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Issues: (i) Whether a dispute could be referred to arbitration after a discharge voucher/full and final settlement had been executed. (ii) Whether a discharge voucher alleged to have been obtained by coercion, undue influence or economic duress could bar reference to arbitration.
Issue (i): Whether a dispute could be referred to arbitration after a discharge voucher/full and final settlement had been executed.
Analysis: An arbitration clause survives where the dispute is about whether the contract was truly discharged, but it does not survive where the contract has been finally and voluntarily discharged by performance or accord and satisfaction and nothing remains to be adjudicated. The Chief Justice or designate under section 11 of the Arbitration and Conciliation Act, 1996 may decide whether the parties have conclusively settled the matter by final payment or a valid discharge voucher, or may leave that issue to the arbitral tribunal. If the discharge is found to be voluntary and binding, no arbitrable dispute survives.
Conclusion: A genuine and voluntary full and final settlement bars arbitration, but the question whether such settlement occurred is itself capable of judicial examination at the section 11 stage.
Issue (ii): Whether a discharge voucher alleged to have been obtained by coercion, undue influence or economic duress could bar reference to arbitration.
Analysis: A discharge voucher is not conclusive merely because it is signed. If the claimant asserts that it was extracted by coercion, undue influence, fraud, or economic compulsion, the court or the arbitral tribunal must examine that plea. Where the materials show that the voucher was insisted upon as a condition for release of admitted dues, the settlement is not necessarily voluntary and the dispute remains arbitrable. The execution of a voucher before actual payment, coupled with a credible allegation of compulsion, prevents the voucher from operating as a bar to reference.
Conclusion: A discharge voucher obtained under coercion, undue influence or economic duress does not prevent arbitration.
Final Conclusion: The refusal to interfere with the order appointing the arbitrator was justified, and the dispute remained open for arbitration on the question whether there had been a valid accord and satisfaction.
Ratio Decidendi: A full and final discharge voucher bars arbitration only if it is shown to be a valid and voluntary accord and satisfaction; where its voluntariness is disputed on grounds such as coercion or undue influence, the dispute is arbitrable and may be examined at the section 11 stage or by the arbitral tribunal.
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