Arbitration agreement survives insolvency objections; Section 11 review remains prima facie, with Clean Slate issues left to the tribunal.

Clause 19.13 was analysed as a valid arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, and the doctrine of separability meant its operation was not automatically lost on termination of the underlying contract or approval of a resolution plan. The Section 11(6-A) inquiry was treated as confined to a prima facie check of whether an arbitration agreement exists, leaving insolvency-based objections, including the Clean Slate doctrine, to the arbitral tribunal under Section 16. The note also distinguishes claims against a corporate debtor from the debtor's own independent civil remedies, treating the disputes as prima facie arbitrable despite objections based on extinguishment, waiver, estoppel, or accord and satisfaction.

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Issues: (i) Whether Clause 19.13 of the Conditions of Contract constituted a valid arbitration agreement and survived termination of the underlying contract notwithstanding approval of the resolution plan; (ii) whether the Court under Section 11(6-A) was confined to a prima facie examination of the existence of an arbitration agreement or could examine the effect of the resolution plan and the Clean Slate doctrine; (iii) whether approval of the resolution plan extinguished the Petitioner's claims against the Respondent or left intact independent civil remedies capable of being referred to arbitration.

Issue (i): Whether Clause 19.13 of the Conditions of Contract constituted a valid arbitration agreement and survived termination of the underlying contract notwithstanding approval of the resolution plan.

Analysis: The clause required disputes arising out of or touching the works contract to be referred to arbitration by a sole arbitrator, was contained in a written contract, and clearly satisfied the ingredients of an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996. The arbitration clause was treated as distinct from the underlying commercial contract. Applying the doctrine of separability, the termination of the contract did not, by itself, extinguish the arbitration agreement. The approval of the resolution plan under the Insolvency and Bankruptcy Code, 2016 was held not to expressly extinguish the arbitration clause itself.

Conclusion: Clause 19.13 was a valid arbitration agreement and, prima facie, continued to subsist despite termination of the contract and approval of the resolution plan.

Issue (ii): Whether the Court under Section 11(6-A) was confined to a prima facie examination of the existence of an arbitration agreement or could examine the effect of the resolution plan and the Clean Slate doctrine.

Analysis: The scope of Section 11(6-A) was held to be narrow and limited to prima facie scrutiny of the existence of an arbitration agreement. The Court treated questions arising from the resolution plan, the Clean Slate doctrine, and the effect of insolvency on the claims as matters involving contested facts and legal consequences beyond the limited referral inquiry. Those matters were held to fall within the domain of the arbitral tribunal under Section 16.

Conclusion: The Court was confined to a prima facie Section 11 inquiry and could not finally decide the insolvency-based objections at the referral stage.

Issue (iii): Whether approval of the resolution plan extinguished the Petitioner's claims against the Respondent or left intact independent civil remedies capable of being referred to arbitration.

Analysis: The Clean Slate doctrine was understood to operate principally against stale claims against the corporate debtor and not to extinguish, as a matter of law at the referral stage, the corporate debtor's independent remedies against third parties. The Court relied on the distinction between claims against the corporate debtor and claims by the corporate debtor against counterparties. Questions of accord and satisfaction, waiver, estoppel, and extinction by operation of law were treated as disputed matters requiring arbitral determination. The claims were therefore regarded, prima facie, as live disputes falling within the arbitration clause.

Conclusion: The Petitioner's claims were not held to be extinguished at the Section 11 stage, and the disputes were treated as arbitrable.

Final Conclusion: The petition was allowed and an arbitrator was appointed, with all substantive objections arising from insolvency, resolution-plan approval, and the Clean Slate doctrine left open for decision by the arbitral tribunal.

Ratio Decidendi: At the Section 11 stage, the Court's inquiry is limited to the prima facie existence of an arbitration agreement, and insolvency-based objections affecting the merits or survival of claims ordinarily fall for determination by the arbitral tribunal under Section 16 unless the arbitration agreement itself is shown not to exist.

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