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Shin-Etsu Chemical Co. Ltd vs M/S Aksh Optifibre Ltd., & Anr on 12 August, 2005

Reiterating the law laid down in Shin Etsu Chemical Co. Ltd. Vs. Aksh Optifibre Ltd. (2005) 7 SCC 234, it was held that the correct approach to the review of the arbitration agreement is restricted to prima facie finding that there exists an arbitration agreement that is not null and void, inoperative or incapable of being performed. The key rationale for holding that the courts‟ review of the arbitration agreement should be limited to a prima facie standard is the principle of competence-competence. Further, if the courts are empowered to fully scrutinise the arbitration agreement, an arbitral proceeding would have to be stayed until such time that the court seized of the matter renders a decision on the arbitration agreement. This would defeat the credo and ethos of the Arbitration and Conciliation Act which is to enable expeditious arbitration without avoidable intervention by the judicial authorities. The rule of priority in favour of the arbitrators is counterbalanced by the courts‟ power to review the existence and Signature Not Verified Signed By:JUSTICE MUKTA GUPTA Signing Date:22.04.2022 ARB.P. 1124/2021 Page 9 of 11 17:05:35 validity of the arbitration agreement at the end of the arbitral process. It was further held that if on a bare perusal of the agreement it is found that a particular dispute is not relatable to the arbitration agreement, then, perhaps the court may decide the relief sought for by a party in a Section 11 petition. However, if there is a contestation with regard to the issue as to whether the dispute falls within the realm of the arbitration agreement, then the best course would be to allow the arbitrator to form a view in the matter.
Supreme Court of India Cites 0 - Cited by 74 - D M Dharmadhikari - Full Document
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