The Supreme Court of India clarified that once a judicial authority has declined to refer the dispute pending before it to arbitration under The Arbitration and Conciliation Act, 1996 (“Act”) and the said decision has become final, neither party to the proceedings can thereafter invoke the jurisdiction of the Chief Justice under Section 11(6) of the Act.
The Court said, “When the suit is at the final stage, the respondents have sought appointment of an arbitrator under Section 11(6) of the Act. Having approached the civil court and having opposed the reference to arbitration under Section 8(1) of the Act and the decision of the court in that regard having become final, the respondents cannot invoke jurisdiction under Section 11(6) of the Act; it is hit by the principle of issue estoppel.”
“….the order passed by the civil court that it was well within its jurisdiction to try the suit, despite the objection regarding the existence of a clause for arbitration, has become final. Thereafter, Section 11(6) jurisdiction of the Chief Justice cannot be invoked by either party. The principle of res judicata will also be attracted in such a case”, the Court opined.