Arbitration agreement survives contract termination and resolution plan; referral court limited to prima facie existence, tribunal decides extinguishment.

Clause 19.13 is a written arbitration agreement invoking the Arbitration and Conciliation Act and, under the separability doctrine, prima facie survives termination of the underlying contract and approval of a Resolution Plan. The court's Section 11 enquiry is confined to a prima facie determination of existence; substantive consequences of an approved Resolution Plan, including the Clean Slate doctrine and alleged extinguishment, are contested matters reserved for the Arbitral Tribunal under competence competence. Extinguishment under an approved Resolution Plan operates primarily against claims versus the corporate debtor; claims by the corporate debtor against third parties are not automatically extinguished and require tribunal adjudication. A sole arbitrator is appointed prima facie.

---

---

Issues: (i) Whether Clause 19.13 of the Conditions of Contract dated 09.07.2018 constitutes a valid arbitration agreement and whether it survives termination of the underlying contract and the approval of the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016; (ii) Whether the High Court's jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996 is confined to a prima facie examination of the existence of an arbitration agreement under Section 11(6-A), or whether it may examine consequences of an approved Resolution Plan including the Clean Slate doctrine; (iii) Whether approval of a Resolution Plan under Section 31(1) IBC extinguishes all claims not forming part of the plan, including claims of the corporate debtor against third parties; (iv) Whether the disputes raised by the Petitioner are extinguished by the CIRP process or amount to accord and satisfaction, waiver or estoppel, or are live arbitrable disputes; (v) The interplay between competence-competence under Section 16 A&C Act and the finality of an approved Resolution Plan under Section 31 IBC, and whether objections based on the Resolution Plan constitute a threshold jurisdictional bar at the Section 11 stage; (vi) Whether any live and subsisting arbitrable dispute survives so as to warrant appointment of a Sole Arbitrator.

Issue (i): Whether Clause 19.13 is a valid arbitration agreement and whether it survives termination of the contract and approval of the Resolution Plan.

Analysis: Clause 19.13 is in writing, part of the Conditions of Contract, refers expressly to arbitration, specifies a sole arbitrator appointed by the Employer and the seat (Bangalore), and invokes the Arbitration and Conciliation Act, 1996. The doctrine of separability treats the arbitration clause as independent of the underlying contract. Section 31 IBC binds stakeholders to an approved resolution plan and operates to freeze or extinguish claims addressed by that plan, but Section 31 does not, on its face, expressly extinguish arbitration agreements as a dispute-resolution mechanism. No binding authority was shown holding that approval of a resolution plan automatically extinguishes an arbitration agreement as such.

Conclusion: Clause 19.13 constitutes a valid arbitration agreement within the meaning of Section 7 of the Arbitration and Conciliation Act, 1996, and, prima facie, the arbitration agreement survives termination of the underlying contract and continues to subsist notwithstanding approval of the Resolution Plan under Section 31(1) IBC.

Issue (ii): Scope of this Court's jurisdiction under Section 11(6-A) A&C Act: confined to prima facie existence or competent to examine effects of an approved Resolution Plan including the Clean Slate doctrine.

Analysis: Section 11(6-A) confines the High Court's examination to the existence of an arbitration agreement on a prima facie basis. Supreme Court authorities (including the principles restated in recent decisions) limit the Referral Court to a prima facie scrutiny under Section 7 and reserve substantive and contested inquiries to the Arbitral Tribunal under Section 16. Questions about the legal consequences of an approved Resolution Plan, including whether claims were extinguished or constitute statutory accord, engage contested facts and complex questions of law that do not go to the formal existence of the arbitration agreement.

Conclusion: The Court's enquiry under Section 11(6-A) is confined to a prima facie examination of the existence of an arbitration agreement; the legal consequences of approval of a Resolution Plan including applicability of the Clean Slate doctrine are substantive matters to be left to the Arbitral Tribunal.

Issue (iii): Effect of approval of the Resolution Plan under Section 31(1) IBC on claims raised in these proceedings-whether extinguishment extends to corporate debtor's claims against third parties.

