Contract - Conclusiveness of contract - Is the IPLA a valid and a concluded contract? Is it for the Court to decide this issue or have the parties intended to let the arbitral tribunal decide it? - It was contended on behalf of Appellant that mere signing of a document will not make it a concluded document, if in law, the contract is not concluded - Held, it was not disputed that there was a legal relationship between the parties of a long standing - Section 44 of the Indian Arbitration Act, 1996 applies to arbitral awards of differences between persons arising out of legal proceedings - Such a relationship may be contractual or not, so long it is considered as commercial under the laws in force in India - Further, that legal relationship must be in pursuance of an agreement, in writing, for arbitration, to which the New York Convention applies - Court can decline to make a reference to arbitration in case it finds that the arbitration agreement is null and void, inoperative or incapable of being performed - There were no pleadings to that effect in the plaint - Daman Trial Court findings that the contract was null and void and not based on free consent were rendered in the absence of relevant pleadings - Before the present Court it was not pleaded that the arbitration agreement was without free consent, or had been procured by coercion, undue influence, fraud, misrepresentation or was signed under a mistake - In other words, it was not claimed that the agreement was null and void, inoperative and incapable of being performed as it violated any of the provisions under Sections 14, 15, 16, 17, 18, 19, 19A and 20 of the Indian Contract Act, 1872 - Submission was that the matter cannot be referred to arbitration as the IPLA, containing the arbitration clause/agreement, was not a concluded contract - This would not fall within the parameters of an agreement being "null and void, inoperative or incapable of being performed", in terms of Sections 14, 15, 16, 17, 18, 19 and 20 of the Indian Contract Act, 1872 - These provisions set out the impediments, infirmities or eventualities that would render a particular provision of a contract or the whole contract void or voidable - These are the defences to resist a claim for specific performance of a concluded contract; or to resist a claim for damages for breach of a concluded contract - Issue as to whether there was a concluded contract between the parties can be left to the Arbitral Tribunal, though not for the same reasons - Further, the arbitration agreement contained in relevant clauses of IPLA was very widely worded and included all the disputes, controversies or differences concerning the legal relationship between the parties - It would include the disputes arising in respect of the IPLA with regard to its validity, interpretation, construction, performance, enforcement or its alleged breach - Submission that the arbitration agreement would perish as the IPLA has not been finalized was accordingly rejected also because the arbitration clause (agreement) was independent of the underlying contract, i.e. the IPLA containing the arbitration clause - Concept of separability of the arbitration clause/agreement from the underlying contract is a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract
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IN THE SUPREME COURT OF INDIA
Civil Appeal No. 2086 of 2014 (Arising out of SLP (C) No. 10924 of 2013) and Civil Appeal No. 2087 of 2014 (Arising out of SLP (C) No. 10906 of 2013)
Decided On: 14.02.2014
Appellants: Enercon (India) Ltd. and Ors.
Vs.
Respondent: Enercon GMBH and Anr.
Hon'ble Judges/Coram:Surinder Singh Nijjar and Fakkir Mohamed Ibrahim Kalifulla, JJ.
Citation: 2014(4)ABR713, 2014III AD (S.C.) 161, AIR2014SC3152, 2014(1)ARBLR257(SC), [2014]119CLA104(SC), (2014)2CompLJ1(SC), JT2014(3)SC49, 2014(2)SCALE452, (2014)5SCC1
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