ARB.P. 740/2026 $~15 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision : 18.05.2026 + ARB.P. 740/2026 & I.A. 11244/2026 (Seeking leave to file additional documents) MS PLATINO AUTOMOTIVE PRIVATE LIMITED .....Petitioner Through: Mr. Ayush Sharma and Mr. Ashish Sharma, Advocates. versus MS SARANYA INFRA EQUIPMENT SOLUTIONS LLP .....Respondent Through: Mr. Saket Gogia and Ms. Sheetal Maggon, Advocates. CORAM: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL) 1. The present Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 [“The Act”], seeking the appointment of a Sole Arbitrator to adjudicate the disputes inter se parties in terms of the Clause 32 of the Distributorship Agreement dated 06.12.2023 [“Agreement”]. The aforementioned clause reads as under: “32 Governing Law and Dispute Resolution 32.1. This Agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this Agreement or its promotion) is governed by and construed in accordance with the laws of the Republic of India. 32.2. If any dispute arises in relation to or in connection with this Agreement or any Transaction Document(s) including in respect of the validity, interpretation, implementation or alleged breach of any provision of this Agreement or any Transaction Document(s) (“Dispute”) between the Parties (“Disputing Parties”), the Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 Disputing Parties shall attempt to first resolve such Dispute or claim through discussions between senior executives of the Disputing Parties. 32.3. Any Dispute between the Parties, which cannot be settled by such negotiations and discussions within the aforementioned 30 (thirty) days of the Request, shall then be resolved exclusively by arbitration and any Party may refer the Dispute, for settlement by arbitration. 32.4. Within 15 (fifteen) days of the completion of the aforementioned 30 (thirty) day period, the claimant Party shall appoint 1 (one) arbitrator, the respondent party shall appoint 1 (one). arbitrator and the 2 (two) arbitrators so appointed shall appointed a third arbitrator who shall preside over the arbitral tribunal. The arbitration proceeding shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 and its rules.” 2. Learned counsel appearing on behalf of the Respondent challenges the maintainability of the present Petition on the ground that the Confidentiality and Non-Use Agreement dated 06.12.2023 neither specifies any particular place as the seat of arbitration nor designates any venue for the arbitral proceedings. 3. He further submits that the subject matter of the notice issued under Section 21 dated 21.01.2026 [“Section 21 Notice”] pertains to the alleged breach of the terms of the Confidentiality and Non-Use Agreement. It is accordingly contended that, in the absence of any fixed place having been designated under the Confidentiality and Non- Use Agreement, in respect of whose alleged violation the present reliefs are sought, the present Petition is not maintainable before this Court. 4. Learned counsel appearing on behalf of the Respondent also raises an objection to the maintainability of the present petition before this Court on the ground that no part of the cause of action or transaction has arisen within the territorial jurisdiction of Delhi. 5. Per Contra, Mr. Ayush Sharma, learned counsel appearing on Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 behalf of the Petitioner, submits that the Confidentiality and Non-Use Agreement is, in fact, an ancillary agreement which came into existence pursuant to and as a consequence of the original Distributorship Agreement executed between the parties on 06.12.2023. 6. He places reliance upon Clause 22 of the said Agreement to contend that the obligation of confidentiality formed an integral part of the original Agreement and that the Confidentiality and Non-Use Agreement was, in essence, merely ancillary to, and a subset of, the Distributorship Agreement itself. The relevant clause reads as under: “22. Confidentiality 22.1. Each Party shall during the term of this Agreement and thereafter keep secret and confidential all information disclosed to it pursuant to this Agreement by the other Party that is of a confidential nature (and shall procure that its subsidiaries, holding company, agents and employees are similarly bound) and shall not disclose the same to any person save as expressly authorised in writing to be disclosed by the other Party. 22.2. The obligation of confidentiality contained in clause 22.1 shall not apply or (as the case may be) 22.3. shall cease to apply to information which: (a) at the time of its disclosure by the disclosing Party is already in the public domain or which subsequently enters the public domain otherwise than by breach of the terms of this Agreement by the receiving Party; (b) is already known to the receiving Party (as evidenced by written records) at the time of it disclosure by the disclosing Party and was not otherwise acquired by the receiving Party from the disclosing Party under any obligations of confidence; (c) is at any time after the date of this Agreement acquired by the receiving Party from a third party having the right to disclose the same to the receiving party without breach of obligation owed by that Party to the disclosing Party; or (d) is required to be disclosed by applicable law or order of a court of competent jurisdiction or government department or agency, provided that prior to such disclosure the receiving Party shall advise the disclosing Party of the proposed form of the disclosure.” 7. He further submits that, in terms of Clause 32.5 of the Agreement, the seat of arbitration has been designated as New Delhi Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 and, consequently, the present Petition is clearly maintainable before this Court. 