Accord And Satisfaction Does Not Affect The Existence Of An Arbitration Agreement: SBI General Insurance Ltd V Krish Spinning

A 3–Judge bench of the Supreme Court clarified the scope of judicial intervention under §11(6) of the Arbitration & Conciliation Act 1996, and also held that an insurance dispute about "accord and satisfaction" between parties does not affect the existence of an arbitration agreement and can be adjudicated upon by the arbitral tribunal as a preliminary issue.

Background

SBIG issued a Standard Fire and Special Perils (Material Damage) Policy to Krish. Disputes arose and Krish invoked the arbitration clause under the policy. An arbitrator was not agreed upon by the parties so Krish approached the Gujarat High Court to appoint an arbitrator under §11(6) of the Arbitration Act. SBIG contested the approach on the basis that Krish had signed an unqualified discharge voucher and there was thus no dispute between the parties. Krish contended that the discharge voucher was signed under coercion and financial duress. The High Court appointed an arbitrator and held that the