V.K VARGHESE vs ANTA BUILDERS AND DEVELOPERS PVT LTD
- Court
- Kerala High Court
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR. SOUMEN SEN
RD
TUESDAY, THE 3 DAY OF NOVEMBER 2026 / 12TH KARTHIKA, 1948
AR NO. 293 OF 2026
PETITIONER/S:
V.K VARGHESE, AGED 77 YEARS
S/O DR. V K KURIAKOSE, VYSIAMPARAMBIL, VYTILLA P
O, POONITHARA VILLAGE, KANAYANNOOR TALUK,
ERNAKULAM, PIN - 682019
BY ADVS.
SHRI.SANTHOSH MATHEW (SR.)
SRI.ARUN THOMAS
SMT.VEENA RAVEENDRAN
SRI.ANIL SEBASTIAN PULICKEL
SHRI.SHINTO MATHEW ABRAHAM
SHRI.MATHEW NEVIN THOMAS
SMT.LEAH RACHEL NINAN
SHRI.KURIAN ANTONY MATHEW
SMT.APARNNA S.
SHRI.NOEL NINAN NINAN
SHRI.ADEEN NAZAR
SHRI.ROHAN MATHEW
SHRI.CHERIYIL SANIL JOHN
SHRI.KARTHIK RAJAGOPAL
RESPONDENT/S:
1 ANTA BUILDERS AND DEVELOPERS PVT LTD
VANDANATHIL HOUSE, MANGATTOOR, KOLENCHERY P.O,
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ERNAKULAM , COCHIN, KERALA, INDIA REPRESENTED BY
ITS MANAGING DIRECTOR, PIN - 682311
2 MIDHUN KURUVILA KURIEN
S/O V. K. KURUVILA VANDANATHIL (KANNIKARA
PUTHENPURAYIL) HOUSE, MANGATTOOR KARA, KOLENCHERY
POST, AIKKARANAD NORTH VILLAGE, KUNNATHUNADU
TALUK, ERNAKULAM, KERALA, PIN - 682311
3 ALLY KURUVILLA
VANDANATHIL (KANNIKARA PUTHENPURAYIL) HOUSE,
MANGATTOOR KARA, KOLENCHERY POST, AIKKARANAD
NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM,
KERALA, PIN - 682311
4 VANDANATHIL KURIAN KURUVILLA
VANDANATHIL (KANNIKARA PUTHENPURAYIL) HOUSE,
MANGATTOOR KARA, KOLENCHERY POST, AIKKARANAD
NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM,
KERALA, PIN - 682311
5 ABRAHAM KURUVILLA
VANDANATHIL (KANNIKARA PUTHENPURAYIL) HOUSE,
MANGATTOOR KARA, KOLENCHERY POST, AIKKARANAD
NORTH VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM,
KERALA, PIN - 682311
BY ADVS.
SRI.VISHAK.K.JOHNSON
SMT.MARILIN ROMEO
SMT.PARVATHY S.
THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION
ON 03.11.2026, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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O R D E R
rd
Dated this the 3 day of November 2026
2. This is an application for appointment of an
arbitrator.
th
The dispute arises out of an agreement dated 20
August 2016. The petitioner contends that the respondents
have failed to fulfil their obligations under the Joint Venture
Agreement (JVA), thereby causing loss and damage to the
petitioner. Accordingly, the petitioner invoked the dispute
resolution mechanism provided under Clause 12 of the said
agreement. The petitioner had issued notice under Section 21
of the Arbitration and Conciliation Act, 1996, (in short, ‘1996
th
Act’) dated 20 January 2026 through registered post and
email invoking clause of the said agreement and nominated a
Senior Advocate as the petitioner’s preferred arbitrator and
called upon the respondents to nominate their arbitrator
within 30 days of receipt of the said notice. The respondents
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in spite of service of such notice did not reply and nor did
they nominate an arbitrator within 30 days. As such they did
not concur to the constitution of the Tribunal in terms of
Clause 12.2. Consequently the agreed appointment procedure
has failed and the petitioner has now become entitled to
invoke the jurisdiction under Section 11(6) of the 1996 Act.
3. Mr Santosh Mathew, the learned senior counsel
appearing on behalf of the petitioner has submitted that there
cannot be any dispute that Clause 12 is the arbitration
clause. The parties have not disputed the execution of the
said agreement. In view of the fact that the contractual
appointment procedure has failed after the respondents’
omission to act on the notice invoking arbitration, it is just
and proper to appoint an arbitrator in exercise of power
under Section 11(6) of the 1996 Act.
