Mr. Ashish Chhabra vs Hippostores Technology Private ... on 13 February, 2026

$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:13.02.2026

+ ARB.P. 38/2026

MR. ASHISH CHHABRA .....Petitioner
Through: Mr. Mayank Rajpal & Mr.
Naman Gujral, Advocates

versus

HIPPOSTORES TECHNOLOGY PRIVATE LIMITED
.....Respondent
Through: Mr. Harish Malik and Mr.
Deepak Gupta, Advocates

CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR

% JUDGEMENT (ORAL)

I.A. 282/2026 (For condonation of delay)

1. The present application seeks condonation of delay of 1 day in
re-filing the same.
2. For the sufficient reasons stated in the application, the delay is
condoned.
3. Application stands disposed of.

ARB.P. 38/2026

4. The present petition has been filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 ["the Act"], seeking the
appointment of an Arbitrator to adjudicate the disputes between the
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By:HARVINDER KAUR
BHATIA
Signing Date:17.02.2026
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parties in terms of Clause Nos. 11 and 12 of the Appointment Letter
dated 22.04.2019. The said Clauses read as under:
"11. ARBITRATION:-
All or any dispute(s) arising out of, touching upon, connected with,
concerning or in relation to appointment letter or in relation to the
employment with the Company including the terms, interpretation
and validity shall be referred to arbitration to be conducted by an
arbitral tribunal comprising of a sole arbitrator to be appointed by
the Company. You agree that you will not have any objection /
challenge to any appointment made as provided herein. The
arbitration shall be governed by the Arbitration & Conciliation Act,
1996 or any statutory amendments / modifications thereof for the
time being in force. The seat and venue of the arbitration shall be
Delhi. The arbitration proceedings shall be in English language
only. The award made by the arbitral tribunal shall be final and
binding on the parties.
12. GOVERNING LAW AND JURISDICTION ;- This
appointment letter shall be governed and construed in accordance
with the laws of India and shall be subject to exclusive jurisdiction
of Delhi Courts only."

5. The material on record indicates that the Notice under Section
21 of the Act dated 01.11.2025, invoking arbitration, was issued to the
Respondent. The same is annexed to the present Petition as
„DOCUMENT 8 (COLLY)‟.
6. This Court is cognizant of the scope of interference at the stage
of a Petition under Section 11(6) of the Act. The law with respect to
the scope and standard of judicial scrutiny under Section 11(6) of the
Act has been fairly well settled. A Coordinate bench of this Court, in
Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt
Ltd [2025 SCC OnLine Del 3022], has extensively dealt with the
scope of interference at the stage of Section 11. The Court held as
under:-
"9. The law with respect to the scope and standard of judicial

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By:HARVINDER KAUR
BHATIA
Signing Date:17.02.2026
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scrutiny under Section 11(6) of the 1996 Act has been fairly well
settled. The Supreme Court in the case of SBI General Insurance
Co. Ltd. v. Krish Spinning, while considering all earlier
pronouncements including the Constitutional Bench decision of
seven judges in the case of Interplay between Arbitration
Agreements under the Arbitration & Conciliation Act, 1996 &
the Indian Stamp Act, 1899, In re has held that scope of inquiry at
the stage of appointment of an Arbitrator is limited to the extent
of prima facie existence of the arbitration agreement and nothing
else.
10. It has unequivocally been held in paragraph no. 114 in the
case of SBI General Insurance Co. Ltd. that observations made
in Vidya Drolia v. Durga Trading Corpn., and adopted in NTPC
Ltd. v. SPML Infra Ltd., that the jurisdiction of the referral court
when dealing with the issue of "accord and satisfaction" under
Section 11 extends to weeding out ex-facienon-arbitrable and
frivolous disputes would not apply after the decision of Re :
Interplay. The abovenoted paragraph no. 114 in the case of SBI
General Insurance Co. Ltd. reads as under:--
"114. In view of the observations made by this Court
in In Re : 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 satisfaction" under Section 11
extends to weeding out ex-facie non-arbitrable and
frivolous disputes would continue to apply despite the
subsequent decision in In Re : Interplay (supra)."
11. Ex-facie frivolity and dishonesty are the issues, which have
been held to be within the scope of the Arbitral Tribunal which is
equally capable of deciding upon the appreciation of evidence
adduced by the parties. While considering the aforesaid
pronouncements of the Supreme Court, the Supreme Court in the
case of Goqii Technologies (P) Ltd. v. Sokrati Technologies (P)
Ltd., however, has held that the referral Courts under Section 11
must not be misused by one party in order to force other parties to
the arbitration agreement to participate in a time-consuming and
costly arbitration process. Few instances have been delineated such
as, the adjudication of a non-existent and malafide claim through
arbitration. The Court, however, in order to balance the limited
scope of judicial interference of the referral Court with the interest
of the parties who might be constrained to participate in the
arbitration proceedings, has held that the Arbitral Tribunal
eventually may direct that the costs of the arbitration shall be borne

