Proactive Data Systems Pvt Ltd v. Planex Interior Design Solutions LLP

2. Learned counsel for the petitioner has placed on record the service affidavit, and, the same is extracted as under: “I, Janhavi Singh (Advocate), Enrolment no. D/1353/2023, having office at W-104, LGF, Greater Kailash-1, New Delhi-1 10048, Aged 29 Years, do hereby solemnly affirm and declare as under:

1. That I am the counsel for the Petitioner in the above captioned matter, filing the present affidavit on behalf of our client.

KUMAR KAURAV

2. That we served the copy of the petition under section 11 of the Arbitration and Conciliation Act to the respondent and the same has been duly served to the respondent through Speed Post bearing no. SU002330512IN, Courier through Blue Dart bearing no. 17513910492, and Email to: amit@planexinteriors.com through our client’s email id lokesh.kumar@amassociates.info.

3. That the notice is delivered through the courier on 04.11.2025 and through email on 11.11.2025. The copy of speed post, courier, and email dated 11.11.2025 is herewith annexed as 'Annexure-A[1] (Colly)'.‖

3. It is, thus, seen that despite service of notice of service by speed post and email, there is no appearance on behalf the respondent.

4. The facts of the case manifest that vide letter of intent dated 23.11.2022, the parties entered into an agreement dated 28.02.2023, to modernize and renovate the office of the petitioner located at GE-06 Sunrise Chambers, East Wing – 22, Ulsoor Road, Bengaluru – 560064, Karnataka.

5. As per the petitioner’s case, the respondent has failed to complete the renovation within a stipulated time period. Therefore, the petitioner issued a termination letter dated 20.04.2023 to the respondent alleging the breach of the agreement. Despite the said letter, according to the petitioner, there was no response from the respondent. It is also submitted that a demand notice was sent to the respondent for recovery of Rs. 47,54,709/- along with 18% interest per annum. Thereafter, the petitioner also issued a notice dated 11.09.2023 under Section 21 of the Act, invoking the arbitration clause contained at Sr. No. 7 of Clause D of the agreement dated 28.02.2023. Vide a reply dated 20.09.2023, the respondent refused to give its consent for invoking arbitration.

6. Hence, the petitioner has approached this Court by way of the present petition seeking appointment of the Arbitrator.

7. The arbitration clause contained at Sr. No. 7 of Clause D of the Agreement dated 22.05.2023 is extracted as under: “Sr. No. 7 of Clause D of the Agreement:- "Any dispute or differences between the Parties arising out of or under this Agreement shall be resolved, at the first instance, via mediation between the Parties. If the dispute remains unresolved via mediation, the Parties agree to refer the dispute to the Architect, who shall act as the sole Arbitrator. The arbitrator's decision shall be considered final and binding upon both parties. The procedure followed and the manner of arbitration shall align with the Arbitration and Conciliation Act, 1996 along with rules made thereunder. The place of arbitration shall be in New Delhi. ”

8. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the Act has been fairly well settled. This Court in Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd[1] has extensively dealt with the scope of interference at the stage of Section 11 reference. Furthermore, in Axis Finance Limited Vs. Mr. Agam Ishwar Trimbak,[2] this Court has held that the scope of inquiry under Section 11 of the Act is limited to a prima facie examination of the existence of an arbitration agreement. Further, it was also reiterated that the objections relating to the arbitrability of disputes are not to be entertained by a referral Court acting under Section 8 or 11 of the Act. The relevant extract of the aforesaid decision reads as under: -

19. In In Re: Interplay, the Supreme Court confined the analysis under Section 11 of the Act to the existence of an arbitration agreement and under Section 8 of the Act to the existence and validity of an arbitration agreement. Under both the provisions, examination was to be made at the touchstone of Section 7 of the Act. Further, issues pertaining to the arbitrability of the dispute fell outside the scope of both Section 11(6A) and Section 8 of the Act. The material part of the judgement of the Supreme Court in In Re: Interplay reads as under:

