Page No.# 1/8 GAHC040005402026 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) (ITANAGAR BENCH) Case No. : Arb.P./3/2026 Global Energy Private Limited through its nominee, M/s Bhumikka Shah and Associates, registered office at Pride B- 904, HRC Professional /Hub, Vaibhav Khand, Indirapuram, Ghaziabad, Uttar Pradesh 201014 VERSUS The Department of Power through its Secretary, Govt of Arunachal Pradesh, Vidyut Bhawan, Itanagar, Arunachal Pradesh 791111 Advocate for the Petitioner : Chetan Kumar Garg, Kinyak Loya Advocate for the Respondent : Lissing Perme, SC(Power) -BEFORE- HON’BLE MRS. JUSTICE SUSMITA PHUKAN KHAUND ORDER 17.06.2026 Heard Mr. K. Pal, learned Senior Counsel assisted by Mr. C. Garg, learned counsel for the petitioner-Global Energy Private Limited and Mr. L. Perme, learned Standing Counsel, Power Department represented by its Secretary to the Government of Arunachal Pradesh. Page No.# 2/8 2. The petitioner-Global Energy Private Limited has filed this application under Section 11 of the Arbitration and Conciliation Act, 1996 (for short,’1996 Act’) read with Section 151 of the Code of Civil Procedure (CPC, for short) with prayer for appointment of an Arbitrator. 3. The learned Senior Counsel Mr. Pal has drawn the attention of this Court to the Power Purchase Agreement (PPA, for short) executed between the petitioner and the respondent (at Page No.268 of the additional affidavit dated 21.04.2026) which includes an agreement clause as well as the Clause-11 relating to Resolution of disputes. It was agreed that:- In the event of any difference or dispute arising out of the application or interpretation of this agreement amongst the parties, the parties shall attempt to settle such dispute by mutual discussion within thirty (30) days after the date of written notice by disputing parting to other no-disputing party. During such mutual discussions, the parties shall faithfully continue to perform their respective obligations and responsibilities under this agreement. In the event of parties are unable to resolve any dispute within (30) days, then the parties agree to settle the same under the Arbitration & Conciliation Act 1996”. 4. The agreement was executed on 14.07.2011 and the respondent was supposed to supply to the petitioner 25 MW power for a period of 4 (four) years till 30.06.2025, which would be sold to the licensee. However, on 02.08.2011, the Chief Engineer (Power) Western Electrical Zone, Deo unilaterally and arbitrarily terminated/cancelled the PPA on the strength of a letter No. PWRS/W-1937/2009-4474-76 dated 28.07.2011 without there being any continuing default on the part of the petitioner in terms of the Page No.# 3/8 Clause-10 of the PPA (Annexure P-2). 5. On being aggrieved by the alleged unilateral and arbitrary termination, the petitioner issued letters dated 05.08.2011, 06.08.2011 and 15.09.2011 to the respondent for a solution. Subsequent thereto, the petitioner was called for a meeting on 01.02.2019 but the petitioner was unable to attend the meeting and he had informed and expressed his inability to attend the meeting. The respondent-Department then forwarded the reply to the petitioner dated 04.06.2019 directing the petitioner to pay an amount of Rs.5,72,88,000/- (Rupees Five Crores Seventy Two Lakhs and Eighty Eight Thousand) within 15 days from 04.06.2019. It is pertinent to mention that in the reply to the aforementioned letters, it has also been mentioned at Pargraph-3 that a payment of Rs.1Crore has been received by the respondent-department. It is also submitted by the petitioner that petitioner had participated in other Notice Inviting Quotations (for short, ‘NIQs’) floated by the respondents. Now, as there is already an agreement executed and as there is a dispute relating to the amount to be paid to the respondent, the petitioner has prayed for appointment of an arbitrator for resolution of their disputes as per Clause-11 of PPA. 6. The learned Standing Counsel for the Power Department Mr. L. Perme laid stress in his argument that this petition is not maintainable as the same is barred by limitation, and the PPA which has been cancelled in the year 2011, is not an existing and executable PPA. 7. The Annexure-P-2 of the petition clearly depicts that the PPA drawn up by the Department on 14.07.2011 was cancelled vide order dated Page No.# 4/8 28.07.2011 implying that the terms and conditions are not enforceable. The reasons why the PPA was cancelled were recorded and Annexure-C clearly reveals the reasons for cancellation of the PPA. It is submitted that an unauthorized person had affixed his signature on the PPA on 14.07.2011 when the incumbent was on earned leave w.e.f. 12.07.2011 and the person in-charge of his post had affixed his signature on behalf of the incumbent who was on leave. It is submitted that any PPA signed by any officer during his earned leave is invalid and legally untenable. Apart from other reasons, the pre-dominant reasons to cancel the PPA was execution of PPA by an unauthorized person. On the basis of an illegal PPA, the petitioner cannot pray for appointment of an arbitrator on the strength of an arbitration clause included in the PPA. Moreover, as the contract period is already over and the petitioner has approached this Court after 14 years, the prayer to appoint an arbitrator is liable to be rejected. It is averred by the learned counsel for the respondent that the conduct of the petitioner appears to be shady as he had participated in subsequent NIQs floated by the same Department. The cancelled PPA is not live. The cause of action arose on 02.08.2011 and the limitation under Article 137 of the Limitation Act, 1963 ends on 02.08.2014. 