Specific Suit Withdrawal and Distinction of Causes of Action Negate Waiver of Arbitration Agreement.

The Petitioner (a vehicle manufacturer) and Respondent No. 1 (a partnership firm) entered into a Dealership Agreement on March 18, 2021.

Due to alleged performance failures and non-payment by the Respondents, the Petitioner terminated the agreement via notice on May 11, 2024.

The Petitioner invoked the Arbitration Clause (Clause 34) on August 5, 2025.

The Respondents resisted the petition for appointment of an arbitrator, alleging that the agreement was an "unexecuted draft" lacking the Petitioner’s signature, that the Petitioner forged Respondent No. 2's signature on page 4 to extend the limitation period, and that the Petitioner waived its right to arbitration by filing civil suits in Indore and Rewa.

The Respondents challenged the territorial jurisdiction of the Delhi High Court, citing an exclusive jurisdiction clause for Courts at Indore.

1. Whether the High Court of Delhi has territorial jurisdiction to entertain the petition given the conflicting "place of arbitration" and "exclusive jurisdiction" clauses.

2. Whether the Petitioner waived its right to arbitration by instituting civil suits prior to the Section 11 petition.

3. Whether allegations of forgery and lack of execution of the master agreement preclude the court from referring the matter to arbitration.

Section 11(5) and (6) regarding the appointment of arbitrators and Section 20 of the Arbitration and Conciliation Act, 1996, which recognizes party autonomy in choosing the "place" of arbitration.

Precedent in BGS SGS Soma JV v. NHPC Limited, which established that where a "venue" is designated without contrary indicia, it serves as the juridical "seat".

Bharat Aluminum Company v. Kaiser Aluminum Technical Services Inc. (BALCO), clarifying that the court at the seat has supervisory jurisdiction regardless of where the cause of action arose.

Principle that at the Section 11 stage, judicial scrutiny is limited to the prima facie existence of an arbitration agreement.

The Court determined that Clause 34.1 expressly designated Delhi as the "place of arbitration," while Clause 34.2 (conferring jurisdiction to Indore) was explicitly "Subject to Clause 34.1".

Following BALCO and BGS SGS Soma, the Court held that Delhi was the juridical seat, vesting it with supervisory jurisdiction.

Regarding the "unexecuted draft" objection, the Court noted that the Respondents had themselves counter-invoked the same arbitration clause in their reply to the Section 21 notice, thereby admitting its existence.

On the issue of forgery, the Court found the dispute pertained to page 4 (contract duration), whereas the arbitration clause on page 21 remained undisputed; thus, a prima facie agreement existed.

The Court rejected the waiver argument, noting the Indore suit was withdrawn with liberty and the Rewa suit involved distinct causes of action (injunction against interference) separate from the contractual monetary claims.

The Court found that while both parties had nominated their respective arbitrators, they failed to reach a consensus on the third presiding arbitrator; consequently, the Court appointed Justice (Retd.) Kurian Joseph as the Presiding Arbitrator.

The petition was disposed of with directions for the arbitrators to file disclosures and for fees to be governed by the Fourth Schedule of the Act.