164. The 2015 Amendment Act has laid down different 2025 SCC OnLine Del 3022 2025:DHC:7477 parameters for judicial review under Section 8 and Section 11. Where Section 8 requires the referral Court to look into the prima facie existence of a valid arbitration agreement. Section 11 confines the Court’s jurisdiction to the examination of the existence of an arbitration agreement. Although the object and purpose behind both Sections 8 and 11 is to compel parties to abide by their contractual understanding, the scope of power of the referral Courts under the said provisions is intended to be different. The same is also evident from the fact that Section 37 of the Arbitration Act allows an appeal from the order of an arbitral tribunal refusing to refer the parties to arbitration under Section 8, but not from Section 11. Thus, the 2015 Amendment Act has legislatively overruled the dictum of Patel Engineering (supra) where it was held that Section 8 and Section 11 are complementary in nature. Accordingly, the two provisions cannot be read as laying down a similar standard. 165. The legislature confined the scope of reference under Section 11(6A) to the examination of the existence of an arbitration agreement. The use of the term ―examination‖ in itself connotes that the scope of the power is limited to a prima facie determination. Since the Arbitration Act is a self-contained code, the requirement of ―existence‖ of an arbitration agreement draws effect from Section 7 of the Arbitration Act. In Duro Felguera (supra), this Court held that the referral Courts only need to consider one aspect to determine the existence of an arbitration agreement – whether the underlying contract contains an arbitration agreement which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. Therefore, the scope of examination under Section 11(6A) should be confined to the existence of an arbitration agreement on the basis of Section 7Similarly, the validity of an arbitration agreement, in view of Section 7, should be restricted to the requirement of formal validity such as the requirement that the agreement be in writing. This interpretation also gives true effect to the doctrine of competence-competence by leaving the issue of substantive existence and validity of an arbitration agreement to be decided by arbitral tribunal under Section 16. We accordingly clarify the position of law laid down in Vidya Drolia (supra) in the context of Section 8 and Section 11 of the Arbitration Act.

166. The burden of proving the existence of arbitration agreement generally lies on the party seeking to rely on such agreement. In jurisdictions such as India, which accept the doctrine of competencecompetence, only prima facie proof of the existence of an arbitration agreement must be adduced before the referral Court. The referral Court is not the appropriate forum to conduct a minitrial by allowing the parties to adduce the evidence in regard to the existence or validity of an arbitration agreement. The determination of the existence and validity of an arbitration agreement on the basis of evidence ought to be left to the arbitral tribunal. This position of law can also be gauged from the plain language of the statute. 167. Section 11(6A) uses the expression ―examination of the existence of an arbitration agreement.‖ The purport of using the word ―examination‖ connotes that the legislature intends that the referral Court has to inspect or scrutinize the dealings between the parties for the existence of an arbitration agreement. Moreover, the expression ―examination‖ does not connote or imply a laborious or contested inquiry. On the other hand, Section 16 provides that the arbitral tribunal can ―rule‖ on its jurisdiction, including the existence and validity of an arbitration agreement. A ―ruling‖ connotes adjudication of disputes after admitting evidence from the parties. Therefore, it is evident that the referral Court is only required to examine the existence of arbitration agreements, whereas the arbitral tribunal ought to rule on its jurisdiction, including the issues pertaining to the existence and validity of an arbitration agreement. A similar view was adopted by this Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.‖ [Emphasis supplied]

20. The effect of In Re: Interplay was further explained by a Three Judge Bench of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning[3] wherein the Court declared Vidya Drolia and NTPC Ltd.’s findings qua scope of inquiry under Section 8 and Section 11 of the Act to no longer be compatible with modern principles of arbitration. The material portions of the judgement read 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). … 118. Tests like the ―eye of the needle‖ and ―ex-facie meritless‖, although try to minimise the extent of judicial interference, yet they require the referral Court 2024 SCC OnLine SC 1754 to examine contested facts and appreciate prima facie evidence (however limited the scope of enquiry may be) and thus are not in conformity with the principles of modern arbitration which place arbitral autonomy and judicial non-interference on the highest pedestal.‖ [Emphasis supplied]