4. The learned Senior Counsel has also submitted
that, prior to the application for appointment of an arbitrator,
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an application under Section 9 of the 1996 Act was filed, and
during the pendency of the said proceeding before the High
Court, an attempt was made to settle the dispute amicably.
th
However, mediation had failed on 11 March 2026 and the
matter is presently pending before the High Court with regard
to the interim relief claimed by the petitioner.
5. The said application is opposed by the
respondents. The respondents in its counter affidavit has
stated that Clause 12.2 of the Joint Venture Agreement is not
an arbitration clause under Section 7 of the 1996 Act. An
arbitration agreement requires an unequivocal, mandatory
obligation to refer disputes to arbitration. A clause stipulating
that a reference will occur only upon mutual consent, or if
the parties so determine is merely an enabling and
discretionary procedure, and not a binding arbitration
agreement. Without fresh mutual consent at the time the
dispute arises, Section 11 cannot be invoked. Moreover
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th
Section 21 notice was issued on 20 January 2026, nearly 7
years after the stipulated completion date. Hence the said
claim is expressly barred by limitation.
6. The learned counsel for the respondents, in
support of the submission that Clause 12.2 of the Joint
Venture Agreement cannot be considered to be an arbitration
clause, has relied upon a decision of the Honorable Supreme
1
Court in Jagdish Chander v. Ramesh Chander and Others ,
wherein, in paragraph 9, it was held that clause 16 of the
partnership deed with the wordings "the dispute shall be
referred for arbitration if the parties so determine" was held
to be not an arbitration agreement, but a provision which
enables arbitration only if the parties mutually decide after
due consideration as to whether the disputes should be
referred to arbitration or not. It is submitted that mutual
consensus not being arrived at by the parties, arbitration
clause 12.2 as invoked by the petitioner, cannot be
1 (2007) 5 SCC 719
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considered to be an arbitration agreement.
7. In response to the said argument, Mr Santosh
Mathew, the learned Senior Counsel has referred to the
decisions of the Honorable Supreme Court in Tarun
2
Dhameja & Another v. Sunil Dhameja and Another and
Shubham Equipment Private Limited and Another v.
3
Rothwell Water Company Limited and Others , and
submitted that in Tarun Dhameja (supra), the arbitration
clause in the deed of partnership where it was stated that
arbitration shall be optional and the arbitrator will be
appointed by partners with their mutual consent, was held to
be an arbitration clause. In Clause 9 of the Memorandum of
Undersanding (MoU), it was inter alia stated that the parties
shall endeavour to settle such disputes and differences
amicably, failing which, the disputes and differences shall be
settled in accordance with the provisions of the 1996 Act, was
2 2024INSC 973
3 2026 SCC Online SC 2089
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held to be a valid arbitration agreement. In both the cases,
the Hon’ble Supreme Court has emphasized that merely
because the dispute resolution clause requires and
contemplates an amicable settlement, failing which, it would
not be a bar to refer to the parties to arbitration once the
intention of the parties to have the dispute resolved through
the mechanism of arbitration is clear and the procedure for
such appointment in the agreement is clearly visible and
discernible.
8. In order to appreciate the said argument, it is
necessary to refer to Clause 12.2 of the Joint Venture
Agreement, which admittedly contains an arbitration clause:
“12.2. All disputes and differences arising
between the parties hereto with regards to interpretation
or effect this agreement or with regard to the rights and
obligations of the parties hereto or under this agreement
shall, upon mutual consent of parties, be referred to the
arbitration under Indian Arbitration Act and Conciliation
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Act 1996 or any amendments or reenactments thereof
and the venue of arbitration shall be at Cochin. The party
raising the dispute shall serve a notice upon the other
party advising that a dispute or difference has arisen and
nominate in that notice its own arbitrator. The party
receiving the notice, shall, within 30 days after receiving
such notice, nominate its arbitrator by advising the party
raising the dispute and name of the arbitrator appointed
by the other party. The arbitrators so appointed shall
nominate the third arbitrator. The award of the
arbitrators, shall be final, conclusive and binding upon
the parties thereto.”
