1. Parties sought appointment of an arbitrator under the Act following disputes over shareholding and land development agreements, after earlier arbitration proceedings were abandoned. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )
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2026 Supreme(SC) 328
SUPREME COURT OF INDIA
PAMIDIGHANTAM SRI NARASIMHA, ALOK ARADHE, JJ.
Rajiv Gaddh – Appellant
Versus
Subodh Parkash – Respondent
Civil Appeal No. 4131 of 2026 (@ SLP (C) No. 4430 of 2025)
Decided On : 01-04-2026
Advocates appeared:
For the Petitioner(s): Mr. Anil Airi, Sr. Adv. Ms. Lubna Naaz, AOR Ms. Azra Rehman, Adv. Mr. Arvind Bhatt, Adv. Mr. Asheesh Kumar Mishra, Adv. Mr. Harsh Gautam, Adv. Mr. Vishal Tyagi, Adv. Ms. Bindya Lagawney, Adv. Ms. Jasmin Sokhi, Adv.
For the Respondent(s): Mr. Gagan Gupta, Sr. Adv. Mr. Mahesh Thakur, AOR Mr. Vibhav Chaturvedi, Adv. Mr. Narveer Yadav, Adv. Mr. Siddhartha Sati, Adv. Ms. Ruchi Kumari, Adv. Ms. Anusha R, Adv. Dr. Anthony Raju, Adv.
For the Petitioner(s): Mr. Anil Airi, Sr. Adv. Ms. Lubna Naaz, AOR Ms. Azra Rehman, Adv. Mr. Arvind Bhatt, Adv. Mr. Asheesh Kumar Mishra, Adv. Mr. Harsh Gautam, Adv. Mr. Vishal Tyagi, Adv. Ms. Bindya Lagawney, Adv. Ms. Jasmin Sokhi, Adv.
For the Respondent(s): Mr. Gagan Gupta, Sr. Adv. Mr. Mahesh Thakur, AOR Mr. Vibhav Chaturvedi, Adv. Mr. Narveer Yadav, Adv. Mr. Siddhartha Sati, Adv. Ms. Ruchi Kumari, Adv. Ms. Anusha R, Adv. Dr. Anthony Raju, Adv.
IMPORTANT POINT
(1) Appointment of sole Arbitrator – Issue of res judicata does not arise for consideration in a Section 11 of Arbitration and Conciliation Act, 1996 proceeding.
(2) Principles of Order 23 Rule 1 of CPC prohibiting institution of fresh proceeding on same cause of action without seeking leave of court to file a fresh application, would apply to proceeding under Section 11(6) of Act.
Headnote:
Arbitration and Conciliation Act, 1996 – Section 11 – Civil Procedure Code, 1908 – Section 11 and Order 23 Rule 11 – Appointment of sole Arbitrator – Jurisdiction under Section 11 of Act is primarily confined to determining existence of arbitration agreement – Issue of res judicata does not arise for consideration in a Section 11 proceeding – Issue, which was subjudice, was with regard to validity of auction – Dispute between appellant and respondent was not subject matter of Civil Appeal – On dismissal of Civil Appeal filed by owner of land, no fresh cause of action accrued to respondent – Subsequent application filed under Section 11(6) was based on same cause of action and was barred on principles contained in Order 23 Rule 1 of CPC – A litigant cannot be permitted to abuse process of Court to file a fresh proceeding again on same cause of action – Bar contained in Order 23 Rule 1 of CPC which applies to proceeding under Section 11 of Act is founded on Public Policy – Subsequent application filed by respondent was not maintainable – Impugned order passed by High Court quashed and set aside. (Paras 15, 19 and 20)
Facts of the case:
Present appeal arises from the order dated 08.11.2024 passed by Punjab and Haryana High Court (High Court) whereby application filed by respondent under Section 11 of Arbitration and Conciliation Act, 1996 was allowed and sole arbitrator was appointed.
Findings of Court:
Impugned order dated 08.11.2024, passed by the High Court is quashed and set aside.
Result : Appeal allowed.
Judgement Key Points
Key Points: - The appeal challenges the Punjab and Haryana High Court's order dated 08.11.2024 appointing a sole arbitrator on the respondent's Section 11 application (!) (!) (!) . - Parties jointly participated in a 2005 auction of Hoshiarpur Land, executed agreements on 02.04.2013 containing arbitration clauses, and a tripartite agreement with HDFC Bank (!) (!) (!) (!) . - Respondent invoked arbitration in 2015, leading to multiple arbitrator appointments, but abandoned proceedings by 29.08.2019 and failed to revive claims after the 30.06.2020 award (!) (!) (!) (!) (!) . - Supreme Court judgment on 09.07.2021 in Civil Appeal No. 1599 of 2011 upheld the auction's validity but did not address disputes between appellant and respondent, creating no fresh cause of action (!) (!) (!) . - Section 11 jurisdiction is confined to determining existence of arbitration agreement; res judicata does not arise in such proceedings (!) (!) . - Principles of Order 23 Rule 1 CPC, barring fresh proceedings on the same cause of action without court leave, apply to Section 11(6) applications, as held in HPCL Bio-Fuels Ltd. (!) (!) (!) . - Respondent's second Section 11 application in 2021 was on the same cause of action, constituting abuse of process and barred by public policy (!) (!) . - High Court's order dated 08.11.2024 quashed and set aside; appeal allowed with no costs (!) (!) .
What is the scope of jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996?
Do principles of Order 23 Rule 1 of CPC apply to proceedings under Section 11(6) of the Arbitration and Conciliation Act, 1996?
