1 $-20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ARB.P. 1141/2025 Date of Decision: 19.09.2025 IN THE MATTER OF: M/S DEHRADUN AUTOMOBILES PRIVATE LIMITED REGISTERED OFFICE AT:- 68-68/1, BASEMENT-1 NAJAFGARG ROAD INDUSTRIAL AREA, MOTI NAGAR, NEW DELHI-110015 ALSO AT CORPORATE OFFICE:- A-100, MAYAPURI INDUSTRIAL AREA, PHASE-II, NEW DELHI-110064 ..... PETITIONER Through: Mr.Rohit Bohra, Advocate. Versus MR. RAJIV KUMAR CHANDNA S/O MR. AMARNATH CHANDNA R/O J-20, RAJOURI GARDEN, NEW DELHI-110027 ALSO AT:- 3, TILAK NAGAR INDUSTRIAL AREA, NEW DELHI-110018 .... RESPONDENT Through: Ms.Simran Makhija, Advocate. HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV JUDGEMENT PURUSHAINDRA KUMAR KAURAV, J. (ORAL) The present petition has been filed under Section 11(6) of the 2 Arbitration and Conciliation Act, 1996 (the Act) by the petitioner, seeking appointment of an Arbitrator, to adjudicate upon the disputes that have arisen between the parties under the Lease Deed dated 09.11.2017 (the lease deed). 2. The facts of the case would indicate that the petitioner had entered into the aforesaid lease deed vide which it had leased property bearing no. 3, ground floor, situated at Tilak Nagar Industrial Area, New Delhi admeasuring 6100 sq ft (the leased premises). The petitioner claims to have invested a suignificant amount of money in the leased premses pursuant to the aforesaid lease deed, and alleges that due to reasons attributable to the respondent, the leased premises were sealed by the South Delhi Municipal Corporation on 19.01.2018. The petitioner claims that this constitutes a breach of the terms of the aforesaid lease deed, and therefore, seeks appointment of an arbitreator to resolve the dispute. 3. The Court takes note of Clause 25 of the lease deed which reads as under:- ―25. ARBITRATION AND GOVERNING LAW All disputes and differences between the parties hereto regarding the interpretation scope or effort of any of the terms and conditions herein contained or in any way touching or concerning these presents shall be referred to a sole arbitrator appointed jointly by Lessee and Lessor and the same shall be deemed to be a reference within the meaning of the Arbitration and Conciliation Act, 1996 or any other statutory re- enactment or modification thereto for the time being in force. If the parties fail to agree on the arbitration within 30 days from the receipt of request by one Party from the other Party, the appointment of the sole arbitrator shall be made upon the request of a party by the court. The cost of the arbitration shall be borne by both the parties. The venue of such arbitration shall be Delhi only. The courts at Delhi only shall have 3 the jurisdiction to entertain and try all actions, suits and proceedings arising out of these presents.‖ 4. 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 W orks India Enginering Pvt Ltd 1, as well, has extensively dealt with the scope of interference at the stage of Section 11. Furthermore, this Court, recently, in Axis Finance Limited v . M r. Agam Ishwar Trimbak 2 has held that the scope of inquiry under Section 11 of the Act has been 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 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 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 1 2025 SCC OnLine Del 3022 2 2025:DHC:7477 4 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 connot power is limited to a prima facie determination. Since the Arbitration Act is a self-contained code, the requirement of ―existence‖ of an arbitration agr 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 agreement.‖ The purport of using connotes that the legislature intends that the referral Court has to inspect or scrutinize the dealings between the parties for the 5 existence of an arbitration agreement. Moreover, the expression ―examination‖ does not connote or contested inquiry. On the other hand, Section 16 provides that the arbitral tribunal can ―rule‖ on i ing the existence and validity of an arbit 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 Spinning3 wherein the Court declared Vidy 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 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 sat extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re : Interplay (supra). … 1 needle‖ and ―ex -facie meritless‖, although extent of judicial interference, yet they require the referral Court 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.‖ [E mphasis supplied] 21. Similarly, in BGM and M-RPL-JMCT (JV) v. Eastern Coalfields Ltd4 the Supreme Court succinctly explained the effect of In Re: Interplay on a Referral Court’s powers under Sectio the judgement is as under: 3 2024 SCC OnLine SC 1754 4 2025 SCC OnLine SC 1471 6 15. … (a) Section 11 confines the Court's jurisdiction to the examination regarding the existence of an arbitration agreement. (b) The use of the term ―examinati scope of the power is limited to a prima facie determination. (c) 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(6-A) should be confined to the existence of an arbitration agreement on the basis of Section 7. Such a legal approach will help the Referral Court in weeding out prima facie non-existent arbitration agreements. (d) The purport of using the word the legislature intends that the Referral Court has to inspect or scrutinise the dealings between the parties for the existence of an arbitration agreement. However, the ex does not connote or imply a laborious or contested inquiry. (e) The burden of proving the existence of arbitration agreement generally lies on the party seeking to rely on such agreement. 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 mini- trial 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. (f) Section 16 provides that the A its jurisdiction, including the existence and validity of an arbitration agreement. A ―ruling‖ disputes after admitting evidence from the parties. Therefore, when the Referral Court renders a prima facie opinion, neither the Arbitral Tribunal, nor the Court enforcing the arbitral award is bound by such a prima facie view. If a prima facie view as to the existence of an arbitration agreement is taken by the Referral Court, it still allows the Arbitral Tribunal to examine the issue in depth. [Emphasis supplied] 22. Thus from the above-mentioned authorities it 7 scope of inquiry under Section 11 of the Act has been limited to a prima facie examination of the existence of an arbitration agreement while the adjudication under Section 8 is to be made for both existence and validity. Further, the examination so undertaken under both the said provisions must be within the confines of Section 7 of the Act. Objections relating to arbitrability of disputes are not to be entertained by a referral Court acting under Section 8 or 11 o 5. Learned counsel for the respondent submits the she has no objection if the Arbitrator is appointed in the instant matter. 6. In view of the fact that disputes have arisen between the parties and there is an arbitration clause in the contract, this Court appoints Mr. Vinayak Sharma, Advocate (Mobile No. + 91 9958728654, Email- vinayaksharma.law@gmail.com) as the sole Arbitrator. 7. The arbitration would take place under the aegis of the Delhi International Arbitration Centre (DIAC) and would abide by its rules and regulations. The learned Arbitrator shall be entitled to fees as per the Schedule of Fees maintained by the DIAC. 8. The learned arbitrator is also requested to file the requisite disclosure under Section 12 (2) of the Act within a week of entering on reference. 9. The registry is directed to send a receipt of this order to the learned arbitrator through all permissible modes, including through e-mail. 10. 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. 11. Needless to say, nothing in this order shall be construed as an 8 expression of opinion of this Court on the merits of the controversy between the parties. Let the copy of the said order be sent to the Arbitrator through the electronic mode as well. 12. Accordingly, the instant petition stands disposed of. PURUSHAINDRA KUMAR KAURAV, J SEPTEMBER 19, 2025 Nc/mj