(emphasis supplied)
9. The said clause can be divided into two parts. The
first part contemplates a mutual consent of parties for a
reference of the disputes to arbitration and the second part
contemplates the procedure to be adopted for the
appointment of an arbitrator by each of the parties. The
second part is not independent of the first part, as from a
plain reading of the said clause, it would be clear that for a
reference to be made to arbitration, there shall be a mutual
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consent for arbitration by the parties. In other words, once
the parties have agreed to the dispute resolution by an
arbitration on mutual consent, then, each of the parties will
be required to nominate its arbitrator as laid down in the
latter part of the said arbitration clause. Admittedly, there
has been no mutual consensus between the parties to
arbitration. In Jagadish Chander (supra), the Honorable
Supreme Court considered Clause 16 of the partnership
deed, which reads as follows:
“16) If during the continuance of the partnership or at
any time afterwards any dispute touching the
partnership arises between the partners, the same shall
be mutually decided by the partners or shall be referred
for arbitration if the parties so determine.”
(emphasis supplied)
10. This clause and more particularly the word
‘determine’ was interpreted as an enabling provision for
arbitration only if the parties mutually decide after due
consideration as to whether the dispute should be referred to
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arbitration or not. This is clear from paragraph 9 of the
Jagdish Chander (supra), which reads as under:
“9. Para 16 of the Partnership deed provides that if there
is any dispute touching the partnership arising between
the partners, the same shall be mutually decided by the
parties or shall be referred to arbitration if the parties so
determine. If the clause had merely said that in the event
of disputes arising between the parties, they "shall be
referred to arbitration", it would have been an arbitration
agreement. But the use of the words "shall be referred for
arbitration if the parties so determine" completely
changes the complexion of the provision. The expression
"determine" indicates that the parties are required to
reach a decision by application of mind. Therefore, when
clause 16 uses the words "the dispute shall be referred
for arbitration if the parties so determine", it means that
it is not an arbitration agreement but a provision which
enables arbitration only if the parties mutually decide
after due consideration as to whether the disputes should
be referred to arbitration or not. In effect, the clause
requires the consent of parties before the disputes can be
referred to arbitration. The main attribute of an
arbitration agreement, namely, consensus ad idem to
refer the disputes to arbitration is missing in clause 16
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relating to settlement of disputes. Therefore it is not an
arbitration agreement, as defined under S.7 of the Act. In
the absence of an arbitration agreement, the question of
exercising power under S.11 of the Act to appoint an
Arbitrator does not arise.”
(emphasis supplied)
11. Similarly in Tarun Dhameja (supra), Clause 23 of
the partnership deed is the arbitration clause which reads as
under:
“23. Arbitration
That if at any time either during the continuance of the
partnership or after the retirement of any partner, any
dispute or difference shall arise between the partners or
their respective heirs or any one claiming through or
under them, the same shall be referred to arbitration.
Arbitration shall be optional & the arbitrator will be
appointed by partners with their mutual consent. In any
case of dispute arise then the Jurisdiction of Indore Civil
Court shall be applicable & acceptable by the partners.”
(emphasis supplied)
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12. It would be clear from the said clause that the
partners have agreed to the resolution of their disputes and
differences through the mechanism of arbitration. It was
thereafter only, it was stated that arbitration shall be optional
and the arbitrator will be appointed by partners with their
mutual consent. The first limb of the said clause clearly
reflects a clear intention of the parties to have their disputes
decided by an arbitrator. The Honorable Supreme Court
interpreted the said clause in the manner following:
“The first portion of the arbitration clause is clear and
states that, at any time during the continuance of the
partnership or after the retirement of any partner, if any
dispute or difference arises between the partners or their
respective heirs or anyone claiming from them, the same
shall be referred to arbitration. Therefore, the legal
representatives or anyone claiming through a partner is
entitled to invoke the arbitration clause. In the present
case, the legal representative of the deceased partner,
Yeshwant Boolani, invoked the arbitration clause.
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Reliance placed on the second portion of the arbitration
clause, which states that if any dispute arises, the
arbitration shall be optional and the Arbitrator will be
appointed by the partners with their mutual consent, is
not to be read in isolation but in the context of the earlier
portion of the arbitration clause. This means that the
arbitration clause can be invoked by an aggrieved party
who wants to take recourse to arbitration. To this extent
there is mutual agreement. Thereupon, the arbitrator can
be appointed by mutual consent of all parties. This does
not obliterate or write off the arbitration clause. In terms
of the Arbitration and Conciliation Act, 1996, where
parties cannot agree upon a common name as to who will
act as an arbitrator, the court can appoint the arbitral
tribunal. The arbitration clauses have to be read in a
pragmatic manner. The intent of the parties while
executing the arbitration clause in the Partnership Deed
is clear.