8. The petition under Section 11 of the Arbitration Act coupled with a non-existent and a dead agreement is not tenable for reference to arbitration. 9. It is averred that a first Arbitration notice was issued way back in the year, 2015 beyond the period of limitation, but the same was not pursued by the petitioner. A present arbitration notice marked as Annexure-P-36 Page No.# 5/8 was issued on 08.12.2025, after 14 years, and much beyond the period of limitation. It is further averred that when the petitioner did not challenge the cancellation order and participated in subsequent NIQs, he has impliedly not agitated against the cancellation of the PPA dated 02.08.2011. This has however been denied by the petitioner stating that the petitioner participated under protest 10. I have considered the submissions at the Bar with circumspection. 11. It is submitted on behalf of the petitioner that, in reply to the letters of the petitioner, the meeting was held and the petitioner could not participate in the meeting but a letter dated 04.06.2019 was forwarded to the petitioner. Thus, the cause of action does not end in the year, 2011 because correspondences to the same contract and agreement were continuing till 04.06.2019. It is true that the letter No. CEP/WEZ/COM- 27/GEL/2018-19/803-05 dated 04.06.2019 also reveals that the respondent-Department had received payment of Rs.1crore from the petitioner. The agreement executed between both the parties were indeed cancelled on 02.08.2011 justifying the reasons vide Annexure-C, dated 28.07.2011. Whether, this case cannot be referred for Arbitration on the basis of the cancelled PPA coupled with bar under the Limitation Act. 12. I find force in the submissions on behalf of the petitioner that as per Section 11 (6A) of the Act of 1996, any High Court, while considering any application under Sub-section (4) or sub-section (5) or sub-section (6), shall notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement. Page No.# 6/8 13. The learned counsel for the petitioner has relied on a decision of the Hon’ble Supreme Court in the case of Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 & the Indian Stamp Act, 1899; reported in 2024 (6) SCC 1, wherein, it has been held that:- “155.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 competence-competence, 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. “156. 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.-vs-Aksh Optifibre Ltd.”. 14. It is submitted by the learned counsel for both the parties that concept of arbitration is to reduce the burden of the Court in matters Page No.# 7/8 which can be settled through Mediation and Arbitration and not to procrastinate and delay matters in the Court. Thus, there is no ambiguity that the matter of limitation and the validity of existence of a subject tender can be decided while taking up the Arbitration and the Referral Court is not required to deal with the limitation or validity of existence of an Arbitration clause. 15. The learned counsel for the respondent has relied on a decision of the Hon’ble Supreme Court in the case of State of West Bengal and Others-vs-M/S B. B. M. Enterprises; reported in 2026 Supreme (SC) 387, wherein, it has been held that:- “6. Arbitration though is an alternate dispute resolution system, which has to be encouraged, it cannot deviate from the fundamental principle that law favours the diligent and not the indolent. Section 42 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 to arbitrations as it is applied to proceedings in Court. Hence, for recovery of amounts, as in this case, the limitation is three years as provided in Article 18 of the Limitation Act, 1963. The commencement of arbitration proceedings as per sub-section (2) of Section 43 being the date referred in Section 21, which is the date on which a request for initiation of arbitration is received by the respondent, the claim itself was hopelessly time barred, the notice having been issued after 21 years”. 16. Reverting back to the case, it is held that the learned counsel for the respondent has stated that the period of limitation runs from 02.08.2011 which has been denied by the learned counsel for the petitioner. In this case, it cannot be considered that the claim itself was hopelessly time barred or a dead claim as the notice was issued after a lapse of 21 years. The ratio laid down in the case of M/S B. B. M. Enterprises (Supra) is not applicable to the present case. Page No.# 8/8 17. In the light of the decision of the Hon’ble Supreme Court in the case of Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 (Supra), it is held that the present case is a fit case to be referred for Arbitration. Thereby, the petition under Section 11 of the Arbitration Act, 1996 is allowed. 18. In view of the foregoing discussions, this Court appoints Hon’ble Mr. Justice Iqbal Ahmed Ansari (Retired Judge) to be the Arbitrator, and the seat of the Arbitrator may be as per the convenience of the parties. 19. This Arbitration Petition accordingly stands disposed of. 20. Parties to bear their own costs JUDGE Comparing Assistant