Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Gau) 1139

THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
SANJAY KUMAR MEDHI, J.

M/s Yumiko Global Infra Tech Private Limited, represented by its Managing Director, Lishi Yapu – Petitioner
Versus
M/s PRL Gepong (JV), Mr Nabam Tagi authorized representative Son of Shri Nabam Saha – Respondent
Arb.P. No.1 of 2025
Decided On : 03-06-2026

Advocates Appeared:
For the Petitioner:K.K. Mahanta, Sr. Advocate, K.M. Mahanta, D. Dey, Advocate
For the Respondent: Jumgam Jini, Risso Aking, Bamang Tatung, Migo Laye, Gyamar Jeevan, Taying Nega, Tao Tarin, Binter Picha.

Arbitration clauses in principal agreements are not automatically incorporated into sub-contracts through general reference if the sub-contract contains its own specific dispute resolution mechanism. Incorporation must be explicit and satisfy strict criteria, as arbitration must be firmly grounded in the mutual consent of the parties.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Section 7(5) - Appointment of arbitrator - Absence of arbitration clause - Incorporation by reference. The Court held that an arbitration clause from a principal agreement is not automatically incorporated into a sub-contract where the sub-contract contains its own comprehensive dispute resolution mechanism. Mere general references to a main contract, without specific intent or clarity to incorporate the arbitration clause, do not create a binding obligation for arbitration. (Paras 17, 18, 20)

(B) Dispute Resolution - Incorporation of agreement - Intent - For the incorporation of an arbitration clause into a contract by reference, the conditions stipulated in settled legal principles must be fulfilled: a clear reference to the document containing the clause, a specific indication of intent to incorporate, and the appropriateness of the clause for the contract in question. (Para 9)

Facts of the case:
An application was filed for the appointment of an arbitrator in a dispute arising from a sub-contract. The petitioner argued that the principal agreement, which contained an arbitration clause, was incorporated into the sub-contract by reference. The respondent challenged this, asserting that the sub-contract contained an independent, specific dispute resolution mechanism that excluded arbitration.

Findings of Court:
The Court noted that the sub-contract stipulated a distinct process for resolving disputes through mutual discussion and meetings, which did not reference arbitration. It was held that arbitration requires explicit mutual consent and cannot be forced upon parties. Furthermore, the incorporation by reference failed to meet the established tripartite test for integrating an arbitration clause from a secondary document into the primary agreement.

Issues: The main issues were whether the arbitration clause in the principal agreement could be invoked for disputes arising under the sub-agreement, and whether the sub-agreement contained a valid and binding agreement to refer disputes to arbitration.

Ratio Decidendi: Where a contract contains its own specific dispute resolution mechanism, a general reference to a principal contract does not serve to incorporate its arbitration clause. Arbitration is a consensual process, and in the absence of a clear, specific agreement to refer disputes to a private tribunal, a party cannot rely on a clause found in a connected but distinct document.

Result: Petition dismissed.

JUDGMENT :

SANJAY KUMAR MEDHI, J.

The instant application has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

2. I have heard Shri K. K. Mahanta, learned Senior Counsel assisted by Shri K. M. Mahanta, learned counsel for the petitioner. I have also heard Shri J. Jini, learned counsel for the respondent.

3. Normally, the process of consideration of an application under Section 11 (6) of the Act of 1996 is more of a mechanical one, wherein the Court is required to be satisfied on certain aspects regarding the availability of an arbitration clause in the agreement and the existence of a dispute which, even after being approached by one of the parties for resolution has not been acted upon. However, in the instant case, there is stiff opposition by the respondent denying the availability of any such clause. Under such circumstances, the petition was required to be heard elaborately.

4. Shri Mahanta, learned Senior Counsel for the petitioner has submitted that there is a clause for resolution of disputes by arbitration. He has drawn the attention of this Court to the agreement executed between the parties, wherein the said clause finds place at Serial No. 5. He submits that an arbitrator can be appointed under the aforesaid agreed clause. He has also referred to the definition of "sub-contract" as contained in Clause 1(f), as per which the main contract dated 31.03.2017 was also to be treated as part and parcel of the agreement. He has submitted that it is not in dispute that in the main contract there is an arbitration clause in Clause No. 29. He has submitted that once the main contract was made part of the sub-contract, there should not be any confusion with regard to the availability of an arbitration clause for resolution of disputes. He has further submitted that after filing of the present petition, the respondent had indeed filed a money suit, in which the petitioner has apprised the Court regarding the pendency of this case, and accordingly, there is an order passed by the learned Civil Court on 22.10.2025 awaiting the outcome of the present case.

5. The learned Senior Counsel for the petitioner has submitted that the issue regarding an arbitration clause in any other connected documents, which are to be read as part and parcel of the agreement, would govern has been settled by the Hon’ble Supreme Court in the case of Hirani Developers v. Nehru Nagar Samruddhi CHS Ltd. & Anr., reported in 2026 SCC OnLine 854. He has submitted that the entire clause regarding resolution of disputes by arbitration as laid down in Clause 29, would be applicable.

6. Per contra, Shri J. Jini, learned counsel for the respondent has submitted that the present application filed under Section 11 (6) of the Act is misconceived. He has submitted that there is no arbitration clause at all in the agreement between the parties. By drawing the attention of this Court to Clause No. 5, which is with regard to resolution of dispute and termination of contract, the learned counsel for the respondent has submitted that the said clause clearly stipulates that any disputes arising out of the contract would be resolved mutually upon discussion and, if such resolution is not possible mutually, further meetings would be held by involving two persons who have been named. The learned counsel has submitted that, in the absence of any mechanism for resolution of disputes through arbitration, the present application cannot be entertained. He has highlighted that unless there is a clear stipulation in the agreement whereby the parties have agreed to have their disputes resolved through arbitration, there cannot be any forced arbitration, as the entire scheme is based on the foundation of consent between the parties.

7. Learned counsel for the respondent has also submitted that the stand of the petitioner has changed and the submissions presently made are not supported by the pleadings. By drawing the attention of t

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