Analysis: Authorities establish that Section 31(1) binds stakeholders and operates to freeze or extinguish claims against the corporate debtor that are not part of the approved plan, protecting the resolution applicant's fresh slate. Parallel authorities recognize that civil remedies available to the corporate debtor or its successor may survive and be pursued against third parties; whether particular claims survive depends on the nature of the claims, whether they were presented to the RP, and the content of the resolution plan-questions requiring detailed factual and legal examination.

Conclusion: On a prima facie basis, extinguishment under Section 31(1) IBC operates primarily in respect of claims against the corporate debtor; claims of the corporate debtor against third parties are not automatically extinguished and may survive, subject to final determination by the Arbitral Tribunal.

Issue (iv): Whether, given the CIRP and approved Resolution Plan without reservation, the Petitioner's disputes are extinguished or constitute live arbitrable disputes (including questions of accord and satisfaction, waiver, estoppel).

Analysis: Questions of accord and satisfaction, waiver, estoppel and statutory extinguishment involve mixed questions of law and fact and depend on whether claims were or should have been raised before the RP and on the content of the resolution plan. Precedent treats such issues as matters for the Arbitral Tribunal (competence-competence) rather than for a summary Section 11 enquiry. The Petitioner alleges specific operational claims and conduct during moratorium that were not adjudicated on the merits in the CIRP record presented to this Court.

Conclusion: The disputes, prima facie, are live and arbitrable and are not shown to be conclusively extinguished by the CIRP; questions of accord and satisfaction, waiver, estoppel and extinguishment are to be determined by the Arbitral Tribunal.

Issue (v): Interplay between competence-competence under Section 16 A&C Act and finality of an approved Resolution Plan under Section 31 IBC-whether statutory finality is a threshold jurisdictional bar at Section 11.

Analysis: Section 16 vests the Arbitral Tribunal with power to rule on its jurisdiction including the existence and validity of the arbitration agreement; the doctrine has a negative effect restricting the Referral Court from adjudicating matters reserved for the tribunal. While Section 238 IBC gives IBC overriding effect, whether the Resolution Plan's consequences create a jurisdictional bar in the particular case is a substantive question of fact and law. The Arbitral Tribunal is the appropriate forum to adjudicate whether claims are extinguished and whether it has jurisdiction.

Conclusion: Competence-competence requires that, upon a prima facie arbitration agreement, objections based on the Resolution Plan be left to the Arbitral Tribunal; the statutory consequences of approval of the Resolution Plan do not constitute a threshold jurisdictional bar for the Section 11 Court to refuse appointment of an arbitrator.

Issue (vi): Whether live and subsisting arbitrable disputes survive to warrant appointment of a Sole Arbitrator.

Analysis: The arbitration clause exists and is broad; the Petitioner's pleaded claims fall within its scope. The Court's prima facie findings on existence and survivability of the arbitration agreement, together with the restricted role under Section 11(6-A), indicate that substantive defences raised by the Respondent are matters for the Arbitral Tribunal to decide.

Conclusion: Live and subsisting arbitrable disputes, prima facie, survive between the parties; the petition is allowed and a Sole Arbitrator is appointed to adjudicate the disputes, with liberty for the Arbitral Tribunal to consider all defences.

Final Conclusion: On the prima facie record the Court finds a valid and subsisting arbitration agreement and confines itself to appointment of an arbitrator under Section 11(6) A&C Act; substantive questions concerning the effect of the Resolution Plan, clean slate doctrine, extinguishment of claims, accord and satisfaction, waiver or estoppel are reserved for the Arbitral Tribunal to decide.

Ratio Decidendi: Where an arbitration clause satisfies Section 7 A&C Act and is not formally disputed, the Section 11(6-A) enquiry is limited to a prima facie determination of its existence; the doctrine of separability ordinarily preserves the arbitration agreement despite termination of the underlying contract or approval of a resolution plan, and contested questions about extinguishment of claims under Section 31 IBC or statutory finality are substantive matters for the Arbitral Tribunal under Section 16.

---