$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment reserved on: 09.01.2026 Judgment pronounced on: 28.01.2026 + ARB. A. (COMM.) 11/2025, I.A. 4910/2025 (Delay of 13 days in filing the appeal) & I.A. 6645/2025 (Directions)

NATIONAL SKILL DEVELOPMENT CORPORATION .....Appellant Through: Mr. Jyoti Kumar Chaudhary, Mr. Ankit Konwar, Mr. Prateek Singh and Ms. Subhashini Kumari, Advocates.

versus SURYA WIRES PRIVATE LIMITED & ORS. ….Respondents Through: Mr. Sudev Singh Juneja, Advocate for Respondent No. 2.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

JUDGMENT

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Appeal has been filed under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996, The Act, assailing the Order dated 23.10.2024, Impugned Order passed by the learned Sole Arbitrator in Case No. AC 2322/2022 before the Indian Council of Arbitration. The learned Sole Arbitrator vide the Impugned Order, allowed the Second Application filed by Respondent Nos. 2, 3, 5 and 7, under Section 16 of the Act, and allowed removal of Respondent Nos. 2, 3, 5 and 7 from the array of parties.

BRIEF FACTS:

2. The Appellant is a not-for-profit company that extends financial assistance to companies and organisations that provide skill training. Respondent No. 1, is a company engaged in the establishment and operation of training institutes. Respondent Nos. 4 and 6 are also borrower entities connected with the same project. Respondent Nos. 2, 5 and 7 are directors and/or authorised representatives of the said borrower companies, respectively.

3. In 2016 and 2017, Respondent No. 1 approached the Appellant for financial assistance to establish training institutes under the Pradhan Mantri Kaushal Vikas Yojana, 3PMKVY across multiple districts of the country.

4. The First Loan Agreement dated 20.12.2016 provided Rs. 7,17,63,197/- for setting up training institutes across 15 districts/clusters. The Appellant disbursed this amount in multiple tranches as per the agreed schedule. The agreement was executed on behalf of the borrower companies by their authorised representatives, including Respondent No. 2.

5. As part of the pre-disbursement conditions, the borrower entities executed ancillary and security documents in favour of the Appellant, including Deeds of Assignment, Deeds of Hypothecation and Irrevocable Powers of Attorney. Respondent No. 2 executed Personal Guarantees dated 27.12.2016.

6. Thereafter, vide a Second Loan Agreement dated 18.08.2017, an additional Rs. 2,13,83,194/- were provided for establishing training institutes in 4 more districts/clusters. This was likewise executed on behalf of the borrower companies, being Respondent Nos. 1, 4 and 6, by their authorised representatives, including Respondent No. 2. In connection therewith, Respondent No. 2 executed a second Personal Guarantee dated 18.08.2017.

7. Subsequently, defaults occurred in the repayment of the amounts due under the Loan Agreements, which led to the issuance of Loan Recall Notices dated 29.10.2021, under Clause 6.2 of both Loan Agreements. Respondent No. 2 was also served as a signatory to the Personal Guarantees.

8. On 21.06.2022, the Appellant initiated arbitral proceedings before the Indian Council of Arbitration and filed its Statement of Claim against Respondent Nos. 1 to 7 for recovery of the amounts claimed to be outstanding under the two Loan Agreements. Respondent Nos. 2, 3, 5 and 7 raised objections under Section 16 of the Act, contending that they were not bound by the arbitration agreements in their personal capacities.

9. By the Impugned Order, the learned Sole Arbitrator allowed the objection to the extent of deleting Respondent Nos. 2, 3, 5 and 7 from the array of parties. The present appeal under Section 37(2)(a) of the Act has been filed by the Appellant, limited to the deletion of Respondent No. 2.

CONTENTIONS OF THE APPELLANT:

10. Learned counsel for the Appellant would assail the Impugned Order to the limited extent it directs the deletion of Responde