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2026 Supreme(Online)(Del) 6446

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
Rudra Interiors Pvt. Ltd. – Appellant
Versus
Hindustan Prefab Limited – Respondent
ARB.P. 1358/2025

Advocates:
For the Appellants/Petitioners: Bipin Kr. Prabhat, Ashok Kr. Verma, Kislaya Prabhat, Rinku Kumari
For the Respondents: Pratima N. Lakra, Shailendra Kumar Mishra, Upanita Soumyadarshni, Varun Nischal, Urvi Johri, Mukesh

The court's role under Section 11 of the Arbitration and Conciliation Act is limited to a prima facie verification of the existence of an arbitration agreement. Judicial inquiry should not extend to resolving contested factual disputes, which are within the exclusive domain of the arbitral tribunal.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 11(6) and 12(2) - Appointment of Sole Arbitrator - Scope of judicial intervention - Referral court’s jurisdiction is confined to a prima facie examination of the existence of a valid arbitration agreement - Court should not undertake a laborious enquiry into factual or legal contentions, which are reserved for the arbitral tribunal. (Paras 24, 25, 31)

(B) Contract Law - Interpretation of dispute resolution clauses - Clause providing that a party “may” appeal to a committee suggests such recourse is optional and not a mandatory pre-condition to invoking arbitration - Courts will not allow parties to read into contracts onerous requirements not borne out by the express terms. (Paras 20, 21)

(C) Appointment of Arbitrator - Unilateral appointment of arbitrator - Impermissible as per settled law - Appointment to be made by the court upon satisfaction of prerequisites. (Para 26)

Facts of the case:
The petitioner approached the court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator. The respondent contested the petition, asserting that the petitioner had failed to follow the procedure prescribed in the contract, specifically failing to appeal to a committee before seeking arbitration. The petitioner maintained that the contract did not mandate this step as a condition precedent to arbitration.

Findings of Court:
The court observed that the respondent’s insistence on specific procedural steps not clearly mandated by the terms of the agreement was erroneous. The court held that the use of discretionary language in the dispute resolution clause rendered the committee appeal process optional. Furthermore, citing settled precedents, the court affirmed that the scope of its scrutiny is limited to verifying the existence of an arbitration agreement and appointing an independent arbitrator to prevent unilateral nominations.

Issues: The primary issues were whether the pre-arbitration procedural steps were mandatory and the extent of judicial scrutiny permissible under the act at the stage of arbitrator appointment.

Ratio Decidendi: The court ruled that the referral court’s scope of enquiry is limited to the prima facie existence of the arbitration agreement. Because the clause provided for an optional appeal mechanism, the petitioner’s failure to exhaust this step did not bar the appointment of an arbitrator. Contentious issues of law and fact regarding compliance should be decided by the arbitral tribunal, not the referral court.

Result: Petition allowed; Sole arbitrator appointed.

Table of Content
1. parties' correspondence and contentions regarding pre-arbitration procedures. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
2. contractual interpretation of mandatory versus optional pre-arbitral redressal steps. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23)
3. scope of section 11(6) judicial scrutiny and prohibition of unilateral arbitrator appointment. (Para 24 , 25 , 26)
4. appointment of sole arbitrator and formal disposal of the petition. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33)

JUDGEMENT (ORAL)

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition has been filed by M/S Rudra Interiors Pvt. Ltd.¹Petitioner under Section 11 of the Arbitration and Conciliation Act, 1996²A&C Act, seeking the appointment of a Sole Arbitrator to adjudicate upon the disputes inter se the parties.

2. At the outset, it is noted that vide Order dated 09.12.2025, National Disaster Response Force³NDRF/Respondent No.2 was impleaded as Respondent No. 2 to the present Petition.

3. Learned CGSC, Ms. Pratima N. Lakra, appearing for Respondent No. 2 submits that she has no objection to the disputes being referred to arbitration.

4. Learned counsel for Hindustan Prefab Limited⁴Respondent No.1 however, objects to the present Petition on the ground that the Agreement dated 19.08.2020⁵Agreement, as entered into between the parties, prescribes a specific procedure, particularly articulated under Clause 26 of the Special Conditions of Contract⁶SCC therein, non-compliance with which would disentitle reference of disputes to arbitration.

5. Learned counsels appearing on behalf of the Parties are ad idem that the Petitioner had initially approached the Project-In-charge of Respondent No.1 and communicated his grievances to him vide letter dated 21.11.2024, however the same came to be rejected by virtue of communication dated 19.12.2024.

6. Subsequent thereto, the Petitioner vide communication dated 21.12.2024 appealed against the abovesaid rejection by the Project-In charge to the CMD/ Chief Engineer of Respondent No.1⁷CMD, who replied to the said communication on 01.01.2025 by contending as follows:

“In this connection, I would like to draw your attention which respect to agreed clause no. 26 of SCC and Clause no.25 of GCC. As per clause, you have filed an appeal before CMD/Chief Engineer against project in charge, HPL letter dated 21.11.2024. In this regard, it is informed you that, appeal is without any cogent reason/ground dissatisfaction to the decisions of Project in charge in respect of your claims.

In view of above, your letter dated 21.12.2024, cannot be considered as appeal. Since no justification/reason has been given by you (M/s, Rudra Interiors Pvt. Ltd.), hence it may be appropriate for M/s Rudra Interiors Pvt. Ltd. to file a fresh appeal with all particulars in respect of each claim before the CMD for reconsideration”

(emphasis supplied)

7. As is apparent from the aforesaid Reply, Respondent No.1 took the stand that the communication dated 21.12.2024, by the Petitioner to the CMD, cannot be construed as an appeal, inasmuch as it does not set out any elaborate reasons or grounds for preferring the same.

8. It is further noted that Respondent No.1 persisted with the abovesaid stand in subsequent communications and further indicated to the Petitioner that a fresh appeal was required to be filed.

9. It is noted that, in pursuance of the foregoing, the Petitioner addressed a further communication dated 14.02.2025 to the CMD seeking an opportunity to meet and explain the various issues and grievances; however, Respondent No.1, vide letter dated 12.03.2026, maintained its stand that the earlier communication did not constitute an appeal and that a fresh appeal was required to be filed.

10. In view of the above-said, the Petitioner, being left with no alternative, issued a Notice dated 10.04.2025⁸Notice as per Section 21 of the A&C Act, invoking arbitration.

11. However, Respondent No. 1, in its reply dated 03.05.2025

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2026 Supreme(Online)(Del) 6446

IN THE HIGH COURT OF DELHI AT NEW DELHIHarish Vaidyanathan Shankar, JRudra Interiors Pvt. Ltd. – AppellantVersusHindustan Prefab Limited – RespondentARB.P. 1358/2025

Cases Referred (5)

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
Rudra Interiors Pvt. Ltd. – Appellant
Versus
Hindustan Prefab Limited – Respondent
ARB.P. 1358/2025