[Cites 15, Cited by 0]
Punjab-Haryana High Court
K D Solar Systems vs Acme Cleantech Solutions Pvt Ltd on 19 February, 2026
Author: Jasgurpreet Singh Puri
Bench: Jasgurpreet Singh Puri
ARB-304-2025 (O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
ARB-304-2025 (O&M)
Date of Decision:19.02.2026
M/S K.D. Solar Systems
......Petitioner
Versus
M/S Acme Cleantech Solutions Pvt. Ltd.
.
.....Respondents
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present:- Mr. Punit Dutt Tyagi, Advocate (Through V.C.) and
Ms. Smriti Sahay, Advocate for the petitioner.
Mr. Dhanesh Relan, Advocate and
Ms. Sonika Singh, Advocate for the respondent.
*****
JASGURPREET SINGH PURI J.(Oral)
1. The present is a petition filed under Section 11(5) and 11(6) of
the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the
Act'), seeking appointment of a sole arbitrator in the present case.
2. Learned counsel for the petitioner submitted that there was an
agreement between the petitioner and the respondent in the form of two
purchase orders, which have been attached along with the present petition
vide Annexure P-2. The aforesaid purchase orders are dated 13.06.2017 and
07.09.2017 respectively and in pursuance of these purchase orders, four
work orders were issued that are ancillary to the aforesaid purchase orders.
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He further submitted that both the purchase orders contain arbitration
clauses, i.e., Clause Nos. 10 and 23, which provide that in the event of any
dispute or difference arising out of or in connection with the purchase
orders, including any question regarding interpretation or any other matter,
the parties shall resolve such dispute or difference by reference to
arbitration, to be conducted in accordance with the Arbitration and
Conciliation Act, 1996, by a sole arbitrator appointed by the purchaser in
accordance with law.
3. He further submitted that since a dispute arose between the
parties, the petitioner served a notice upon the respondent vide Annexure P-
11 dated 15.10.2023 invoking the arbitration clauses. The respondent vide
reply dated 06.11.2023 (Annexure P-12) denied the claim of the petitioner.
Therefore, he submitted that this Hon'ble Court may appoint a sole
arbitrator for adjudicating the dispute.
4. On the other hand, learned counsel for the respondent
submitted that the present petition is liable to be dismissed on the ground
that there were in fact a total of six purchase orders and eight work orders
between the parties. With regard to four purchase orders and the remaining
work orders, as per the clause, the Court of jurisdiction and seat of
arbitration was at Delhi. Therefore, the petitioner with regard to the said
purchase orders and work orders has already invoked the jurisdiction of
Hon'ble Delhi High Court under Section 11 of the Act, in which an
arbitrator was appointed. After constitution of the said Arbitral Tribunal
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consisting of the sole arbitrator, the arbitration proceedings are in progress.
He submitted that before the aforesaid learned arbitrator, the petitioner has
made a statement of claim not only with regard to those purchase orders
and work orders which were the subject of dispute to be adjudicated by the
arbitrator in Delhi, but also with regard to those purchase orders and work
orders which are the subject matter of the present petition. In this way, a
consolidated claim was made by the petitioner before learned arbitrator,
who is proceeding with the arbitration proceedings at Delhi. Therefore, the
present petition is not maintainable for appointment of an arbitrator for
those disputes which are already sub-judice and pending consideration
before learned arbitrator at Delhi. He further submitted that when the notice
under Section 21 of the Act was issued vide Annexure P-11 dated
15.10.2023, total amount claimed was mentioned therein without specifying
the purchase orders or work orders regarding which the petitioner intended
to invoke arbitration. Although the petitioner proposed names of arbitrators
in the notice but the respondent did not accept them. Therefore, the present
petition is liable to be dismissed.
5. I have heard the learned counsels for the parties.
6. According to learned counsel for the petitioner there are two
purchase orders dated 13.06.2017 and 07.09.2017. Ancillary to these two
purchase orders, there are four work orders. Both the purchase orders
contain arbitration clauses at Clause Nos. 10 and 23, respectively. The same
are reproduced as under:-
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ARB-304-2025 (O&M) 4
"Clause 10. In the event of any dispute or
difference out of or in connection with this Purchase Order as
to the interpretation or any other matter then in such event the
parties shall resolve such dispute or difference by reference to
Arbitration to be conducted in accordance with the Arbitration
and Conciliation Act, 196 by sole Arbitrator appointed in
accordance with said rules. The arbitration will be held in
Gurgaon and conducted in the English language."
