Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 06.02.2026
+ ARB.P. 1959/2025
M/S WOG TECHNOLOGIES LIMITED .....Petitioner
Through: Mr. Suhael Buttan, Mr.
Shreyshth Ramesh Sharma, Ms.
Tanishka Khatana and Ms.
Drishti Rathi, Advocates.
versus
M/S GAJA ENGINEERING PRIVATE LIMITED
.....Respondent
Through: Mr. Arjun Garg, Ms. Amruta
Arun Garg and Ms. Aarushi
Kulshrestha, Advocates.
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
% JUDGEMENT (ORAL)
1. The present petition has been filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, [“ the Act ”], seeking the
appointment of an Arbitrator to adjudicate upon the disputes inter se
the parties.
2. The Arbitration Clause is set out at Clause 1 of the Subject
Contract Agreement dated 21.07.2025, which reads as follows:
“ SETTLEMENT OF DISPUTES
16.1 In the event of any dispute, controversy, claim or conflict
between the Parties arising out of or relating to this Agreement
(including issues relating to the performance or non-performance
of the obligations set out herein or the breach, termination or
invalidity thereof) (a " Dispute "), such Dispute shall be referred to
a sole arbitrator, who shall be nominated with the mutual consent
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25
of the Parties. The arbitration proceedings shall be convened under
the provisions of the Arbitration and Conciliation Act, 1996 and
the award so granted by the sole arbitrator shall be final and
binding on the Parties.
16.2 The arbitration shall be conducted in English. The seat and
place of arbitration shall be at [ New Delhi and Hyderabad ].
16.3 The courts of [ New Delhi and Hyderabad ] shall have
exclusive jurisdiction over any Disputes arising out of this
Agreement.”
3. The material on record indicates that the Notice under Section
21 of the Act dated 17.10.2025 [“ Section 21 Notice ”], invoking
arbitration, was filed by the Petitioner. The same is annexed to the
present Petition as Document „D-12.‟
4. Before adverting to the rival submissions, this Court is
cognizant of the scope of interference at the stage of a Petition under
Section 11 of the Act. The law with respect to the scope and standard
of judicial scrutiny under Section 11(6) of the Act has been fairly well
settled. A Coordinate bench of this Court, in Pradhaan Air Express
Pvt Ltd v. Air Works India Engineering Pvt Ltd [2025 SCC OnLine
Del 3022] , 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
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25
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
frivolous disputes would continue to apply despite the
subsequent decision in In Re: Interplay (supra).”
extends to weeding out ex-facie non-arbitrable and
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.
ipate 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
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25
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 SCC
OnLine SC 1754 : 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
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.”
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
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25
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 ” .
5. Ms. Aarushi Kulshrestha, learned counsel for the Respondent,
strenuously objects to the present petition on the ground that the same
is premature. She submits that the present petition came to be filed
prior to the expiry of the 15- day period as set out in the Section 21
Notice by which arbitration was invoked.
6. This Court is of the opinion that the said 15-day period as given
under the Notice invoking arbitration has since expired. We are today
in the month of February 2026, and since this is the only objection that
has been raised on behalf of the Respondent, this Court considers it
appropriate to refer the parties to arbitration by a Sole Arbitrator who
will be a retired Judge of the Hon‟ble High Court.
7. The value of the dispute is submitted to be approximately Rs. 7
crores.
8. Accordingly, Hon‟ble Ms. Justice Ms. Rekha Palli , (Retired),
(e-mail id: avrp0903@gmail.com ), is appointed as the sole Arbitrator.
9. The Registry is directed to send a copy of this order to the
learned Arbitrator through all permissible modes, including through e-
mail.
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 a fee in
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25
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 costs 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
Arbitrator on their merits, in accordance with law.
14. Needless to say, nothing in this order shall be construed as an
expression of opinion of this Court on the merits of the controversy
between the parties.
15. Accordingly, the present Petition, along with all pending
Application(s), if any, are disposed of in the aforesaid terms.
HARISH VAIDYANATHAN SHANKAR, J.
FEBRUARY 06, 2026/nd/her/sg
Signature Not Verified
ARB.P. 1959/2025 Page 6 of 6
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:10.02.2026
12:02:25