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HIGH COURT OF DELHI
Date of Decision: 06.02.2026
M/S WOG TECHNOLOGIES LIMITED .....Petitioner
Through: Mr. Suhael Buttan, Mr. Shreyshth Ramesh Sharma, Ms. Tanishka Khatana and Ms. Drishti Rathi, Advocates.
Through: Mr. Arjun Garg, Ms. Amruta Arun Garg and Ms. Aarushi Kulshrestha, Advocates.
JUDGMENT
HARISH VAIDYANATHAN SHANKAR, J.
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.
2. The Arbitration Clause is set out at Clause 1 of the Subject Contract Agreement dated 21.07.2025, which reads as follows: “SETTLEMENT OF DISPUTES 16.[1] In the event of any dispute, controversy, claim or conflict between the Parties arising out of or relating to this Agreement (including issues relating to the performance or non-performance of the obligations set out herein or the breach, termination or invalidity thereof) (a "Dispute"), such Dispute shall be referred to a sole arbitrator, who shall be nominated with the mutual consent of the Parties. The arbitration proceedings shall be convened under the provisions of the Arbitration and Conciliation Act, 1996 and the award so granted by the sole arbitrator shall be final and binding on the Parties. 16.[2] The arbitration shall be conducted in English. The seat and place of arbitration shall be at [New Delhi and Hyderabad]. 16.[3] The courts of [New Delhi and Hyderabad] shall have exclusive jurisdiction over any Disputes arising out of this Agreement.”
3. The material on record indicates that the Notice under Section 21 of the Act dated 17.10.2025 [“Section 21 Notice”], invoking arbitration, was filed by the Petitioner. The same is annexed to the present Petition as Document „D-12‟.
4. Before adverting to the rival submissions, 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:- “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,[1] 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[2] 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.,[3] and adopted in NTPC Ltd. v. SPML Infra Ltd.,[4] 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 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.,[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:— “20. As observed in Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1: 2024 INSC 532], frivolity in litigation too is an aspect which the referral court should not decide at the stage of Section 11 as the arbitrator is equally, if not more, competent to adjudicate the same.
21. Before we conclude, we must clarify that the limited jurisdiction of the referral courts under Section 11 must not be misused by parties in order to force other parties to the arbitration agreement to participate in a time consuming and costly arbitration process. This is possible in instances, including but not limited to, where the claimant canvasses the adjudication of non-existent and mala fide claims through arbitration.
22. With a view to balance the limited scope of judicial interference of the referral courts with the interests of the parties who might be constrained to participate in the arbitration proceedings, the Arbitral Tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the process of law and caused unnecessary harassment to the other party to the arbitration. Having said that, it is clarified that the aforesaid is not to be construed as a determination of the merits of the matter before us, which the Arbitral Tribunal will rightfully be equipped to determine.”
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[6].”
5. Ms. Aarushi Kulshrestha, learned counsel for the Respondent, strenuously objects to the present petition on the ground that the same is premature. She submits that the present petition came to be filed prior to the expiry of the 15-day period as set out in the Section 21 Notice by which arbitration was invoked.
6. This Court is of the opinion that the said 15-day period as given under the Notice invoking arbitration has since expired. We are today in the month of February 2026, and since this is the only objection that has been raised on behalf of the Respondent, this Court considers it appropriate to refer the parties to arbitration by a Sole Arbitrator who will be a retired Judge of the Hon‟ble High Court.
7. The value of the dispute is submitted to be approximately Rs. 7 crores.
8. Accordingly, Hon‟ble Ms. Justice Ms. Rekha Palli, (Retired), (e-mail id: ), is appointed as the sole Arbitrator.
9. The Registry is directed to send a copy of this order to the learned Arbitrator through all permissible modes, including through email.
10. The learned sole Arbitrator may proceed with the arbitration proceedings, subject to furnishing to the parties the requisite disclosures as required under Section 12(2) of the Act.
11. The learned sole Arbitrator shall be entitled to a fee in accordance with the Fourth Schedule of the Act or as may otherwise be agreed to between the parties and the learned sole Arbitrator.
12. The parties shall share the learned sole Arbitrator‟s fee and arbitral costs equally.
13. All rights and contentions of the parties in relation to the claims/counter-claims are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law.
14. Needless to say, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the controversy between the parties.
15. Accordingly, the present Petition, along with all pending Application(s), if any, are disposed of in the aforesaid terms.
HARISH VAIDYANATHAN SHANKAR, J. FEBRUARY 06, 2026/nd/her/sg