"Clause 23- The parties shall first use their best
efforts to settle amicably any dispute arising out of or in
connection with this PO as to the interpretation or any other
matter, by negotiation by referring the dispute to the senior
representatives of each Party, requesting a resolution of the
dispute within Ten (10) days of reference.
In the event of any dispute or difference out of or
in connection with this PO as to the interpretation or any
other matter, where such matter cannot be resolved amicably,
then in such event the parties shall resolve such dispute or
difference by reference to Arbitration to be conducted in
accordance with the Arbitration and Conciliation Act, 196 by
sole Arbitrator appointed by the Purchaser in accordance with
said rules. The arbitration will be held at Gurugram, Haryana
and shall be conducted in the English language."
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7. A perusal of the aforesaid notice Annexure P-11 which was
sent under Section 21 of the Act would show that the arbitration clauses
have been invoked and the names of the proposed arbitrators were also
suggested. However, the description of the purchase orders was not
provided and only the total sum claimed by the petitioner was mentioned.
In the notice, the arbitration clause has been reproduced and numbered as
Clause 8 whereas in the present two purchase orders, the relevant clauses
appear to be at different paragraph numbers. Nonetheless, the notice under
Section 21 of the Act has been issued in this regard.
8. The law with regard to the scope and nature of jurisdiction to
be exercised by this Court under Section 11 of the Arbitration and
Conciliation Act, 1996 is no longer res integra. The same has been
authoritatively settled by the Hon'ble Supreme Court in "SBI General
Insurance Company Limited Vs. Krish Spinning", 2024 SCC Online SC
1754 and also another judgment of Hon'ble Supreme Court in "Interplay
between Arbitration Agreements under Arbitration and Conciliation Act,
1996 and Stamp Act, 1899, In Re" (2024) 6 SCC 1 and therefore, the issue
stands conclusively settled. The relevant portion of the aforesaid judgment
of Hon'ble Supreme Court passed in SBI General Insurance Company
Limited's case (Supra) is reproduced as under:-
"110. 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
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ARB-304-2025 (O&M) 6
arbitration agreement is also limited to the requirement of
formal validity such as the requirement that the agreement
should be in writing.
111. 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.
112. The aforesaid approach serves a two-fold purpose-
firstly, it allows the referral court to weed out nonexistent
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.
113. Referring to the Statement of Objects and Reasons of the
Arbitration and Conciliation (Amendment) Act, 2015, it was
observed in In Re: Interplay (supra) that the High Court and
the Supreme Court at the stage of appointment of arbitrator
shall examine the existence of a prima facie arbitration
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agreement and not any other issues. The relevant observations
are extracted hereinbelow:
"209. The above extract indicates that the Supreme
Court or High Court at the stage of the appointment of
an arbitrator shall "examine the existence of a prima
facie arbitration agreement and not other issues". These
other issues not only pertain to the validity of the
arbitration agreement, but also include any other issues
which are a consequence of unnecessary judicial
interference in the arbitration proceedings. Accordingly,
the "other issues" also include examination and
impounding of an unstamped instrument by the referral
court at the Section 8 or Section 11 stage. The process
of examination, impounding, and dealing with an
unstamped instrument under the Stamp Act is not a
timebound process, and therefore does not align with
the stated goal of the Arbitration Act to ensure
expeditious and time-bound appointment of
arbitrators.[...]
(Emphasis supplied)
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
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ARB-304-2025 (O&M) 8
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).
115. The dispute pertaining to the "accord and satisfaction"
of claims is not one which attacks or questions the existence of
the arbitration agreement in any way. As held by us in the
preceding parts of this judgment, the arbitration agreement,
being separate and independent from the underlying
substantive contract in which it is contained, continues to
remain in existence even after the original contract stands
discharged by "accord and satisfaction."
116. 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
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determination, before the arbitral tribunal first has had the
opportunity of looking into it."
