Delhi High Court

Section 11 scrutiny is confined to prima facie existence of arbitration agreement without examining contested facts.

Oriental Foundry Private Limited v. Union of India & Anr. O.M.P.(I) (COMM.) 507/2025 & ARB.P. 354/2026

Delhi High Court2 MIN READSOURCE JUDGMENT
THE ORIGINAL LAWLENS SUMMARY
01

Facts

The Petitioner, Oriental Foundry Pvt. Ltd., entered into a contract (No. 2024/RS(l)/954/207/1940) with the Respondent, Union of India, on 01.08.2024

Source reference: p. 2

Disputes arose regarding the contract, leading the Petitioner to serve a notice under Section 21 of the Arbitration and Conciliation Act on 05.01.2026

Source reference: p. 3

The Petitioner approached the High Court seeking the appointment of a Sole Arbitrator under Section 11(6)

Source reference: p. 1-2

The Petitioner also sought interim protection under Section 9 to stay the invocation of bank guarantees totaling approximately ₹14.4 Crore

Source reference: p. 8-9

The Respondents expressed no objection to the reference of the dispute to arbitration

Source reference: p. 3
02

Issues

Whether a Sole Arbitrator should be appointed under Section 11(6) of the Act given the arbitration clause and the nature of the dispute

Source reference: p. 2, para. 1

Whether the Section 9 petition for interim relief should be adjudicated by the Court or referred to the Arbitral Tribunal under Section 17

Source reference: p. 8, para. 16
03

Law Applied

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

Source reference: p. 2, 4

It relied on the Supreme Court’s decision in *SBI General Insurance Co. Ltd. v. Krish Spinning* (2024), which established that the Referral Court must not conduct a "laborious enquiry" into contested facts like "accord and satisfaction," as these fall within the domain of the Arbitral Tribunal under the principle of competence-competence

Source reference: p. 3-7

The Court also referenced Section 17 of the Act regarding the power of an Arbitral Tribunal to grant interim measures

Source reference: p. 8
04

Reasoning

The Court observed that the parties had a valid arbitration agreement

Source reference: p. 2

Following the mandate in *Krish Spinning*, the Court limited its role to a facilitative one, ensuring the agreed dispute resolution mechanism was activated without delving into the merits of the ₹7 Crore claim

Source reference: p. 7

Since the Respondents consented to arbitration, the Court found it appropriate to appoint an independent arbitrator despite the specific procedures mentioned in Clause 2905(b) (which involved panels of retired Railway Officers), thereby upholding arbitral autonomy

Source reference: p. 3, 7

For the interim relief sought under Section 9, the Court determined that since an Arbitrator was being appointed, the application should be converted into a Section 17 application to be decided by the Tribunal, maintaining the status quo in the interim to protect the Petitioner from coercive steps regarding bank guarantees

Source reference: p. 8
05

Holding

The Court allowed the petition and appointed Mr. Shashank Garg, Senior Advocate, as the Sole Arbitrator

It directed that the Section 9 petition be treated as an application under Section 17 to be decided by the Arbitrator

Source reference: p. 8, para. 16

The interim order dated 12.12.2025 (staying coercive steps/BG invocation) was ordered to continue until the Arbitrator adjudicates the Section 17 application

Source reference: p. 8, para. 16

The petitions were disposed of with a direction for the parties to share costs and fees equally per the Fourth Schedule

Source reference: p. 7, para. 10-11
Delhi High Court

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Oriental Foundry Private Limited v. Union of India & Anr. O.M.P.(I) (COMM.) 507/2025 & ARB.P. 354/2026

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