8. He also submits that Clause 9 of the Agreement deals with the aspect of “non-compete” obligations, and it is this clause, read in conjunction with Clause 22 thereof, which constitutes the foundational basis of the separate Confidentiality and Non-Use Agreement. 9. He, however, reiterates that the Confidentiality and Non-Use Agreement remains subservient and ancillary to the Distributorship Agreement and that, for the purposes of the dispute resolution mechanism, primacy ought to be accorded to the Distributorship Agreement itself. 10. This Court has heard learned counsel appearing on behalf of the parties and, with their able assistance, has also perused the contents of the paper book as well as the relevant contractual clauses. This Court is of the considered view that the scope and ambit of judicial scrutiny while exercising powers under Section 11 of the Act is extremely circumscribed. 11. This Court is of the prima facie view that, since the Distributorship Agreement constitutes the principal and umbrella agreement governing the relationship between the parties, all ancillary agreements dealing with aspects already contemplated therein must necessarily remain subservient to, and be construed in harmony with, the Distributorship Agreement itself. 12. In view of the aforesaid, and considering that the Distributorship Agreement designates Delhi as the seat of arbitration, the present Petition is maintainable before this Court. No other objection has been raised by the Respondent. Consequently, this Court finds no impediment in referring the disputes inter se the parties for Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 adjudication by a learned Sole Arbitrator. 13. At this juncture, it is apposite to note that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the Act is no longer res integra. A three-Judge Bench of the Hon’ble Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning1, after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re2, comprehensively delineated the contours of judicial intervention at the stage of Section 11 of the Act. The excerpt of Krish Spg (supra) reads as under: “(c) Judicial interference under the 1996 Act 110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators. 111. Section 11 of the 1996 Act is provided to give effect to the mutual intention of the parties to settle their disputes by arbitration in situations where the parties fail to appoint an arbitrator(s). The parameters of judicial review laid down for Section 8 differ from those prescribed for Section 11. The view taken in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature was legislatively overruled by the introduction of Section 11(6-A) in 2015. Thus, although both these provisions intend to compel parties to abide by their mutual intention to arbitrate, yet the scope of powers conferred upon the courts under both the sections are different. 112. The difference between Sections 8 and 11, respectively, of the 1996 Act is also evident from the scope of these provisions. Some of these differences are: 112.1. While Section 8 empowers any “judicial authority” to refer the parties to arbitration, under Section 11, the power to 1 (2024) 12 SCC 1 2 (2024) 6 SCC 1 Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 refer has been exclusively conferred upon the High Court and the Supreme Court. 112.2. Under Section 37, an appeal lies against the refusal of the judicial authority to refer the parties to arbitration, whereas no such provision for appeal exists for a refusal under Section 11. 112.3. The standard of scrutiny provided under Section 8 is that of prima facie examination of the validity and existence of an arbitration agreement. Whereas, the standard of scrutiny under Section 11 is confined to the examination of the existence of the arbitration agreement. 112.4. During the pendency of an application under Section 8, arbitration may commence or continue and an award can be passed. On the other hand, under Section 11, once there is failure on the part of the parties in appointing the arbitrator as per the agreed procedure and an application is preferred, no arbitration proceedings can commence or continue. 113. The scope of examination under Section 11(6-A) is confined to the existence of an arbitration agreement on the basis of Section 7. The examination of validity of the arbitration agreement is also limited to the requirement of formal validity such as the requirement that the agreement should be in writing. 114. The use of the term “examination” under Section 11(6-A) as distinguished from the use of the term “rule” under Section 16 implies that the scope of enquiry under Section 11(6-A) is limited to a prima facie scrutiny of the existence of the arbitration agreement, and does not include a contested or laborious enquiry, which is left for the Arbitral Tribunal to “rule” under Section 16. The prima facie view on existence of the arbitration agreement taken by the Referral Court does not bind either the Arbitral Tribunal or the Court enforcing the arbitral award. 