9. The relevant paragraphs of the aforesaid judgment passed in
Interplay between Arbitration Agreements under Arbitration and
Conciliation Act, 1996 and Stamp Act, 1899, In Re Case (Supra) are also
reproduced as under:-
"120. In view of the above discussion, we formulate our
conclusions on this aspect. First, the separability presumption
contained in Section 16 is applicable not only for the purpose
of determining the jurisdiction of the Arbitral Tribunal. It
encapsulates the general rule on the substantive independence
of an arbitration agreement. Second, parties to an arbitration
agreement mutually intend to confer jurisdiction on the
arbitral tribunal to determine questions as to jurisdiction as
well as substantive contractual disputes between them. The
separability presumption gives effect to this by ensuring the
validity of an arbitration agreement contained in an
underlying contract, notwithstanding the invalidity, illegality,
or termination of such contract. Third, when the parties
append their signatures to a contract containing an
arbitration agreement, they are regarded in effect as
independently appending their signatures to the arbitration
agreement. The reason is that the parties intend to treat an
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ARB-304-2025 (O&M) 10
arbitration agreement contained in an underlying contract as
distinct from the other terms of the contract; and Fourth, the
validity of an arbitration agreement, in the face of the
invalidity of the underlying contract, allows the Arbitral
Tribunal to assume jurisdiction and decide on its own
jurisdiction by determining the existence and validity of the
arbitration agreement. In the process, the separability
presumption gives effect to the doctrine of competence-
competence.
xx xx xx
165. The legislature confined the scope of reference under
Section 11(6-A) to the examination of the existence of an
arbitration agreement. The use of the term "examination" in
itself connotes that the scope of the power is limited to a prima
facie determination. Since the Arbitration Act is a
self-contained code, the requirement of "existence" of an
arbitration agreement draws effect from section 7 of the
Arbitration Act. In Duro Felguera (supra), this Court held that
the referral courts only need to consider one aspect to
determine the existence of an arbitration agreement - whether
the underlying contract contains an arbitration agreement
which provides for arbitration pertaining to the disputes which
have arisen between the parties to the agreement. Therefore,
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ARB-304-2025 (O&M) 11
the scope of examination under Section 11(6-A) should be
confined to the existence of an arbitration agreement on the
basis of Section 7. Similarly, the validity of an arbitration
agreement, in view of Section 7, should be restricted to the
requirement of formal validity such as the requirement that the
agreement be in writing. This interpretation also gives true
effect to the doctrine of competence-competence by leaving the
issue of substantive existence and validity of an arbitration
agreement to be decided by arbitral tribunal under Section 16.
We accordingly clarify the position of law laid down in Vidya
Drolia (supra) in the context of Section 8 and section 11of the
Arbitration Act.
166. 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
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position of law can also be gauged from the plain language of
the statute."
10. Issuance of the purchase orders (Annexure P-2) dated
13.06.2017 and 07.09.2017 has not been disputed by learned counsel for
the respondent. It has further not been disputed by learned counsel for the
respondent that these two purchase orders contain arbitration clauses. It was
argued by learned counsel for the respondent that the present petition under
Section 11 of the Act would not be maintainable because the petitioner has
already raised the same claim in its statement of claim before the learned
arbitrator at Delhi, pertaining to those purchase orders whose jurisdiction
was at Delhi, as well as the present purchase orders. However jurisdiction
qua present purchase orders is at Gurugram within jurisdiction of this
Court.
11. During the course of arguments, learned counsel for the
petitioner submitted that the aforesaid claim, pertaining to the subject
matter of the present petition, which was part of the statement of claim
before learned arbitrator at Delhi was made inadvertently and now an
application has been filed before learned arbitrator at Delhi for the
withdrawal of the same but no order has yet been pronounced on the said
application. However, jurisdiction qua present purchase order is at
Gurugram
12. As to whether there is a semblance or consolidation of the
claims by the petitioner before the learned Arbitrator at Delhi or whether
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the petitioner is entitled to the grant of any claim raised in the present
petition, or whether such claims are maintainable before learned arbitrator,
lies within the domain and scope of learned arbitrator at the relevant stage.
