In Brief
Meenakshi Solar Power challenged the High Court's dismissal of an arbitration referral application on the ground that an underlying Share Purchase Agreement had been novated by a subsequent Tripartite Agreement. The Supreme Court held that at the referral stage, courts have limited powers—they can only refuse referral if claims are manifestly time-barred and dead or if there is no subsisting dispute. The Court ruled that the question of whether novation occurred is a matter of merits belonging to the arbitrator, not the court. The Court distinguished between jurisdictional issues (which courts must decide) and substantive issues like novation, limitation, and accord and satisfaction (which arbitrators must decide). The appeal was allowed, and the matter was referred to arbitration with a court-appointed sole arbitrator.
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