Through: Mr. Vishesh Issar, Mr. Rahul Dhawan and Ms. Vaishali Singh, Advocates v. KHY ELECTRONICS INDIA PRIVATE LIMITED

1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, [“the Act”], seeking the appointment of an Arbitrator to adjudicate upon the disputes inter se the parties in accordance with Clause 12 of the Manufacturing Service Agreement [“Agreement”], which is stated to be shared and agreed between the parties via email dated 13.03.2023. Clause 12 of the Agreement reads as follows: “12. Dispute Resolution 12.[1] All disputes, differences or claims arising out of or in connection with this Agreement including, without limitation, any question regarding its existence, validity, construction, performance, termination or alleged violation shall be resolved by binding arbitration. The venue for such arbitration shall be Delhi and all proceedings shall be conducted in the English language. The award shall be final and conclusive on all parties to this Agreement, whether or not such parties have taken part in the arbitration, and shall be subject to forced execution in any court of competent jurisdiction.”

2. The material on record indicates that pursuant to the disputes that arose between the parties, a Notice under Section 21 of the Act dated 01.09.2025 was issued by the Petitioner. The same is annexed to the present Petition as “Document-11.”

3. This Court is cognizant of the scope of interference at the stage of a Petition under Section 11 of the Act. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the Act has been fairly well settled. A Coordinate bench of this Court, in Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd [2025 SCC OnLine Del 3022], has extensively dealt with the scope of interference at the stage of Section 11. The Court held as under:-

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.,[5] 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 time-consuming 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:—

13. In view of the aforesaid, the scope at the stage of Section 11 proceedings is akin to the eye of the needle test and is limited to the extent of finding a prima facie existence of the arbitration agreement and nothing beyond it. The jurisdictional contours of the referral Court, as meticulously delineated under the 1996 Act and further crystallised through a consistent line of authoritative pronouncements by the Supreme Court, are unequivocally confined to a prima facie examination of the existence of an arbitration agreement. These boundaries are not merely procedural safeguards but fundamental to upholding the autonomy of the arbitral process. Any transgression beyond this limited judicial threshold would not only contravene the legislative intent enshrined in Section 8 and Section 11 of the 1996 Act but also risk undermining the sanctity and efficiency of arbitration as a preferred mode of dispute resolution. The referral Court must, therefore, exercise restraint and refrain from venturing into the merits of the dispute or adjudicating issues that fall squarely within the jurisdictional domain of the arbitral tribunal. It is thus seen that the scope of enquiry at the referral stage is conservative in nature. A similar view has also been expressed by the Supreme Court in the case of Ajay Madhusudan Patel v. Jyotrindra S. Patel.”

4. Learned counsel appearing on behalf of the Respondent, on instructions, states that he has no objection to the matter being referred to arbitration.

5. Learned counsel appearing on behalf of the Petitioner submits that the approximate value of the subject matter of the disputes is Rs. 5.[5] crores.

6. Accordingly, Hon’ble Mr. Justice Vinod Goel (Retired) (email:, Mob. No. ), is appointed as the Arbitrator to adjudicate the disputes inter se the parties.