(emphasis supplied)
13. The decision in Jagdish Chander (supra) was also
considered and it was held that the said case is entirely
different and the arbitration clause relied upon was
differently worded. In Shubham Equipment Private Limited
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(supra), Clause 9 of the MoU reads as under:
8. Clause 9 of the said MoU provided for dispute
resolution via arbitration, as follows:
“9.0 DISPUTE RESOLUTION
9.1 In case of any dispute or difference arising between
the parties as to the interpretation or effect of this
Agreement and/or the rights and liabilities of the Parties,
thereunder, and the Parties thereunder, the Parties shall
endeavour to settle such disputes/differences amicably,
failing which the dispute/difference shall be settled in
accordance with the provisions of the Arbitration and
Conciliation Act, 1996 of any statutory re-enactments or
modification thereof. Sole arbitrator to be appointed with
mutual consent of both the Parties. The seat and venue
of Arbitration shall be Mumbai. The language of the
Arbitration shall be English. The Award passed by the
Arbitrator shall be final and binding upon the parties
herein.”
14. It can be seen from the said decision that the
parties did not dispute the existence of the arbitration
agreements, namely, the JVA and MoU in respect whereof the
disputes have arisen. The Honorable Supreme Court noticed
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Section 11(6-A) of the 1996 Act and held as under:
19. Section 11(6-A) of the 1996 Act prescribes the
principle of minimal judicial intervention by restricting
the scope of inquiry to prima facie existence of the
arbitration agreement. Once the prima facie existence of
an arbitration agreement is adduced before the Referral
Court, it ought to appoint an arbitrator and refer the
parties to arbitration.
20. Admittedly, the existence of the agreements is not in
dispute. What is contended is that the JVA and MoU
spring from the mother agreement, namely License
Agreement, and have no independent existence. As such,
the dispute resolution clause, namely Clause 12.1 of the
mother agreement, envisaging arbitration in Korea would
override the dispute resolution clauses in the subsidiary
agreements.
(emphasis supplied)
15. In view of the fat that there was no dispute with
regard to the existence of the arbitration agreements, the
matter was referred to arbitrator. Moreover, having regard to
the fact that the disputes and differences were not amicably
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settled and the parties have clearly intended to have their
disputes referred to arbitration, in case of failure to arrive at
any amicable settlement, the dispute was referred to
arbitration.
16. In this regard, reference can be made to a
decision of the Honorable Supreme Court in Nagreeka Indcon
4
Products Pvt. Ltd v. Cargocare Logistics (India) Pvt. Ltd ,
wherein, Clause 25 of bill of lading which contains an
arbitration clause, was held to be not an arbitration clause in
view of the word "can" used in the said arbitration. For proper
understanding the said clause is reproduced below:
“25. Arbitration:
The contract evaluated hereby or contained herein
shall be governed by and construed according to Indian
Laws. Any difference of opinion or dispute thereunder
can be settled by arbitration in India or a place mutually
agreed with each party appointing an arbitrator.”
4 2026 INSC 384
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17. In Nagreeka Indcon Products (supra), the
Honorable Supreme Court considered amongst others,
Jagdish Chander (supra) and Cox & Kings Ltd. v. SAP India
5
(P) Ltd, and has held that the said clause is not an
arbitration clause. In fact, the concurring opinion of the
Honorable Justice P.S Narasimha in Cox & Kings Ltd (supra)
that captures the essence of an arbitral proceedings - “ The
parties must mutually intend to refer their differences to
arbitration as consent is the source of the Arbitral Tribunal's
jurisdiction over them” has been reiterated and followed.
(emphasis supplied)
18. The Honorable Supreme Court thereafter in
paragraph 6 has observed as follows:
6…...In other words, Alternate Dispute Resolution
mechanisms or more particularly, arbitration, which is
relevant in this case, can only be the chosen method if
both/all parties to the dispute can agree that it will be so.
This freedom is not only in so far as choosing the
5 (2024) 4 SCC 1
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medium, but it also encompasses choice of forum,
applicable law and to some extent even procedural
norms. This enables parties to have their dispute decided
by keeping in view their own structures and realities.
19. On the scope of the interpretation of the
contractual terms, in paragraph 11, it has been observed as
follows:
11. In light of the above discussion, it is also to be noted
that principles of contractual interpretation are now well
settled. The words chosen by the parties are the most
reliable manifestation of the intent. The meaning of the
words used in contract is not found in strict etymological
propriety or popular usage of word(s) as in the subject,
occasion or context in which they are used, within the
contractual realm. The latin maxim ‘Ex praecedentibus et
consequentibus optima fit interpretatio’ signifies this
statement. [See: Union of India v. Raman Iron
Foundry20; Provash Chandra Dalui v. Biswanath
Banerjee] The written word is, therefore, the foundation
of legal obligation. To disregard or to impute an obligation
or meaning which was not intended would compromise
party autonomy.
