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Court While Deciding ‘Section 11’ Application Seeking Appointment of Arbitrator Can Consider Whether Dispute Falls Within ‘Excepted Clause’: Supreme Court

[20 July 2022] The Supreme Court held that, at the stage of deciding application for appointment of arbitrator, a Court can consider whether the dispute falls within the excepted clause.

The court observed that the question of jurisdiction and non-­arbitrability can be considered by a Court at the stage of deciding an application under Section 11 of Arbitration and Conciliation Act if the facts are very clear and glaring.

“Parties to the contract are free to agree on applicability of (1) proper law of contract, (2) proper law of arbitration agreement and (3) proper law of the conduct of arbitration. Parties to the contract also may agree for matters excluded from the purview of arbitration”, the bench comprising Justices MR Shah and BV Nagarathna observed.

The court observed thus while disposing the appeal filed by Indian Oil Corporation Limited against the order of the High Court of Delhi allowing Arbitration Petitions by which, in exercise of powers under Section 11(6) of the Arbitration and Conciliation Act, 1996.

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