115. The aforesaid approach serves a twofold purpose — firstly, it allows the Referral Court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the Arbitral Tribunal to rule on the issue of existence of the arbitration agreement in depth. **** 117. In view of the observations made by this Court in Interplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC 1, 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 v. Durga Trading Corpn., (2021) 2 SCC 1 and adopted in NTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385 that the jurisdiction of the Referral Court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 out ex facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision inInterplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC 1. **** 119. The question of “accord and satisfaction”, being a mixed question of law and fact, comes within the exclusive jurisdiction of the Arbitral Tribunal, if not otherwise agreed upon between the parties. Thus, the negative effect of competence-competence would require that the matter falling within the exclusive domain of the Arbitral Tribunal, should not be looked into by the Referral Court, even for a prima facie determination, before the Arbitral Tribunal first has had the opportunity of looking into it. 120. By referring disputes to arbitration and appointing an arbitrator by exercise of the powers under Section 11, the Referral Court upholds and gives effect to the original understanding of the contracting parties that the specified disputes shall be resolved by arbitration. Mere appointment of the Arbitral Tribunal does not in any way mean that the Referral Court is diluting the sanctity of “accord and satisfaction” or is allowing the claimant to walk back on its contractual undertaking. On the contrary, it ensures that the principle of arbitral autonomy is upheld and the legislative intent of minimum judicial interference in arbitral proceedings is given full effect. Once the Arbitral Tribunal is constituted, it is always open for the defendant to raise the issue of “accord and satisfaction” before it, and only after such an objection is rejected by the Arbitral Tribunal, that the claims raised by the claimant can be adjudicated. 121. 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 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. 122. Appointment of an Arbitral Tribunal at the stage of Section 11 petition also does not mean that the Referral Courts forego any scope of judicial review of the adjudication done by the Arbitral Tribunal. The 1996 Act clearly vests the national courts with the power of subsequent review by which the award passed by an arbitrator may be subjected to challenge by any of the parties to the arbitration. ***** 126. The power available to the Referral Courts has to be construed in the light of the fact that no right to appeal is available against any order passed by the Referral Court under Section 11 for either appointing or refusing to appoint an Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 arbitrator. Thus, by delving into the domain of the Arbitral Tribunal at the nascent stage of Section 11, the Referral Courts also run the risk of leaving the claimant in a situation wherein it does not have any forum to approach for the adjudication of its claims, if its Section 11 application is rejected. 127. Section 11 also envisages a time-bound and expeditious disposal of the application for appointment of arbitrator. One of the reasons for this is also the fact that unlike Section 8, once an application under Section 11 is filed, arbitration cannot commence until the Arbitral Tribunal is constituted by the Referral Court. This Court, on various occasions, has given directions to the High Courts for expeditious disposal of pending Section 11 applications. It has also directed the litigating parties to refrain from filing bulky pleadings in matters pertaining to Section 11. Seen thus, if the Referral Courts go into the details of issues pertaining to “accord and satisfaction” and the like, then it would become rather difficult to achieve the objective of expediency and simplification of pleadings. 128. We are also of the view that ex facie frivolity and dishonesty in litigation is an aspect which the Arbitral Tribunal is equally, if not more, capable to decide upon the appreciation of the evidence adduced by the parties. We say so because the Arbitral Tribunal has the benefit of going through all the relevant evidence and pleadings in much more detail than the Referral Court. If the Referral Court is able to see the frivolity in the litigation on the basis of bare minimum pleadings, then it would be incorrect to doubt that the Arbitral Tribunal would not be able to arrive at the same inference, most likely in the first few hearings itself, with the benefit of extensive pleadings and evidentiary material.” (emphasis supplied) 14. The decision in Krish Spinning (supra) thus unequivocally reiterates that the Referral Court, while exercising jurisdiction under Section 11 of the Act, is required to confine itself to a prima facie examination of the existence of a valid Arbitration Agreement and nothing beyond. The Court’s role is facilitative and procedural, namely, to give effect to the parties’ agreed mechanism of dispute resolution when it has failed, without embarking upon an adjudication of contentious factual or legal issues, which are reserved for the Arbitral Tribunal. 15. Accordingly, this Court appoints Mr. Shashank Garg, Senior Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11 Signature Not Verified ARB.P. 740/2026 Advocate (Mobile No. , to adjudicate the disputes as between the parties. 16. The learned 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 Arbitrator. 17. The learned Arbitrator is also requested to file the requisite disclosure under Section 12 (2) of the Act within a week of entering of reference. 18. The Registry is directed to send a receipt of this order to the learned Arbitrator through all permissible modes, including through e- mail. 19. It is made clear that the observations made herein are only prima facie and all rights and contentions of the parties are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law. 20. 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. 21. Accordingly, the present Petition, along with pending application(s), if any, stands disposed of in the above terms. HARISH VAIDYANATHAN SHANKAR, J. MAY 18, 2026/nd/va By:HARVINDER KAUR BHATIA Signing Date:20.05.2026 19:34:11