SC: Scope Of Interference Of Courts While Appointing Arbitrators Limited To Determining Existence Of Arbitration Agreement

On 10 October 2017, the Supreme Court of India in the matter of Duro Felguera, S.A. v. Gangavaram Port Limited has upheld the legislative policy and purpose to minimize the Court's intervention at the stage of appointing an arbitrator, on an application initiated post 2015 amendment to the Arbitration and Conciliation Act 1996 (1996 Act) in terms of Section 11 (6A) of the 1996 Act. In supersession of the legal position prevalent prior to the 2015 Amendment, the only issue that the Courts exercising powers while appointing arbitrators need to assess is whether an arbitration agreement exists – 'nothing more, nothing less'.

Background

In this matter, Gangavaram Port Limited (GPL) had awarded tender work for Bulk Material Handling Systems of its sea port to Duro Felguera, S.A. (Duro) and its subsidiary Felguera Gruas India Private Limited (FGL). The original contract was divided into five different packages/contracts bearing different works. Out of the five