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2026 Supreme(Online)(Del) 6487
IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
CONCEPT CAPITAL INFRA PROJECTS PVT. LTD. – Appellant
Versus
BALVINDER SINGH GURAYA HUF – Respondent
ARB.P.-2073/2025
For the Appellants/Petitioners: Cherry Gupta, Asim Naeem
For the Respondents: Balvinder Singh Guraya
Headnote:
(A) Arbitration and Conciliation Act, 1996 - Section 11 - Scope of judicial intervention - Appointment of arbitrator - The referral court under Section 11 is confined to a prima facie examination of the existence of an arbitration agreement under Section 7, and cannot delve into contested factual or legal issues such as limitation, accord and satisfaction, or the merits of the dispute, which are exclusively for the arbitral tribunal to decide under Section 16. (Paras 10-12)
(B) Arbitration - Competence-competence - The principle of competence-competence requires that matters falling within the exclusive domain of the arbitral tribunal, including mixed questions of law and fact, should not be examined even prima facie by the referral court before the tribunal has had an opportunity to rule on them. (Para 119)
Facts of the case:
The petitioner filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator for disputes arising out of a Memorandum of Understanding dated 15.03.2016 containing an arbitration clause (Clause 16). The respondent, appearing in person, raised preliminary objections that the cause of action was time-barred (arising in 2018) and that proceedings under Section 138 of the Negotiable Instruments Act had already succeeded, rendering the disputes non-existent. The respondent also submitted that the petition was intended to harass him as a senior citizen.
Findings of Court:
The High Court, relying on the authoritative pronouncement in SBI General Insurance Co. Ltd. v. Krish Spinning, held that the scope of judicial scrutiny under Section 11 is extremely circumscribed and limited to a prima facie examination of the existence of a valid arbitration agreement. The court observed that all contentions raised by the respondent—including limitation, accord and satisfaction, and prior proceedings—are matters appropriately urged before the arbitrator, who is legally empowered to adjudicate them. The court appointed a sole arbitrator and directed that all rights and contentions of the parties remain open for decision by the arbitrator.
Issues: The main issues were whether the referral court can entertain defenses such as limitation and prior settlement at the stage of appointment of an arbitrator, and whether such defenses bar the existence of an arbitration agreement.
Ratio Decidendi: The court ruled that under Section 11(6-A) of the Arbitration and Conciliation Act, 1996, the role of the referral court is facilitative and procedural—confined to giving effect to the parties' agreed dispute resolution mechanism. The court cannot embark upon a contested or laborious inquiry into factual or legal defenses, as those are within the exclusive domain of the arbitral tribunal under the competence-competence principle.
Result : Petition disposed of with appointment of sole arbitrator; all pending applications also disposed of.
JUDGEMENT (ORAL)
1. In view of Notification No. 64/G-4/Genl.-I/DHC dated 27.02.2026, the present matter which was previously listed on 03.03.2026, has been listed today.
2. The present Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a Sole Arbitrator for adjudication of disputes inter se the parties arising out of the Memorandum of Understanding dated 15.03.2016, MoU
3. Learned counsel appearing on behalf of the Petitioner would seek to rely upon Clause 16 of the MoU, which reads as under:
4. The dispute resolution Clause is stated to be Clause 16 of the MOU, which reads as follows:-
“16. That any dispute or differences between the Parties hereto relating to or arising out of this MOU shall be resolved by the parties by amicable negotiation and if no mutual settlement can be arrived at on any dispute in the interpretation of any clause of this MOU or right and/or duties of the parties to this MOU, the same shall be referred to the arbitration be a Sole Arbitrator to be appointed and nominated by "CCIPPL" in accordance with provisions of Arbitration and Conciliation Act, 1996, (1 A&C Act) and whose decision shall be final and binding on both the Parties and the place of arbitration shall be New Delhi.”
5. Learned counsel for the Petitioner submits that the statutory mandate of Notice under Section 21 of the A&C Act, stands duly complied with, vide Legal Notice dated 17.09.2025.
6. Learned counsel for the Respondent, who appears in person, raises a preliminary objection to the present Petition on the ground that since the cause of action herein is of considerable vintage, arising in the year 2018, the claims which are sought to be pressed are clearly barred by time.
7. Learned counsel for the Respondent further submits that the disputes sought to be agitated herein do not survive, inasmuch as proceedings under Section 138 of the Negotiable Instruments Act, 1881 had already been initiated, in which the Respondent has succeeded.
8. In pursuance thereof, he submits that the present Petition has been instituted merely to harass the Respondent, who is a senior citizen aged about 85 years and is constrained in his ability to travel to Delhi.
9. This Court has heard the submissions of learned counsel appearing on behalf of the Parties, and with their able assistance perused the material placed on record.
10. At this juncture, it is apposite to note that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the Act is no longer res integra.
A three-Judge Bench of the Hon’ble Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning , (3 (2024) 12 SCC 1), after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, comprehensively delineated the contours of judicial intervention at the stage of Section 11 of the Act. The excerpt of Krish Spg (supra) reads as under:-
“ (c) Judicial interference under the 1996 Act
110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators.
111. Section 11 of the 1996 Act is provided to give effect to the mutual intention of the parties to settle their disputes by arbitration in situations where the parties fail to appoint an arbitrator(s). The parameters of judicial review laid down for Section 8 differ from those prescribed for Section 11. The view taken in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya Drolia v. Durga Trading Corpn. , (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature was legislatively overruled by t