Legal Category Hierarchy
Table of Contents
2. Appellant contended the application was barred by Order 23 Rule 1 of the Code as the claimant abandoned prior proceedings; respondent argued it was not res judicata. (Para 12 , 13 )
3. The court observed that withdrawing or abandoning an arbitration proceeding without leave of the court precludes a fresh application on the same cause of action. (Para 15 , 16 , 17 , 18 , 19 )
4. Principles of Order 23 Rule 1 of the Code, prohibiting fresh proceedings on the same cause of action without leave, apply to applications under Section 11(6) of the Act. (Para 15 , 19 )
5. The appeal is allowed, and the High Court order appointing an arbitrator is set aside due to the non-maintainability of the subsequent application. (Para 20 )
6. Do the principles of Order 23 Rule 1 of the Code apply to applications filed under Section 11 of the Arbitration and Conciliation Act, 1996?
Yes, the principles of Order 23 Rule 1 of the Code, which restrict the filing of fresh proceedings after abandonment or withdrawal without leave of the court, are applicable to applications under Section 11(6) of the Act as a matter of public policy. (Para 12 , 15 , 19 )
7. When can abandonment of arbitration proceedings be inferred against a claimant?
Abandonment can be inferred when the established conduct of the claimant clearly evidences that they have given up the claim, such as by explicitly refusing to participate in the proceedings or ignoring directives to pursue claims. (Para 7 , 8 , 16 , 17 )
8. Does a decision by an appellate court regarding a third-party matter constitute a fresh cause of action for arbitration between parties?
No, a decision by an appellate court regarding a separate or third-party dispute does not generate a new cause of action or revive the right to initiate a fresh arbitration proceeding if the underlying dispute between the parties remains the same. (Para 9 , 10 , 18 , 19 )
JUDGMENT
ALOK ARADHE, J.
1. Leave granted.
2. This appeal arises from the order dated 08.11.2024 passed by the Punjab and Haryana High Court (High Court) whereby application filed by the respondent under Section 11 of the Arbitration and Conciliation Act, 1996 (Act) was allowed and sole arbitrator was appointed. In order to appreciate the challenge laid by the appellant to the impugned order, it is necessary to set out relevant facts which are stated hereinafter.
3. The parties jointly participated in an auction conducted by Jammu & Kashmir Bank for auction of 550 marlas of land situated in Hoshiarpur, Punjab (‘the Hoshiarpur Land’). The primary bid in respect of said land was made through respondent’s firm M/s. Aastha Trading Company. A new entity, namely M/s. JMD Special Steel Pvt. Ltd., in which both the parties were directors, was utilized for funding and registration purposes. A loan of Rs. 4.30 crores was obtained from HDFC Bank by mortgaging various properties. A Tripartite Agreement dated 20.03.2013 was executed between the appellant, the respondent and HDFC Bank to regulate the loan liability and to facilitate release of the mortgaged properties.
4. On 02.04.2013, the parties executed three agreements to resolve disputes relating to ‘the Hoshiarpur Land’ and other joint ventures. The substance of the three agreements is as follows: -
(i) Agreement 1: The appellant was required to execute a sale deed in respect of 8 Kanal Land in favour of respondent on or before 05.04.2014, upon its release from HDFC Bank.
(ii) Agreement 2: The joint ventures between the parties except ‘the Hoshiarpur Land’ stood dissolved. The mortgaged properties were to be released in favour of appellant’s entity for a sum of Rs. 3.75 crores.
(iii) Agreement 3: The appellant was to hold 16.5 % shares in ‘the Hoshiarpur Land’ with a separate agreement to govern its settlement.
5. Clause 6 of the aforesaid agreements contains an arbitration clause. The respondent invoked the arbitration clause by a notice dated 06.05.2015 and subsequently filed an application under Section 11 of the Act seeking appointment of an arbitrator. The High Court, by order dated 27.11.2015, appointed Justice M.S. Sullar, as sole Arbitrator, who later recused himself. Thereafter, Justice V.K. Jhanji was appointed on 12.08.2016. Allegations of bias were raised by the respondent on 10.02.2017, leading to arbitrator’s recusal on 11.02.2017. Subsequently, Justice Aftab Alam, was appointed as sole Arbitrator, on 01.09.2017.
6. Competing claims were made before the sole Arbitrator, by both parties. On 10.02.2018, the respondent was granted a final opportunity to file his statement of claim, failing which the proceedings were liable to be closed. The respondent filed his claim on 16.03.2018, seeking recovery of Rs.4.16 crores. The appellant filed his statement of defence, followed by a rejoinder from the respondent.
7. On 13.05.2019, the respondent and his counsel failed to appear before the sole Arbitrator. Despite adjournment and a failed mediation attempt, the respondent ceased participation in the proceedings and, on 13.07.2019, sent an email to the sole Arbitrator alleging bias. Further, allegations were raised on 14.08.2019 along with an indication to appoint another arbitrator. The Arbitrator declined this request and proceeded with the arbitration. By communication dated 29.08.2019, respondent refused to accept arbitrator’s authority and stated that he would not participate further. He remained absent on 03.10.2019.
8. The respondent filed a civil suit seeking mandatory injunction seeking termination of Arbitrator’s mandate. The sole Arbitrator passed an award on 30.06.2020 observing that claims were intertwined and overlapping. The Arbitrator decreed the claim of appellant and dismissed the claim of respondent. While noting the power to terminate proceedings for non-prosecution, the Arbitrator granted a final opportunity to revive its claim by giving three months time to file an ame
