1. Application under Section 8, Arbitration Act — Dispute arising from two agreements — Alleged supersession of arbitration clause. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 )
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2026 Supreme(Del) 1232
2026 DHC 8784
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANOJ KUMAR OHRI, J.
M/s Rise Projects Private Limited - Appellant
Versus
Reena Sharma - Respondent
FAO No. 60 of 2024
Decided On : 01-10-2026
Advocates Appeared :
For the Appellant : Mr. Debesh Panta, Mr. Vinay Kumar Dubey, and Mr. Aryaman Tomar.
For the Respondent : Mr. Gaurav Kaushik and Ms. Tammana.
Advocates:
For the Appellants/Petitioners: Debesh Panta, Vinay Kumar Dubey, Aryaman Tomar
For the Respondents: Gaurav Kaushik, Tammana
For the Appellants/Petitioners: Debesh Panta, Vinay Kumar Dubey, Aryaman Tomar
For the Respondents: Gaurav Kaushik, Tammana
The scope of judicial inquiry under Section 8 of the Arbitration and Conciliation Act, 1996, is limited to a prima facie determination of the existence of a valid arbitration agreement, prohibiting 'mini-trials' or elaborate reviews of contractual disputes.
Headnote:(A) Arbitration Act - Section 8 - Scope of Inquiry - The court's role at the referral stage is limited to a prima facie determination of the existence of a valid arbitration agreement; conducting a "mini-trial" or elaborate review of contractual interplay is impermissible. (Para 17, 21, 22)
(B) Doctrine of Competence-Competence - Section 16 - The Arbitral Tribunal is the primary authority to determine its own jurisdiction and the validity of the arbitration agreement, restricting judicial interference at the referral stage. (Para 19)
(C) Judicial Intervention - Section 5 - Judicial interference in matters governed by Part I of the Arbitration Act is restricted to specific statutory provisions to ensure arbitral autonomy. (Para 16)
Issues: Whether the Trial Court erred in dismissing the Section 8 application by conducting an elaborate inquiry into the alleged supersession of the arbitration clause.
Result: Appeal allowed; parties referred to arbitration.
Legal Category Hierarchy
Table of Contents
2. Respondent argued arbitration clause superseded; appellant argued limited scope of inquiry at Section 8 stage. (Para 14 , 15 )
3. Trial Court conducted an elaborate inquiry at Section 8 stage when only prima facie existence of arbitration agreement needed. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 )
4. At Section 8 stage, judicial authority must only determine prima facie existence of arbitration agreement, not conduct a mini-trial. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 )
5. Appeal allowed; impugned order set aside; parties referred to arbitration under Section 8, Arbitration Act. (Para 24 , 25 , 26 )
6. What is the scope of inquiry at the Section 8 stage under the Arbitration and Conciliation Act, 1996?
The judicial authority must only determine whether a valid arbitration agreement exists prima facie, and should not conduct a mini-trial or elaborate review. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 )
7. Can a court at the Section 8 stage conclusively decide on the supersession of an arbitration clause by a subsequent agreement?
No, such a conclusive inquiry is not warranted at the Section 8 stage; the issue should be left to the Arbitral Tribunal under Section 16. (Para 20 , 21 , 22 , 23 )
8. What is the principle of competence-competence and how does it apply at the reference stage?
The principle empowers the Arbitral Tribunal to rule on its own jurisdiction. Courts at the referral stage should not examine jurisdictional issues best left to the tribunal. (Para 19 )
JUDGMENT :
Manoj Kumar Ohri, J.
1. The present appeal has been preferred under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter the “Arbitration Act”) challenging the order dated 15.12.2023 passed by the learned Additional District Judge-01, Shahdara District, Karkardooma Courts, in Civil Suit No. 347/2018.
Vide the impugned order, the Trial Court dismissed an application filed by the appellant under Section 8 read with Section 5 of the Arbitration Act seeking reference of the parties to arbitration.
FACTUAL MATRIX
2. The appellant is a private limited company engaged in the business of real estate development. The appellant was developing a residential group housing project under the name and style of "Rise Skybungalows" situated at Plot No. GH-02, Sector-41, Faridabad, Haryana, which had been allotted to the appellant by the Municipal Corporation of Faridabad by way of Allotment Letter dated 12.04.2013.
3. Persuaded by the advertisements published in newspapers for "Clarks Residences" located within the said project, the respondent applied vide application dated 17.04.2014 for registration and allotment of a residential studio apartment serviced by the Clarks Inn Group of Hotels.
4. Pursuant to the said application, an Allotment Letter-cum-Agreement dated 28.05.2014 (hereinafter the “Allotment Letter”) came to be executed between the parties. Under this agreement, apartment no. F-606 on the 6th Floor in Tower F, having a super area of 585 sq. ft. (corresponding built-up area of 404 sq. ft.), was allotted to the respondent for a total consideration of Rs.58,79,250/-, exclusive of taxes.
5. The Allotment Letter incorporated an arbitration clause under the heading “Applicable Laws and Jurisdiction”, which reads as follows:
“All or any dispute arising out of or touching upon or in relation to the terms of this Allotment Letter cum Agreement including the interpretation and validity thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through Arbitration. The Arbitration proceedings shall be governed by the Arbitration and Conciliation Act 1996 or any statutory amendments, modification thereof for the time being in force. The Arbitration proceedings shall be held in New Delhi by a sole Arbitrator to be appointed by the RPPL. The Allottee(s) hereby confirms that he/she/they shall have no objection to this appointment even if the person so appointed, as Arbitrator is an employee or advocate of the RPPL or is otherwise connected to the RPPL and the Allottee(s) confirms that notwithstanding such relationship/connection, the Allottee(s) shall have no doubts as to the independence or impartially of the said Arbitrator. The Courts at New Delhi shall alone have the jurisdiction in all matters arising out or/touching and/or concerning this Agreement regardless of the place of execution of this agreement.”
6. Simultaneously, on the very same day, i.e. 28.05.2014, the parties executed another agreement titled “Agreement of Monthly Investment Return Assurance” (hereinafter the “Assurance Agreement”). Under this agreement, the appellant undertook to pay an assured return of Rs.3,51,040/- per annum on the total sales value received, payable on a monthly basis after deducting tax at source, with effect from the date of receipt of the second instalment until the offer of possession.
7. The Assurance Agreement contained the following three clauses that are relevant to the present matter:
“1. That the terms of this Agreement shall where applicable or in conflict be read to supersede the terms of ALLOTMENT LETTER CUM AGREEMENT Dated 28.05.2014.”
xxx xxx xxx
“6. In case any of the Parties hereto infringes any of the terms and conditions of this Agreement, then the other Party shall be entitled to get this transaction enforced through the Court of law by Specific Performance of the Contract, at the cost and expenses of the defaulting Party.
