matter or not, despite strenuous urging of the same by the appellants, is required to be left to be adjudicated in the arbitral proceedings. The learned senior counsel would further submit that what has been opined in the SBP's case has already been reflected upon and that being the settled position G of law, certainty in the realm of adjudication should be allowed to stay. That apart, it is urged by Mr. Salve and Dr. Singhvi that 4. (2011 l 13 sec 2ss. s. (2009) 1 sec 2s1. H 508 SUPREME COURT REPORTS [2013] 17 S.C.R. A the designated Judge has fallen into error by delving into the merits of the matter, i.e., whether the disputes are "billing disputes" or not, for it should have been left to be adjudicated upon by the learned arbitrator. It is submitted that if any interference is warranted the said findings should be set aside B and the matter should be allowed to be arbitrated upon by the learned arbitrator as other conditions precedent for invocation of the arbitration clause have been accepted and are not under assail. 11. In reply to the submissions of learned senior counsel C for the respondent, Mr. Ranjit Kumar, learned senior counsel for the appellants, would contend that the analysis made in the case of Boghara Polyfab Private Limited (supra) by the twoJudge Bench is contrary to what has been stated in SBP's case and similarly the seal of concurrence given by the three-Judge D Bench in Chloro Controls India Private Limited (supra) is neither justified nor correct, and in fact, on a studied scrutiny, the lis deserves to be referred to a larger Bench. The learned senior counsel would further submit that certainty of law in its fundamental conceptuality has to be in consonance with the E principles stated in larger Bench decisions and not to be allowed to exist despite striking a note of discordance. 12. To appreciate the controversy it is pertinent to refer to certain provisions, namely, Sections 8, 9, 11 and 16 of the Act. F Section 8 deals with power to refer parties to arbitration where there is an arbitration agreement. The said power is conferred on a judicial authority before which an action is brought in a matter which is the subject-matter of agreement. Certain conditions precedent have been incorporated in sub-sections G (1) and (2) of the said provision. Section 9 provides for grant of interim measures by court. Section 11 deals with appointment of arbitrators. Section 11 (2) stipulates that subject to sub-section (6), the parties are free to agree on a propedure for appointing the arbitrator or arbitrators. Sub-sections (3) to (5) deal with requisite procedure to be followed in certain H I I I I I I I I I I I I I ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 509 v. LAFARGE INDIA PRIVATE LIMITED [DIPAK MISRA, J.] circumstances for appointment of arbitrator. Sub-sections (6) A and (8) of the said provision, which are relevant for the present purpose, read as follows: - "(6) Where, under an appointment procedure agreed upon by the parties, - B a. a party fails to act as required under that procedure; or b. the parties, or the two appointer arbitrators, fail to reach an agreement expected of them under that C procedure; or c. a person, including an institution, fails to perform any function entrusted to him or it under that procedure, · a party may request the Chief Justice or any person or institμtion designated by him to take the necessary measures, unless the agreement on the appointment procedure provides other means for securing the D appointment. E xxx xxx xxx (8) The Chief .Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard ~- F (a) any qualifications required of the arbitrator by the agreement of the parties; and (b) other considerations as are likely to secure the G appointment of ao independent and impartial arbitrator." Section 16 provides for competence oJ arbitral tribunal to rule on its own jurisdiction. It stipulates that the arbitral tribunal may rule on its own jurisdiction, including ruling on' any objections H 510 SUPREME COURT REPORTS [2013] 17 S.C.R. A with respect to the existence or validity of the arbitration agreement. 13. Regard being had to the anatomy of the Act and the contours of the aforesaid provisions, a Bench of seven Judges 8 in SBP & Co. (supra) by majority has stated about the functions to be performed by the Chief Justice or his designate to do. Or, to put it differently, what are required to be determined by the Chief Justice ·or his designate, have been exposited thus: c D E F G H "39. It is necessary to define what exactly the Chief Justice, approached-with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recordiog satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11 (6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence recorded, as may be ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED 511 v. LAFARGE INDIA PRIVATE LIMITED [DIPAK MISRA, J.] necessary. We think that adoption of this proced'!re in the A context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the court at various stages of the proceedings before the Arbitral Tribunal." B 14. In the said case, in paragraph 47 the majority has summed up the conclusions in seriatim. Conclusion (iv), as summed in the said paragraph, reads as follows: - "(iv) The Chief Justice or the designated Judge will have C the right to decide the preliminary aspects as ·indicate in the earlier part of this judgment. These will be his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his D power and on the qualifications of the arbitrator or arbitrators. The Chief Justice or the designated Judge would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11 (8) of the Act if the need arises but the order E appointing the arbitrator could only be that of the Chief Justice or the designated Judge." 15. On a careful reading of the paragraph 39 and conclusion No. (iv), as set out in paragraph 47, it is limpid that for the purpose of setting into motion the arbitral procedure the Chief Justice or his designate is required to decide the issues, namely, (i) territorial jurisdiction, (ii) existence of an arbitration agreement between the parties, (iii) existence or otherwise of F a live claim, and (iv) ex~tence of the conditions for exercise of power and further sqtisfaction as regards the qualification of G the arbitrator. That apart, under certain circumstances the Chief Justice or his designate is'also required to see whether a longbarred claim is sought to be restricted and whether the parties -Rad concluded the transaction by recording satisfaction of the H 512 SUPREME COURT REPORTS (2013] 17 S.C.R. A mutual rights and obligations or by receiving the final payment without objection. 16. At this stage we may notice the opinion expressed by a two-Judge Bench in Shree Ram Mills Ltd. v. Utility Premises B (P) Ltd. 6 , pertaining to the issues which are to be dealt with by the Chief Justice or his designate. The two-Judge Bench, after referring to paragraph 39 in SBP & Co. (supra), opined that the Chief Justice has to decide about the territorial jurisdiction and also whether there exists an arbitration agreement between the parties and whether such party has approached the court C for appointment of the arbitrator. The Chief Justice has to examine as to whether the claim is a dead one or in the sense whether the parties have already concluded the transaction and have recorded satisfaction of their mutual rights and obligations or whether the parties concerned have recorded their D satisfaction regarding the financial claims. In examining the said aspect if the parties have recorded their satisfaction regarding the financial claims, there will be no question