As aforesaid, the scope of reference of the Court under Section 11 of the
Act is confined only to prima facie existence of an arbitration clause, which
is present in the case at hand. It is also a settled law that exactitude in
notices under Section 21 of the Act is not necessary; what is required is the
invocation of the arbitration clause. The Hon'ble Supreme Court in Adavya
Projects Pvt. Ltd. v. M/s Vishal Structurals Pvt. Ltd. & Ors. (2025) SCC
Online SC 806 has observed and laid down the principles as follows:-
" Summary of Conclusions
60. Our legal analysis of the issues that we set out above, as well as
our findings in the facts of the given appeal, can be stated as
follows:
60.1. A notice invoking arbitration under Section 21
ACA is mandatory as it fixes the date of commencement of
arbitration, which is essential for determining limitation
periods and the applicable law, and it is a prerequisite to
filing an application under Section 11. However, merely
because such a notice was not issued to certain persons who
are parties to the arbitration agreement does not denude the
arbitral tribunal of its jurisdiction to implead them as parties
during the arbitral proceedings.
60.2. The purpose of an application under Section 11
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ARB-304-2025 (O&M) 14
is for the court to appoint an arbitrator, so as to enable
dispute resolution through arbitration when the appointment
procedure in the agreement fails. The court only undertakes a
limited and prima facie examination into the existence of the
arbitration agreement and its parties at this stage. Hence,
merely because a court does not refer a certain party to
arbitration in its order does not denude the jurisdiction of the
arbitral tribunal from impleading them during the arbitral
proceedings as the referral court's view does not finally
determine this issue.
60.3. The relevant consideration to determine whether
a person can be made a party before the arbitral tribunal is if
such a person is a party to the arbitration agreement. The
arbitral tribunal must determine this jurisdictional issue in
an application under Section 16 by examining whether a non-
signatory is a party to the arbitration agreement as per
Section 7 ACA.
60.4. In the facts of the present appeal, respondents 2
and 3 are parties to the arbitration agreement in Clause 40 of
the LLP Agreement despite being non-signatories. Their
conduct is in accordance with and in pursuance of the terms
of the LLP Agreement, and hence, they can be made parties
to the arbitral proceedings."
13. It has been held in SBI General Insurance Company
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Limited's case (supra) and in Interplay between Arbitration Agreements
under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, In Re
(supra) that at the time of reference, the Court under Section 11 of the Act
is not to conduct a mini-trial and is only required to examine the prima
facie existence of an arbitration clause and its invocation thereof-nothing
more and nothing less. In this way, this Court would not conduct any mini-
trial as to whether the claim would be arbitrable before the learned
arbitrator or not.
14. Another issue that arises in the present case is that there are
two purchase orders and as per learned counsel for the petitioner, there are
four ancillary work orders connected with the purchase orders. Therefore,
one consolidated arbitration proceeding cannot be ordered. Reference can
be made to the judgment of the Hon'ble Supreme Court in M/s. Duro
Felguera S.A. vs. M/s. Gangavaram Port Limited, (2017) 9 SCC 729
wherein it was held that in case where various agreements constitute a
composite transaction, Court can refer disputes to arbitration if all ancillary
agreements are relatable to principal agreement and performance of one
agreement is so intrinsically interlinked with other agreements.
Consequently, in the aforesaid case, six Arbitral Tribunals were constituted
with same arbitrators.
15. In view of the aforesaid facts and circumstances, the present
petition is allowed. Two different arbitral tribunals are hereby constituted,
each consisting of a common sole arbitrator, with regard to the purchase
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orders (Annexure P-2) dated 13.06.2017 and 07.09.2017 along with their
ancillary work orders. There shall be common arbitrator for both arbitral
tribunals. Mr. Shri Krishan Kaushik, District & Sessions Judge (Retd.),
resident of House No.1118, Sector 46, Gurugram, Haryana, Mobile No.
9599499060, Email: [email protected] is nominated as the Sole
Arbitrator to adjudicate the dispute between the parties, subject to
compliance of statutory provisions including Section 12 of the Act.
16 Parties are directed to appear before learned Arbitrator on date,
time and place to be fixed and communicated by learned Arbitrator at his
convenience.
17. Fee shall be paid to learned Arbitrator in accordance with the
Fourth Schedule of the Arbitration Act, as amended.
18. Learned Arbitrator is also requested to complete the
proceedings as per the time limit prescribed under Section 29-A of the
Act.
19. A request letter alongwith a copy of the order be sent to
Mr. Shri Krishan Kaushik, District & Sessions Judge (Retd.).
19.02.2026 (JASGURPREET SINGH PURI)
shweta JUDGE
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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