Prior invocation of an arbitration clause does not bar reference of distinct subsequent disputes.

The Petitioner was awarded a contract for the supply, installation, testing and commissioning of an air-conditioning system at UNESCO House, New Delhi. The work was completed and a completion certificate was issued on 30 December 2016.

Disputes concerning contractual dues were earlier referred to arbitration, resulting in an award dated 29 July 2020 in favour of the Petitioner. The award was not challenged and was paid by the Respondent on 27 February 2021.

At the time of payment, GST was deducted from the awarded amount. The Petitioner deposited the corresponding GST liability and sought reimbursement from the Respondent under Clause 38 of the GCC. Although the Petitioner relied on communications from 2021–2022 allegedly acknowledging the liability, the Respondent ultimately refused reimbursement by communication dated 3 January 2023.

The Petitioner invoked the arbitration clause through notice dated 24 February 2023. The Respondent proposed a panel of five arbitrators on 28 November 2023, which the Petitioner did not accept; no arbitrator was thereafter appointed.

The Petitioner consequently filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator.

Whether a fresh dispute concerning reimbursement of GST paid on the earlier arbitral award could be referred to arbitration despite the parties having previously invoked and concluded arbitration under the same contract.

Whether, at the stage of a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Court could refuse appointment of an arbitrator on the Respondent’s objections concerning splitting of causes of action, finality of the earlier award, and arbitrability.

Whether a valid arbitration agreement existed between the parties so as to warrant appointment of a sole arbitrator.

The Court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, under which the Court’s enquiry at the referral stage is primarily confined to examining the prima facie existence of an arbitration agreement.

It held that prior invocation and conclusion of arbitration do not exhaust the arbitration clause in respect of distinct disputes arising subsequently under the same contract.

The Court also relied on Clause 25 of the GCC, which contained the arbitration agreement, and Clause 38, under which the Petitioner claimed reimbursement of GST.

Issues concerning arbitrability, jurisdiction, and the effect of the earlier award could be raised before and decided by the arbitral tribunal.

The appointed arbitrator was required to furnish disclosures under Section 12(2) of the Act.

The Court found that the GST reimbursement claim arose from a subsequent refusal communicated after payment of the earlier arbitral award and constituted a distinct dispute under the contract.

The fact that the arbitration clause had previously been invoked and an award had been rendered did not, by itself, prevent a later reference concerning a separate dispute arising under the same contractual framework.

Since the existence of the arbitration agreement was undisputed, the Court held that the threshold requirement under Section 11(6) was satisfied.

The Respondent’s objections—that the claim should have been raised in the earlier arbitration, that the Petitioner had impermissibly split its cause of action, and that no arbitrable dispute survived—were left open for determination by the arbitrator, consistent with the limited scope of judicial scrutiny at the referral stage.

The arbitrator was directed to enter upon the reference within three weeks and furnish the disclosures required under Section 12(2) of the Act.

The arbitration was directed to be conducted under the rules and aegis of the Delhi International Arbitration Centre, with fees payable according to the DIAC schedule.

The parties remained free to raise all objections, including those concerning jurisdiction and arbitrability, before the arbitrator.

The petition and pending applications were accordingly disposed of.