Appellant contends, i) no Arbitrable Dispute remained after a ‘full and final settlement’ and ii) appointment of an Arbitrator was an exercise in futility. However, we uphold and affirm, appointment of Justice K.A. Puj, Former Judge of High Court of Gujarat, as an Arbitrator.

There is no rule of an absolute kind which precludes Arbitration in cases where a ‘full and final settlement’ has been arrived at. A dispute pertaining to ‘accord and satisfaction’ of claims is not one which attacks or questions existence of an Arbitration Agreement in any way. Arbitration Agreements, being separate and independent from underlying substantive contracts in which they are contained, continue to remain in existence even after original contracts stand discharged by ‘accord and satisfaction’.

A question of ‘accord and satisfaction’, being a mixed question of law and fact, comes within exclusive jurisdiction of an Arbitral Tribunal, if not otherwise agreed upon between parties. It should not be looked into by a Referral Court, even for a prima facie determination, before an Arbitral Tribunal first has had an opportunity to look into it. If a Referral Court goes beyond scope of enquiry as provided under Section 11 of Act of 1996 and examines issue of ‘accord and satisfaction’, it would amount to usurpation of power which parties had intended to be exercisable by an Arbitral Tribunal alone and not by National Courts. Such a scenario would impeach Arbitral Autonomy and would not fit well with scheme of Act of 1996.

Arbitral Tribunals have benefit of going through all relevant evidence and pleadings in much more detail than Referral Courts.

– Hon’ble Justice J.B. Pardiwala, SBI General Insurance Co. Ltd. v. Krish Spinning [Civil Appeal No. 7821 of 2024].