Full Judgment Text
$~46 & 58
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 21.01.2026
+ O.M.P.(I) (COMM.) 413/2025 & I.A. 24897/2025 (Seeking
exemption from filing clear copies of dim documents)
ORIENTAL FOUNDRY PRIVATE LIMITED .....Petitioner
Through: Mr. R. Sudhinder, Mr. Ashish
Mukhi, Mr. Sanidhya Sonthalia
& Mr. Kanishk Pandey, Advs.
versus
UNION OF INDIA & ORS. .....Respondents
Through: Mr. Shashank Dixit, CGSC
with Mr. Kunal Raj, Adv.
58
+ ARB.P. 150/2026 & I.A. 1707/2026 (Ex. From filing clear
copies of dim documents)
ORIENTAL FOUNDRY PRIVATE LIMITED .....Petitioner
Through: Mr. R. Sudhinder, Mr. Ashish
Mukhi, Mr. Sanidhya Sonthalia
& Mr. Kanishk Pandey, Advs.
versus
UNION OF INDIA
.....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
Signature Not Verified
O.M.P.(I) (COMM.) 413/2025 & connected matter Page 1 of 7
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
% JUDGEMENT (ORAL)
HARISH VAIDYANATHAN SHANKAR, J.
ARB.P. 150/2026
1. This is a petition filed under Section 11(6) of the Arbitration
and Conciliation Act, 1996, [“ the Act ”] seeks appointment of an
arbitrator in terms of the arbitration clause, being clause 18 under a
Contract No. 2022/RS(I)/954/151/1884, dated 10.02.2022, for
manufacture and supply of wagons. Clause 18 of the Contract reads as
under:
“18.0 Settlement of Disputes (Arbitration): The contract will be
governed by the arbitration clause with amendments as specified in
the Railway Board’s letter No. 2018/TF/Civil/Arbitration Policy
dated 12.12.2018”
2. The material on record indicates that, pursuant to disputes
having arisen between the parties, the Petitioner invoked the
arbitration clause by issuing a Notice under Section 21 of the Act
dated 01.10.2025, wherein the Petitioner also proposed the name of
Hon’ble Mr. Justice (Retd.) R.C. Chopra, Former Judge of this Court,
for appointment as the sole arbitrator.
3. Vide reply dated 18.11.2025, the Respondent acknowledged that
the Petitioner had not waived the applicability of Section 12(5) of the
Act, and furnished a panel of four retired Railway Officers for the
appointment of the nominee arbitrator.
4. In view of the Respondent having furnished a PSU-curated
panel for appointment of the nominee arbitrator, which is stated by the
Petitioner to be contrary to the principle of equal treatment of parties,
the parties have approached this Court seeking appointment of an
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
Arbitrator.
5. The law with respect to the scope and standard of judicial
scrutiny under Section 11(6) of the 1996 Act has been fairly well
settled. This Court as well in the order dated 24.04.2025 in case of
ARB.P. 145/2025 titled as Pradhaan Air Express Pvt Ltd v. Air
1
Works India Engineering Pvt Ltd has extensively dealt with the
scope of interference at the stage of Section 11. The Court held as
under:-
9. The law with respect to the scope and standard of judicial
scrutiny under Section 11(6) of the 1996 Act has been fairly well
settled. The Supreme Court in the case of SBI General Insurance
Co. Ltd. v. Krish Spinning , while considering all earlier
pronouncements including the Constitutional Bench decision of
seven judges in the case of Interplay between Arbitration
Agreements under the Arbitration & Conciliation Act, 1996 &
the Indian Stamp Act, 1899 , In re has held that scope of inquiry at
the stage of appointment of an Arbitrator is limited to the extent
of prima facie existence of the arbitration agreement and nothing
else.
