ARB.P. 2057/2025 Page 1 of 9 $~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 09.04.2026 + ARB.P. 2057/2025 M/S WINSOME BREWERIES LIMITED .....Petitioner Through: Mr. Manish Srivastava and Mr. Hardik Vashisht, Advocates. versus M/S BHORUKA POWER CORPORATION LTD .....Respondent Through: Mr. Satyajit Sarna and Mr. Aman Goyal, Advocates. CORAM: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL) 1. The present Petition has been filed under Sections 11(5) & (6) of the Arbitration and Conciliation Act, 19961, seeking the appointment of an Arbitrator to adjudicate the disputes inter se the parties arising out of three Inter-Corporate Deposit Agreements dated 25.10.2016, 22.02.2017 and 10.08.20172 executed between the parties. 2. Clause 7 of the ICDs contains the dispute resolution clause, which stipulates for resolution of disputes between the parties thereto by way of Arbitration. The said clause reads as under: “7. Disputes, if any, shall be decided by an Arbitrator to be appointed by you. Jurisdiction of Courts/ Venue of Arbitration 1 Act 2 ICDs Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 2 of 9 shall be New Delhi only.” 3. The material on record indicates that the statutory requirement under Section 21 of the Act for invocation the aforestated Arbitration clause stands duly complied with vide Legal Notice dated 04.04.2025 issued by the Petitioner. 4. Learned counsel appearing on behalf of the Respondent submits that the disputes between the parties stand fully settled and that nothing survives for adjudication. He draws the attention of this Court to the Order dated 06.02.2025 passed by the learned Co-ordinate Bench of this Court, wherein it is recorded that the amounts in respect of which an earlier Order dated 01.07.2022 had been passed by the learned District Court, pursuant to which a Demand Draft for a sum of Rs. 1,55,32,602/- was issued, stood duly paid. He also refers to Paragraph 5 of the Order which reads as follows: “5. However, after some arguments in the Court, the parties have arrived at a settlement. The respondents have agreed to pay another sum of Rs. 6 lakhs to the petitioner within two weeks from today, which is acceptable to the petitioner. The statement of the counsel for the respondents is taken on record and the respondents are bound by the same.” 5. He would, therefore, submit that the payment of the sum of Rs. 6,00,000/- is indicative of the parties having settled all the issues inter se. 6. This Court notices that the said Order dated 06.02.2025 arose out of an appeal concerning the closure of proceedings relating to dishonour of the cheques without the consent of the complainant. It is further noticed that the Court therein also recorded that the parties had agreed to settle that matter upon the further payment of a sum of Rs. 6,00,000/-. Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 3 of 9 7. Learned counsel appearing on behalf of the Respondent further contends that the present Petition is ex facie barred by limitation, having been filed almost six years after the alleged cause of action first arose. 8. Per contra, learned counsel appearing on behalf of the Petitioner contends that the ICDs themselves provided for payment of interest and that the total outstanding amount was substantially higher than the amount which formed the subject matter of the complaint, culminating in the Order dated 06.02.2025. It is contended that disputes between the parties, therefore, continue to subsist and require adjudication through arbitration. 9. Learned counsel appearing on behalf of the Petitioner further contends that the payment of the aforesaid amount cannot be construed as an acknowledgement of the entire claim raised by the Petitioner. 10. Learned counsel for the Petitioner submits that the present Petition is not barred by limitation and places reliance on Section 19 of the Limitation Act, 1908. It is contended that the Order dated 01.07.2022 read with Order dated 06.02.2025 constitutes a clear acknowledgement of liability by the Respondent. Such acknowledgement, having been made before the expiry of the prescribed period, gives rise to a fresh period of limitation, which commenced from 06.02.2025. Consequently, the present Petition, having been instituted within the renewed period of limitation, is ex facie maintainable. 11. This Court is of the view that a determination of whether or not matters as between the parties stood finally resolved would require Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 4 of 9 this Court to examine the contours of the earlier litigation as well as enter into an inquiry on the factual matrix. 12. 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 Spinning3, 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 re4, 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: 3 (2024) 12 SCC 1 4 (2024) 6 SCC 1 Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 5 of 9 112.1. While Section 8 empowers any “judicial authority” to refer the parties to arbitration, under Section 11, the power to 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 inVidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 and adopted inNTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385 that the jurisdiction of the Referral Court Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 6 of 9 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 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 Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 7 of 9 any order passed by the Referral Court under Section 11 for either appointing or refusing to appoint an 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) 13. 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 Digitally Signed By:NEERU Signing Date:10.04.2026 16:49:19 Signature Not Verified ARB.P. 2057/2025 Page 8 of 9 for the Arbitral Tribunal. 14. In view of the law as laid down by the Hon’ble Supreme Court in Krish Spinning (supra), the scope of this Court’s jurisdiction under Section 11 of the Act is extremely circumscribed. All the contentions sought to be raised herein are matters that can appropriately be urged before the learned Arbitrator, who is legally empowered and competent to adjudicate upon the same. 15. In view thereof, this Court is of the view that the matter may be referred to arbitration by an Arbitrator for the purpose of the resolution of disputes between the parties. 16. Material on record indicates that the valuation of the subject matter of the disputes is stated to be approximately Rs. 1.94 crores. 17. Accordingly, this Court hereby requests Mr. Jayant Tripathi, Advocate (Mobile No.9891871186), to enter upon the reference and adjudicate the disputes inter se the parties. 18. The learned Arbitrator may proceed with the arbitration proceedings, subject to furnishing to the parties the requisite disclosures as required under Section 12(2) of the Act. 19. 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. 20. The parties shall share the learned Arbitrator’s fee and arbitral costs equally. 21. 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. 22. Needless to state, nothing in this order shall be construed as an By:NEERU Signing Date:10.04.2026 16:49:19 ARB.P. 2057/2025 Page 9 of 9 expression of opinion of this Court on the merits of the controversy. 23. Let the copy of the said order be sent to the learned Arbitrator through all permissible modes, including electronic mode as well. 24. Accordingly, the present Petition stands disposed of in the above-stated terms. HARISH VAIDYANATHAN SHANKAR, J. APRIL 09, 2026/tk/DJ By:NEERU Signing Date:10.04.2026 16:49:19