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20. The Honorable Supreme Court considered as to
whether Clause 25 actually constitutes an arbitration clause
and in deciding it has relied upon, the observation of the
Honorable Justice Sujatha Manohar in K.K. Modi v. K.N.
6
Modi that spells out the requirement of such a clause in the
following terms:
“17. Among the attributes which must be present for an
agreement to be considered as an arbitration agreement
are:
(1) The arbitration agreement must contemplate that the
decision of the tribunal will be binding on the parties to
the agreement,
(2) that the jurisdiction of the tribunal to decide the
rights of parties must derive either from the consent of
the parties or from an order of the court or from a
statute, the terms of which make it clear that the process
is to be an arbitration,
(3) the agreement must contemplate that substantive
rights of parties will be determined by the agreed
tribunal,
6 1998 (3) SCC 573
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(4) that the tribunal will determine the rights of the
parties in an impartial and judicial manner with the
tribunal owing an equal obligation of fairness towards
both sides,
(5) that the agreement of the parties to refer their
disputes to the decision of the tribunal must be intended
to be enforceable in law and lastly,
(6) the agreement must contemplate that the tribunal will
make a decision upon a dispute which is already
formulated at the time when a reference is made to the
tribunal.”
21. The observation of Justice Raveendran in
Jagdish Chander (supra) was also reiterated and followed in
paragraphs 12 and 13 and it was held as under:
12…..In Jagdish Chander (supra), recently followed in
BGM and M-RPL-JMCT(JV) (supra) the Court set out
what constitutes an arbitration agreement. Raveendran
J., writing for the Court, held that the words used in the
agreement should disclose a determination and obligation
to go for arbitration and not only provide for the
possibility of going to arbitration. When the word
provides only a possibility, the same does not constitute a
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valid arbitration agreement.
13. Turning to the words used in Clause 25, we find it to
stipulate to the effect that if there is any dispute between
the parties, they can settle the same by arbitration. In
view of Jagdish Chander (supra) which holds as under:
“(iv) But mere use of the word “arbitration”
or “arbitrator” in a clause will not make it an
arbitration agreement, if it requires or
contemplates a further or fresh consent of
the parties for reference to arbitration. For
example, use of words such as “parties can,
if they so desire, refer their disputes to
arbitration” or “in the event of any dispute,
the parties may also agree to refer the same
to arbitration” or “if any disputes arise
between the parties, they should consider
settlement by arbitration” in a clause relating
to settlement of disputes, indicate that the
clause is not intended to be an arbitration
agreement. Similarly, a clause which states
that “if the parties so decide, the disputes
shall be referred to arbitration” or “any
disputes between parties, if they so agree,
shall be referred to arbitration” is not an
arbitration agreement. Such clauses merely
indicate a desire or hope to have the disputes
settled by arbitration, or a tentative
arrangement to explore arbitration as a mode
of settlement if and when a dispute arises.
Such clauses require the parties to arrive at
a further agreement to go to arbitration, as
and when the disputes arise. Any agreement
or clause in an agreement requiring or
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contemplating a further consent or
consensus before a reference to arbitration,
is not an arbitration agreement, but an
agreement to enter into an arbitration
agreement in future.”
The clause subject matter of dispute in this appeal
indicates merely the future possibility of referring
disputes to arbitration and as such, it cannot be said to
be a binding arbitration agreement. In other words, the
possibility of arbitration being used to settle disputes is
open however, for the disputes to be settled by
arbitration, further agreement between the parties would
be required and needless to add, such an agreement can
only come into existence when both parties agree to the
same. In that view of the matter, we are of the considered
view that this appeal is bereft of merit. It is accordingly
dismissed.”
22. Even for the court to arrive at a prima faci
determination of the existence of the arbitration clause at the
stage of considering the application for appointment of an
arbitrator, the court cannot disregard the words and
expressions used in the dispute resolution clause, as sine
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qua non for invoking jurisdiction under Section 11 of the
1996 Act would be the existence of an arbitration clause.
In view of the fact that there is no arbitration
agreement between the parties which can be enforced at this
stage, the application fails and the same is dismissed.
However, there shall be no order as to costs.
Sd/-
SOUMEN SEN
CHIEF JUSTICE
ds/uu