10. It has unequivocally been held in paragraph no. 114 in the
case of SBI General Insurance Co. Ltd. that observations made
in Vidya Drolia v. Durga Trading Corpn . , and adopted in NTPC
Ltd. v. SPML Infra Ltd. , that the jurisdiction of the referral court
when dealing with the issue of “accord and satisfaction” under
Section 11 extends to weeding out ex-facie non-arbitrable and
frivolous disputes would not apply after the decision of Re :
Interplay . The abovenoted paragraph no. 114 in the case of SBI
General Insurance Co. Ltd. reads as under:—
“114. In view of the observations made by this Court
in In Re : Interplay (supra), it is clear that the scope of
enquiry at the stage of appointment of arbitrator is limited
to the scrutiny of prima facie existence of the arbitration
agreement, and nothing else. For this reason, we find it
difficult to hold that the observations made in Vidya
Drolia (supra) and adopted in NTPC v. SPML (supra) that
the jurisdiction of the referral court when dealing with the
issue of “accord and satisfaction” under Section 11
extends to weeding out ex-facie non-arbitrable and
1
2025 SCC OnLine Del 3022
Signature Not Verified
O.M.P.(I) (COMM.) 413/2025 & connected matter Page 3 of 7
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
frivolous disputes would continue to apply despite the
subsequent decision in In Re : Interplay (supra).”
11. Ex-facie frivolity and dishonesty are the issues, which have
been held to be within the scope of the Arbitral Tribunal which is
equally capable of deciding upon the appreciation of evidence
adduced by the parties. While considering the aforesaid
pronouncements of the Supreme Court, the Supreme Court in the
case of Goqii Technologies (P) Ltd. v. Sokrati Technologies (P)
Ltd. , however, has held that the referral Courts under Section 11
must not be misused by one party in order to force other parties to
the arbitration agreement to participate in a time-consuming and
costly arbitration process. Few instances have been delineated such
as, the adjudication of a non-existent and malafide claim through
arbitration. The Court, however, in order to balance the limited
scope of judicial interference of the referral Court with the interest
of the parties who might be constrained to participate in the
arbitration proceedings, has held that the Arbitral Tribunal
eventually may direct that the costs of the arbitration shall be borne
by the party which the Arbitral Tribunal finds to have abused the
process of law and caused unnecessary harassment to the other
parties to the arbitration.
12. It is thus seen that the Supreme Court has deferred the
adjudication of aspects relating to frivolous, non-existent
and malafide claims from the referral stage till the arbitration
proceedings eventually come to an end. The relevant extracts
of Goqii Technologies (P) Ltd. reads as under:—
“20. As observed in Krish Spg. [SBI General
Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024
INSC 532], frivolity in litigation too is an aspect which
the referral court should not decide at the stage of Section
11 as the arbitrator is equally, if not more, competent to
adjudicate the same.
21. Before we conclude, we must clarify that the
limited jurisdiction of the referral courts under Section 11
must not be misused by parties in order to force other
parties to the arbitration agreement to participate in a
time consuming and costly arbitration process. This is
possible in instances, including but not limited to, where
the claimant canvasses the adjudication of non-existent
and mala fide claims through arbitration.
22. With a view to balance the limited scope of judicial
interference of the referral courts with the interests of the
parties who might be constrained to participate in the
arbitration proceedings, the Arbitral Tribunal may direct
that the costs of the arbitration shall be borne by the party
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O.M.P.(I) (COMM.) 413/2025 & connected matter Page 4 of 7
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
which the Tribunal ultimately finds to have abused the
process of law and caused unnecessary harassment to the
other party to the arbitration. Having said that, it is
clarified that the aforesaid is not to be construed as a
determination of the merits of the matter before us, which
the Arbitral Tribunal will rightfully be equipped to
determine.”
