After Email Reconciliation Failed, Karnataka HC Appoints Arbitrator In Contractor’s ₹1.14-Crore Work-Order Payment Dispute

In brief

The question

Whether the parties’ contractual requirement to attempt mutual resolution had been satisfied before arbitration was invoked

The court held

The Court allowed the petition and appointed retired District Judge Sri S.R. Somasekhara as sole arbitrator, to conduct the arbitration at the Arbitration and Conciliation Centre (Domestic & International), Bengaluru, under its rules.

It also directed

All claims and contentions were left open; the parties were directed to appear before the Centre’s Director on 30 November 2026 at 11:30 a.m.

01Facts

The parties entered into a Work Order dated 17 December 2021 for works at a Qualcomm data centre.

¶ 2–3

After completion of the works, KNND Associates raised a final bill and claimed an outstanding amount of ₹1,14,98,848.

¶ 2–3

The parties exchanged communications concerning the account and payment; KNND also issued a Full and Final No Claim Certificate at Woodkraft’s request, but payment was not made.

¶ 2–3

KNND invoked the arbitration clause by notice dated 28 May 2026 under Section 21 of the Arbitration and Conciliation Act, 1996.

¶ 3–4

Woodkraft did not respond, and KNND applied under Section 11(6) for appointment of an arbitrator.

¶ 3–4

Woodkraft opposed the petition, arguing that the clause first required mutual resolution and that the dispute had not been reconciled.

¶ 5

02Issues

i.Whether the parties’ contractual requirement to attempt mutual resolution had been satisfied before arbitration was invoked

¶ 5, 7

ii.Whether a sole arbitrator should be appointed under Section 11(6) of the Act to decide the parties’ disputes

¶ 4, 8

03Law Applied

Section 11(6) of the Arbitration and Conciliation Act, 1996 provides the basis for seeking court assistance in appointing an arbitrator where the agreed appointment process is not followed.

¶ 3, 8

Section 21 concerns commencement of arbitral proceedings upon receipt of a request to refer the dispute to arbitration.

¶ 3

Clause 6 of the Work Order required the parties first to attempt mutual resolution and provided that unresolved disputes would be referred to a sole arbitrator appointed by mutual consent, with arbitration seated in Bengaluru.

¶ 3, 8

Provisions in the judgment · 2 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 11 Section 21

04Reasoning

The Court found that the Work Order contained a valid arbitration clause and that a payment dispute existed between the parties.

¶ 7

It considered the email communications produced by KNND and concluded that the parties had attempted to reconcile the matter, but those efforts had failed; thus, the mutual-resolution precondition had been met.

¶ 7

KNND had also invoked the clause by issuing a Section 21 notice, and Woodkraft had not responded.

¶ 3–4

The Court therefore found appointment of a sole arbitrator warranted.

¶ 8