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By:HARVINDER KAUR
BHATIA
Signing Date:17.02.2026
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by the party which the Arbitral Tribunal finds to have abused the
process of law and caused unnecessary harassment to the other
parties to the arbitration.
12. It is thus seen that the Supreme Court has deferred the
adjudication of aspects relating to frivolous, non-existent
and malafide claims from the referral stage till the arbitration
proceedings eventually come to an end. The relevant extracts
of Goqii Technologies (P) Ltd. reads as under:--
"20. As observed in Krish Spg. [SBI General Insurance
Co. Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024 INSC
532], frivolity in litigation too is an aspect which the
referral court should not decide at the stage of Section 11
as the arbitrator is equally, if not more, competent to
adjudicate the same.
21. Before we conclude, we must clarify that the
limited jurisdiction of the referral courts under Section 11
must not be misused by parties in order to force other
parties to the arbitration agreement to participate in a
time consuming and costly arbitration process. This is
possible in instances, including but not limited to, where
the claimant canvasses the adjudication of non-existent
and mala fide claims through arbitration.
22. With a view to balance the limited scope of judicial
interference of the referral courts with the interests of the
parties who might be constrained to participate in the
arbitration proceedings, the Arbitral Tribunal may direct
that the costs of the arbitration shall be borne by the party
which the Tribunal ultimately finds to have abused the
process of law and caused unnecessary harassment to the
other party to the arbitration. Having said that, it is
clarified that the aforesaid is not to be construed as a
determination of the merits of the matter before us, which
the Arbitral Tribunal will rightfully be equipped to
determine."
13. In view of the aforesaid, the scope at the stage of Section 11
proceedings is akin to the eye of the needle test and is limited to
the extent of finding a prima facie existence of the arbitration
agreement and nothing beyond it. The jurisdictional contours of the
referral Court, as meticulously delineated under the 1996 Act and
further crystallised through a consistent line of authoritative
pronouncements by the Supreme Court, are unequivocally confined
to a prima facie examination of the existence of an arbitration
agreement. These boundaries are not merely procedural safeguards
but fundamental to upholding the autonomy of the arbitral process.
Any transgression beyond this limited judicial threshold would not
only contravene the legislative intent enshrined in Section 8 and
Section 11 of the 1996 Act but also risk undermining the sanctity

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By:HARVINDER KAUR
BHATIA
Signing Date:17.02.2026
12:17:31
and efficiency of arbitration as a preferred mode of dispute
resolution. The referral Court must, therefore, exercise restraint and
refrain from venturing into the merits of the dispute or adjudicating
issues that fall squarely within the jurisdictional domain of the
arbitral tribunal. It is thus seen that the scope of enquiry at the
referral stage is conservative in nature. A similar view has also
been expressed by the Supreme Court in the case of Ajay
Madhusudan Patel v. Jyotrindra S. Patel."

7. Learned counsel appearing for the parties are ad idem that the
matter may be referred to arbitration, and since the value of claims is
stated to be for approximately Rs. 9 lakhs, the disputes be referred to
arbitration, to be adjudicated by an Advocate.
8. Accordingly, Ms. Mishika Bajpai, Advocate (Mobile No.
9811840277 and e-mail: [email protected]), is
appointed as the Arbitrator to adjudicate the disputes inter se the
parties.
9. 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.
10. The learned Arbitrator shall be entitled to fee in accordance
with the Fourth Schedule of the Act or as may otherwise be agreed to
between the parties and the learned Arbitrator.
11. The parties shall share the learned Arbitrator's fee and arbitral
cost, equally.
12. 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.
13. Needless to state, nothing in this order shall be construed as an
expression of opinion of this Court on the merits of the controversy.
All rights and contentions of the parties in this regard are reserved.
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By:HARVINDER KAUR
BHATIA
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14. Let the copy of the said order be sent to the learned Arbitrator
through the electronic mode as well.
15. Accordingly, the present Petition stands disposed of in the
above-stated terms.

HARISH VAIDYANATHAN SHANKAR, J.

FEBRUARY 13, 2026/rk/her