Section 45 of The Arbitration Act

My Lord, What is the scope of enquiry under Section 45 of The Arbitration and Conciliation Act, 1996?

It is settled law that an Arbitration Agreement is an independent or ‘self-contained’ agreement. Notwithstanding the fact that rights and obligations arising out of a substantive contract and the agreement to have the disputes settled through the process of Arbitration are contained in the same document, the Arbitration Agreement is an independent agreement.

The scope of enquiry under the Section 45 does not extend to the examination of the legality of the substantive contract. The language of the Section is plain and does not admit of any other construction. The Court is required to examine only the validity of the Arbitration Agreement within the parameters set out in Section 45, but not the substantive contract of which the Arbitration Agreement is a part.

In our opinion, the scope of enquiry under the Section 45 is confined only to the question whether the Arbitration Agreement is ‘null and void, inoperative or incapable of being performed’ but not the legality and validity of the substantive contract.

Hon’ble Justice J. Chelameswar, Sasan Power Limited v. North American Coal Corporation India Private Ltd., [Civil Appeal No. 8299 of 2016].

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