$~11 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010201402026 + ARB.P. 833/2026 & I.A. 12811/2026 JHABUA POWER LIMITED .....Petitioner Through: Mr. Vikram Singh Baid & Mr. Ajitesh Garg, Advs. (through VC). versus BALAJI MINERALS PVT LTD .....Respondent Through: Ms. Arpita Pande, Adv. (through VC). CORAM: HON'BLE MR. JUSTICE AVNEESH JHINGAN O R D E R % 21.08.2026 1. This petition is filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) for appointment of an arbitrator. 2. The brief facts are that the petitioner-Jhabua Power Limited, a joint venture of NTPC Limited floated a tender dated 21.10.2023 for ‘Coal Transportation from SECL & NCL in RCR Mode’. The respondent-M/s Balaji Minerals Pvt. Ltd. was the successful bidder. Pursuant thereto, a Letter of Intent dated 21.12.2023 was issued by the petitioner to the respondent. Disputes arose between the parties during the execution of the contract inter alia, the outstanding dues. 2.1 Arbitration was invoked at the instance of the petitioner vide notice dated 09.04.2026 under Clause 7.3 of the General Conditions of Contract This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:00:53 (for short ‘GCC’). Clause 7.3.3 of the GCC provides for appointment of the sole arbitrator by the CMD, NTPC from the list of empanelled arbitrators of NTPC. The petitioner contending that such appointment would be unilateral, approached this Court seeking appointment of an independent arbitrator. Hence, the present petition. 2.2 The relevant portion of clause 7.3.3 of the GCC is quoted below:- “7.3.3 Any dispute raised by a party to arbitration shall be adjudicated by a Sole Arbitrator appointed by CMD, NTPC from the List of empanelled Arbitrators of NTPC in the following manner: (a) A party willing to commence arbitration proceeding shall invoke Arbitration Clause by giving 60 days notice to the other party. (b) If the Arbitrator so appointed dies, resigns, becomes incapacitated or withdraws for any reason from the proceedings, it shall be lawful for CMD, NTPC to appoint another person in his place in the same manner as aforesaid. Such person shall proceed with the reference from the stage where his predecessor had left….” 3. Learned counsel for the respondent on instructions has no objection for referring the matter to arbitration. 4. The scope of the reference court under Section 11 of the Act is well defined. The existence of an arbitration clause and a prima facie dispute is to be seen and the rest of the issues are to be considered by the arbitrator. 5. The undisputed fact is that clause 7.3.3 of the GCC provides that in case of dispute between the parties the matter shall be referred for arbitration. The law is well settled that the official of a party to the dispute can neither be appointed as an arbitrator nor can appoint an arbitrator. The portion of clause 7.3.3 of the GCC providing for appointment of the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:00:53 arbitrator by the petitioner is void and does not dent the substantive agreement to arbitrate between the parties. 6. The Supreme Court in Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. and Ors., 2025 SCC OnLine SC 2578 dealt with an arbitration clause providing that no person other than a person appointed by the Managing Director or administrative head of the Nigam should act as arbitrator and if such appointment is not possible then the matter is not arbitrable. It was held that the exclusive power with the contractee to appoint arbitrator is unenforceable and should be severed but the agreement of arbitration survives. The portion of the clause that for any reason the arbitration by the arbitrator appointed by the contractee is not possible the matter shall not be referred to arbitration at all violates Section 18 of the Act. The relevant paragraphs of the judgment are reproduced below: "61. Accordingly, the portion of Clause 25 that vests exclusive appointment power in one party and forecloses arbitration in default of such appointment must be severed as void and unenforceable. However, the substantive agreement to arbitrate survives by virtue of the doctrine of severability. *** *** *** 63. The present contract, being a public-private contract, must withstand not only conventional contractual scrutiny but also constitutional scrutiny. As held in CORE Il, arbitral appointments in public contracts must satisfy the requirements of fairness, equality, and non-arbitrariness under Article 14. 64. The sub-clause in Clause 25 which provides that "if for any reason the matter shall not be referred to arbitration" is vague, uncertain, and arbitrary. The expression "for any reason" confers an unguided and absolute veto, particularly This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:00:53 objectionable in a public contract. Such a clause fails the test of manifest arbitrariness and violates Section 18 of the Act, which mandates equal treatment of parties. 65. In light of the above discussion, the following propositions emerge: (i) The parties' conduct clearly demonstrates their intention to arbitrate, satisfying the requirement of Section 7(4)(c); (ii) Clause 25, in its substantive form, constitutes a valid arbitration agreement; (iii) The unilateral and exclusionary appointment mechanism is void and severable; and (iv) This Court is empowered under Section 11(6) to cure the defect and appoint an independent arbitrator. 66. Accordingly, it is held that a valid and subsisting arbitration agreement exists between the parties. Clause 25, when read in its entirety and construed in accordance with the doctrine of severability, satisfies the statutory requirements of an arbitration clause under Section 7 of the Act. The contrary finding of the High Court is unsustainable in law and is liable to be set aside.". 7. Accordingly, the petition is allowed by appointing Mr. Laxmi Kant Gaur, District Judge (Retd.) (Mobile No.: 8800881765) as the sole arbitrator for adjudication of the disputes which have arisen between the parties. 8. The fees of the learned Arbitrator will be governed by Schedule IV of the Act. Before entering upon reference, the learned Arbitrator will comply with Section 12 of the Act. 9. It is made clear that since this Court has not expressed any opinion on the merits of the rival claims of the parties, it will be open for the parties to file their respective claims/counter claims before the learned Arbitrator which will be considered in accordance with law. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:00:53 10. A copy of this order be forwarded to the learned Arbitrator for information. AVNEESH JHINGAN, J AUGUST 21, 2026 ‘JK’ This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/08/2026 at 15:00:53