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16 The learned Senior Counsel appearing for the Respondents, contended by relying on Oberai Construction Pvt. Ltd. Vs. Worli Shivshahi Co-op. Hsg. Society Ltd., 2008(5) Bom C.R. 855, Nasir Husain Films Pvt. Ltd. Vs. Saregama India Pvt. Ltd., Appeal No. 457 of ig th 2007 in Arbitration Petition No. 81 of 2007 dated 7 April, 2008, referring to SBP & Company Vs. Patel Engineering Limited & Anr.

17 In Oberai Construction Pvt. Ltd. (Supra), the Division Bench of this Court based upon ( SBP & Company) (Supra) in para 11 observed as under:-

"11. The contention that the learned Judge had permitted the parties to proceed under section 11 may now be dealt with. Under Section 11 on an application made for constituting Arbitral Tribunal and further whether the subject-matter is convered by the arbitral clause can be gone into by the Court. See Patel Engineering (supra). It is submitted that once the Court under Section 9 decides the issue as to the existence of a contract containing an arbitral clause or an arbitration agreement in writing or subject-matter being covered by the arbitral clause there is no question of the issue being once again being considered by the arbitral clause, under Section 11. If the argument advanced on behalf of the appellants is accepted namely that the decision as to the existence of arbitration agreement in a proceeding under Section 9 is final then that must conclude the issue. Once a issue is decided by a Court in a competent proceeding, the finding on that issue cannot be gone into by another Court or judicial forum unless its finding was set aside by a Superior Court. The principle of issue estoppel will arise and bar the party who was party to the earlier proceedings from once again raising the issue which was concluded. The learned Judge however, has left it open to the appellants to submit more material and documents while submitting their case under section 11. Under section 11 as noted earlier the issue will be open for consideration if the issue has not been decided by a Competent Court or Judicial forum. Though section 9 of the Act confers a power to grant only interim relief, the grant of relief is subject to the Judicial forum or Court having jurisdiction to grant interim relief. As noted in Patel Engineering (supra) the Court while deciding an application under Section 9 can decide the issue as to the existence of an arbitral clause or the subject-matter being covered by the arbitral clause. Such a decision a finding as to jurisdiction cannot be prima facie, if the obiter dicta in Patel Engineering (supra) is to be accepted. The issue would stand finally concluded. If the issue is sought to be raised before another Court or Judicial forum, considering the principles of issue of estoppel, that Court or Judicial forum would be estopped from deciding that issue. The finding of the learned Judge in that case will have to be set aside. In our opinion, the decision rendered as to the existence of an arbitral agreement is final and not prima facie on the facts of the case."

The Division Bench has on merit confirmed the findings of the Single Judge.

18 In Nasir Husain (supra), the same Division Bench has observed as under:-

"5. The Supreme Court in SBP & Co. Vs. Patel Engineering Ltd., and another reported in (2005) 8 S.C.C. 618, has held that when a party approaches the court under Section 9 for grant of interim relief, asserting that there was a dispute liable to be arbitrated upon in terms of the agreement and the opposite party disputes the existence of the arbitration agreement as defined in the Act or raises a plea that the dispute involved was not covered by the arbitration clause, considering the terminology of Section 9 of the Act, that court has necessarily has jurisdiction to decide whether there is an arbitration agreement which is valid in law and whether the dispute sought to be raised is covered by the agreement. There is no indication in the Act, that the powers of the court are curtailed on these aspects. On the other hand, Section 9 insists, that once approached in that behalf, "the court shall have the same power for making orders as it has for the purpose of and in relation to any proceeding before it". The Court then observed, "Surely, when a matter is entrusted to a civil Court in the ordinary hierarchy of courts without anything more, the procedure of that court would govern the adjudication." A Petition under Section-9 is not a suit but a civil proceeding. Considering Section 141 of the Code of Civil Procedure, the procedure governing suits will be applicable, as far as it can be made applicable, in all civil proceedings. It will therefore, be open to the court to frame issues on these aspects and decide the same. On such issue being decided, the findings on the issues would conclude the issue between the parties on those issues and the said finding cannot be reopened in any proceeding between the parties either on application under Section-11 of before an arbitral Tribunal. The only remedy would be in an appeal filed under Section 37 of the Act.

7. In our opinion, under the Act of 1996 and considering the judgment in Patel Engineering (supra) and Section 141 of the Code of Civil Procedure, the issue of existence of an arbitral agreement as also the issue as to whether the subject matter is covered by the arbitral clause will have to be decided as an issue when such issue arises before a court entertaining the petition under Section-9 of the Act. A similar view has been taken by us in another unreported judgment of this court in Oberai Construction Pvt. Ltd. Vs. Worli Shivshahi Co.Op. Hsg. Society Ltd. decided on 30th January, 2008 in Appeal No.619 of 2007.