CPSE contract arbitration

In BGM and M-RPL-JMCT (JV) vs. Eastern Coalfields Limited, the Supreme Court addressed whether Clause 13 of a contract constituted a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. The appellant sought appointment of an arbitrator under Section 11, citing Clause 13. The High Court rejected the plea, emphasizing the conditional language "may be sought" in the clause. The Supreme Court affirmed, holding that Clause 13 merely offered a possibility for arbitration, requiring further mutual consent, and did not amount to a binding arbitration agreement. The Court reiterated the scope of judicial review under Section 11 is limited to prima facie existence of an arbitration agreement. (Drafted Summary)