13. In view of the aforesaid, the scope at the stage of Section 11
proceedings is akin to the eye of the needle test and is limited to
the extent of finding a prima facie existence of the arbitration
agreement and nothing beyond it. The jurisdictional contours of the
referral Court, as meticulously delineated under the 1996 Act and
further crystallised through a consistent line of authoritative
pronouncements by the Supreme Court, are unequivocally confined
to a prima facie examination of the existence of an arbitration
agreement. These boundaries are not merely procedural safeguards
but fundamental to upholding the autonomy of the arbitral process.
Any transgression beyond this limited judicial threshold would not
only contravene the legislative intent enshrined in Section 8 and
Section 11 of the 1996 Act but also risk undermining the sanctity
and efficiency of arbitration as a preferred mode of dispute
resolution. The referral Court must, therefore, exercise restraint and
refrain from venturing into the merits of the dispute or adjudicating
issues that fall squarely within the jurisdictional domain of the
arbitral tribunal. It is thus seen that the scope of enquiry at the
referral stage is conservative in nature. A similar view has also
been expressed by the Supreme Court in the case of Ajay
Madhusudan Patel v. Jyotrindra S. Patel .”
(Emphasis supplied)
6. In view of the fact that disputes have arisen inter se the parties
and there being an arbitration clause stipulated under the Agreement,
there is no impediment in appointing the sole Arbitrator.
7. Having regard to the fact that the value of the claims, as stated
by the parties, is approximately ₹60/- Crores, the disputes between the
parties are referred to arbitration.
8. Accordingly, Hon’ble Mr./Ms. Justice (Retd.) S. Ravindra
Bhat (Mob. No. +91-9818000160) , who is empanelled with the Delhi
International Arbitration Centre [“ DIAC ”], is appointed as the sole
Arbitrator.
Signature Not Verified
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
9. The arbitration would take place under the aegis of the DIAC
and would abide by its rules and regulations.
10. The learned sole Arbitrator may proceed with the arbitration
proceedings, subject to furnishing to the parties the requisite
disclosures as required under Section 12(2) of the Act.
11. The learned sole Arbitrator shall be entitled to fee in accordance
with the Fourth Schedule of the Act or as may otherwise be agreed to
between the parties and the learned sole Arbitrator.
12. The parties shall share the learned sole Arbitrator’s fee and
arbitral cost, equally.
13. All rights and contentions of the parties in relation to the
claims/counter claims are kept open, to be decided by the learned sole
Arbitrator on their merits, in accordance with law.
14. Needless to state, nothing in this order shall be construed as an
expression of opinion of this Court on the merits of the controversy.
All rights and contentions of the parties in this regard are reserved.
Let the copy of the said order be sent to the learned sole Arbitrator
through the electronic mode as well.
15. Accordingly, the present Petition, along with pending
application(s), is disposed of in the aforesaid terms.
O.M.P.(I) (COMM.) 413/2025
16. The present petition has been filed under Section 9 of the Act
seeking interim reliefs, inter alia , in the nature of directing
Respondent No. 1 to maintain status quo and not take any coercive
and precipitative action pursuant to Respondent No. 1’s letter for
Amendment VII dated 26.09.2025 till the time an arbitral tribunal is
constituted and the Petitioner is able to approach the same under
Signature Not Verified
O.M.P.(I) (COMM.) 413/2025 & connected matter Page 6 of 7
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38
Section 17 of the Act.
17. Accordingly, this petition filed under Section 9 of the Act will
be treated as application under Section 17 of the Act, which now shall
be considered by the learned Arbitrator, after entering reference, in
accordance with law.
18. Needless to say, till the time Section 17 Application is
considered by the learned Arbitrator, the interim order granted by this
Court shall continue.
19. Accordingly, the present Petition, along with pending
application(s), is disposed of in the aforesaid terms.
20. A photocopy of this Order passed today be kept in the
connected matter.
HARISH VAIDYANATHAN SHANKAR, J.
JANUARY 21, 2026/ v/kr
Signature Not Verified
O.M.P.(I) (COMM.) 413/2025 & connected matter Page 7 of 7
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:24.01.2026
11:12:38