Referral Court limited to prima facie existence of arbitration agreement; substantive party status must be decided by Arbitral Tribunal.

In brief

The question

1. Whether a non-signatory asserting status as a "successor-in-interest" via a Sale Certificate can invoke an arbitration agreement under Section 11

The court held

The Court allowed the petition and referred the disputes to a three-member Arbitral Tribunal

It also directed

It noted Respondent No. 1’s nomination of Justice (Retd.) Ajit Sinha and, since the Petitioner replaced the original JV partner, the Court nominated Justice (Retd.) K.R. Shriram on behalf of the "Constructor"

The two arbitrators were directed to appoint a Presiding Arbitrator

The Court held that all rights and contentions regarding jurisdiction and merits remain open for the Tribunal to decide

01Facts

The Petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the constitution of a three-member Arbitral Tribunal based on an EPC Agreement dated 31.03.2017

¶ 1

The original Agreement was between the Ministry of External Affairs (Respondent No. 1) and a Joint Venture ("JV") consisting of C&C Constructions Ltd ("C&C") and Engineering Projects (India) Ltd (Respondent No. 2)

¶ 4

Following insolvency proceedings, the Petitioner acquired the "interest in the joint ventures" held by C&C via a Sale Certificate dated 06.08.2024

¶ 20, 23

Respondent No. 1 opposed the petition, asserting a lack of privity, arguing that the Sale Certificate transferred only assets and not contractual rights, and claiming the arbitration clause was unworkable due to Respondent No. 2's lack of consent

¶ 3-11

02Issues

i.1. Whether a non-signatory asserting status as a "successor-in-interest" via a Sale Certificate can invoke an arbitration agreement under Section 11

¶ 15, 23

ii.2. Whether the Court, at the referral stage, should resolve complex disputes regarding privity, assignment of rights, and consent

¶ 24-25

03Law Applied

The court applied Section 11(6-A) of the Arbitration and Conciliation Act, 1996, which confines judicial scrutiny to the "existence of an arbitration agreement"

¶ 13

It relied on the competence-competence doctrine under Section 16, empowering the Arbitral Tribunal to rule on its own jurisdiction

¶ 13

The court heavily cited Andhra Pradesh Power Generation Corporation Limited (APGENCO) v. Tecpro Systems Limited (2026) and Cox & Kings Ltd. v. SAP India (P) Ltd. (2024), which establish that at the referral stage, the court only performs a prima facie determination of whether a party is a "veritable party" or "successor," leaving detailed factual and legal inquiries to the Tribunal

¶ 14, 16, 21

Provisions in the judgment · 5 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 7 Section 8 Section 11 Section 12 Section 16

04Reasoning

The Court observed that while the Respondents contested the Petitioner's locus, the Agreement specifically included "successors and permitted assigns" within the definition of the "Constructor"

¶ 18

The Sale Certificate expressly transferred C&C’s "interest in the joint ventures" to the Petitioner

¶ 20

Applying the APGENCO precedent, the Court reasoned that conducting a "mini-trial" into whether the consortium continues to exist or whether consent was necessary would violate the principle of minimal judicial intervention

¶ 24-25

The Court found that the Petitioner had established a prima facie credible claim of being a successor-in-interest

¶ 23

Consequently, substantive objections regarding the validity of the invocation and the maintainability of claims after liquidation are matters to be determined by the Arbitral Tribunal under Section 16

¶ 25