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As per case facts...The Bihar State Food and Civil Supplies Corporation (Corporation) and rice millers entered into agreements for paddy milling. Disputes arose when millers failed to deliver the milled
...rice, leading the Corporation to initiate criminal proceedings for fraud and file for recovery. The millers filed applications under Section 11 of the Arbitration Act, citing the contract's arbitration clause. The Corporation appealed against the High Court's order appointing an arbitrator, arguing that the dispute was non-arbitrable due to allegations of 'serious fraud' and the existence of a parallel statutory recovery remedy. The question arose...whether the High Court should have declined to refer the dispute to arbitration under Section 11(6) of the Arbitration and Conciliation Act, 1996, on the grounds of non-arbitrability due to serious fraud and public law implications, especially since the question of arbitrability is now confined to the existence of an arbitration agreement. Finally...the Supreme Court dismissed the appeals, holding that the scope of judicial scrutiny under Section 11(6A) of the Act is confined to examining the existence of an arbitration agreement, and all other issues, including that of non-arbitrability due to serious fraud or parallel recovery proceedings, must be left to the arbitral tribunal to decide as preliminary issues.
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