Karnataka HC Sends Solar Dispute To Arbitration, Leaving Zetwerk’s ₹12.25-Crore Settlement Argument Open

In brief

The question

Whether the alleged settlement and payment meant that no arbitrable dispute survived between the parties.

The court held

The petition was allowed, and Hon’ble Mr. Justice B.A. Patil, former Judge of the High Court of Karnataka, was appointed sole arbitrator to hear the disputes at the Arbitration and Conciliation Centre (Domestic & International), Bengaluru.

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 Purchase Order/Agreement dated 11 October 2024, executed on 29 November 2024, concerning a proposed 1200 MW solar project.

¶ 2

After disputes arose, the petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act, 1996, on 3 November 2025, invoking Clause 18 of the agreement; the respondent did not respond.

¶ 3–4

The respondent argued that no dispute survived because the petitioner had paid Rs. 12,25,00,214 towards settlement, while the petitioner maintained that disputes concerning manufactured products and their destruction remained unresolved.

¶ 5–6

02Issues

i.Whether the alleged settlement and payment meant that no arbitrable dispute survived between the parties.

¶ 5, 8

ii.Whether an arbitrator should be appointed under Section 11(6) of the Act, given the arbitration clause and the petitioner’s notice invoking arbitration.

¶ 3, 9

03Law Applied

Section 11(6) of the Arbitration and Conciliation Act, 1996 provides for court intervention in the appointment of an arbitrator where the agreed appointment procedure has not resulted in an appointment. Section 21 concerns commencement of arbitral proceedings upon receipt of a request to refer a dispute to arbitration.

¶ 3

Under Clause 18(b)–(c) of the parties’ agreement, unresolved disputes were to be referred to arbitration, with a sole arbitrator appointed by mutual consent and either party permitted to apply to the competent court if the parties failed to agree within 15 days.

¶ 3

The Court applied these provisions and contractual terms; it cited no precedent.

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

Arbitration and Conciliation Act, 1996 Section 11 Section 21

04Reasoning

The Court declined to conclusively determine whether the payment settled the dispute, since the parties gave competing accounts and the petitioner identified additional disputes concerning the products and their destruction. It held that the nature and extent of any surviving disputes were matters for the arbitrator to consider in accordance with law.

¶ 8

Because the agreement contained an arbitration clause and the petitioner had invoked it by notice under Section 21, the Court found appointment of a sole arbitrator warranted.

¶ 9