Extramarks Education India Pvt Ltd v. Jay Jalaram Education Trust

1. Heard learned counsel for the parties.

2. There seems to be five agreements between the petitioner and respondent nos. 2, 3, 4, 5 and 6.

3. Loan agreements appeared to have been executed on 12.12.2021, 08.01.2013, 23.05.2015, 05.12.2015 and 05.03.2016. The nature of the services that were to be rendered are almost similar.

4. During the course of the hearing, learned counsel who appears for the respondents contends that a common petition for five different agreements is not maintainable. In addition, he contends that in view of the minutes of the meeting dated 28.07.2018, the right of arbitration stands acquiescent. He further submits that, having once had a dispute arise which thereafter culminated into a settlement, the right of arbitration stood waived.

5. I have considered the aforesaid submissions and have perused the record.

6. With respect to the objection of maintainability of a common petition for the appointment of arbitrator under various agreements, the same has been settled by this Court in the case of petitioner itself vide order dated 01.09.2022 in ARB.P. 1150/2021 titled Extramarks Education India Private Limited vs. Jhunjhunu Academy & Ors. Paragraph Nos. 5 to 7 of the aforesaid decision reads as under:

7. In the instant case as well, there is a commonality amongst the five agreements. The dispute essentially relates to the sale, implementation, and installation of the Hardware, software, and multimedia system accessories for the purpose of setting up 237 Smart Learn Classes at the premises of the respondents.

8. In P.R. Shah, Shares & Stock Broker (P) Ltd. v. B.H.H. Securities (P) Ltd.1, the Supreme Court held that where a common relief is sought against parties who are jointly and severally liable, joint arbitration is legally permissible notwithstanding the existence of separate arbitration agreements. It was also held that where Party A has entered into two distinct arbitration agreements, one with Party B and another with Party C, in respect of the same subject matter or claim, and where the liability of B and C is alleged to be joint and several, Party A is entitled to initiate a composite arbitration proceeding against both B and C. The Court held that the mere fact that the arbitration agreements are not identical or arise from different contracts cannot, by itself, defeat the maintainability of a consolidated arbitration. It was reiterated by the Court that to deny such joint arbitration solely on the ground of the separateness of the agreements would result in multiplicity of proceedings, risk of conflicting awards, and manifest injustice.

9. The respective arbitration clauses in Agreements dated 12.12.2012, 08.01.2013, 05.12.2015, 23.03.2015 and 05.03.2016 are almost similar. The Arbitration Clause in agreements dated 12.12.2012 and 08.01.2013 is reproduced herein:- “If any dispute or difference of any kind whatsoever arise between the parties in connection with or arising out of this Agreement or any part thereof, such dispute or difference shall be referred to a sole Arbitrator to be appointed by mutual consent of the parties. The venue for arbitration shall be at New Delhi and the Language shall be English. The courts in New Delhi shall have jurisdiction to entertain all disputes between the parties and fees of the arbitrator shall be equally shared by both parties…”

10. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. This Court as well in the order dated 24.04.2025 in case of ARB.P. 145/2025 titled as Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd has extensively dealt with the scope of interference at the stage of Section 11. The Court held as under:- “9. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. The Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish Spinning, while considering all earlier pronouncements including the Constitutional Bench decision of seven judges in the case of Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re has held that scope of inquiry at the stage of appointment of an Arbitrator is limited to the extent of prima facie existence of the arbitration agreement and nothing else.

10. It has unequivocally been held in paragraph no.114 in the case of SBI General Insurance Co. Ltd that observations made in Vidya Drolia v. Durga Trading Corpn., and adopted in NTPC Ltd. v. SPML Infra Ltd that the jurisdiction of the referral court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out exfacie non-arbitrable and frivolous disputes would not apply after the decision of Re: Interplay. The abovenoted paragraph no.114 in the case of SBI General Insurance Co. Ltd reads as under:- “114. In view of the observations made by this Court in In Re: Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima facie existence of the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re: Interplay (supra).”

11. Ex-facie frivolity and dishonesty are the issues, which have been held to be within the scope of the Arbitral Tribunal which is equally capable of deciding upon the appreciation of evidence adduced by the parties. While considering the aforesaid pronouncements of the Supreme Court, the Supreme Court in the case of Goqii Technologies (P) Ltd. v. Sokrati Technologies (P) Ltd., however, has held that the referral Courts under Section 11 must not be misused by one party in order to force other parties to the arbitration agreement to participate in a timeconsuming and costly arbitration process. Few instances have been delineated such as, the adjudication of a non-existent and malafide claim through arbitration. The Court, however, in order to balance the limited scope of judicial interference of the referral Court with the interest of the parties who might be constrained to participate in the arbitration proceedings, has held that the Arbitral Tribunal eventually may direct that the costs of the arbitration shall be borne by the party which the Arbitral Tribunal finds to have abused the process of law and caused unnecessary harassment to the other parties to the arbitration.

12. It is thus seen that the Supreme Court has deferred the adjudication of aspects relating to frivolous, non-existent and malafide claims from the referral stage till the arbitration proceedings eventually come to an end. The relevant extracts of Goqii Technologies (P) Ltd. reads as under:-