2006 AIR SCW 3172 ::(2007) 1 WLC(SC)CVL 511 ::(2007) 1 CivLJ 272 ::2006 (11) SCC 245 ::(2006) 6 Scale 491 ::(2006) 5 Scale 535 ::(2006) 62 ArbiLR 547 ::(2006) 4 ICC 126 ::AIR 2007 SC (Supp) 1770 ::(2006) 6 Supreme 519 ::(2006) 4 SCJ 217

Supreme Court Of India

(From : AIR 2005 Cal 133)

Hon'ble Judge(s): S. B. Sinha, Tarun Chatterjee , JJ

Arbitration and Conciliation Act (26 of 1996) , S.2(b), S.7, S.34, S.36, S.35— Contract Act (9 of 1872) , S.23— Two-tier arbitration agreement - Is not valid - Renders provisions of Ss. 34 and 36 nugatory - "Contracting out" provision is opposed to public policy (Per Sinha, J.) - Parties consciously agreed to have domestic award followed by foreign award on same dispute - Such a two-tier agreement is permissible in India - Not opposed to public policy and does not render provisions of Ss. 34 and 36 Nugatory (Per Tarun Chatterjee, J. - Dissenting view) - In view of difference of opinion, matter referred to larger Bench (Per Court). Per Sinha, J. :--1996 Act does not contemplate that an arbitration award can be an admixture of domestic award and foreign award. The 1996 Act in no uncertain terms speaks of an arbitration agreement, as would appear from the interpretation clause contained in clause 2(b) as also Section 7 thereof, which excludes the concept of two-tier arbitration capable of being enforced under two different chapters. Amulti-tier arbitration may be held to be operative and valid when it was governed solely by the 1940 Act or the 1961 Act inasmuch as in such an event, the procedure laid down therein could have ben followed. The 1996 Act, however, on the other hand, repeals and replaces not only the 1940 Act but also the 1961 Act and provides for d....