[Cites 14, Cited by 0]
Punjab-Haryana High Court
M/S Rattan Constructions vs M/S Pgimer Chanidgarh And Another on 12 March, 2026
Author: Jasgurpreet Singh Puri
Bench: Jasgurpreet Singh Puri
ARB-781-2025 (O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
ARB-781-2025 (O&M)
Date of Decision:12.03.2026
M/S Rattan Constructions
.......Petitioner
Versus
M/S PGIMER Chandigarh and another
.......Respondents
CORAM: HON'BLE MR. JUSTICE JASGURPREET SINGH PURI
Present:- Mr. Satvinder Singh, Advocate for the petitioner.
Mr. Avinit Avasthi, Advocate for the respondents.
*****
JASGURPREET SINGH PURI J.(Oral)
1. The present is a petition filed under Section 11 (6) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'),
seeking appointment of sole arbitrator in the present case.
2. Written statement filed on behalf of respondents is taken on
record.
3. Learned counsel for the petitioner submitted that there exists
an agreement between the parties vide Annexure P-1, which contains an
arbitration clause i.e. Clause 25 providing for appointment of a sole
arbitrator. He submitted that as per the said clause, the sole arbitrator is to
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be appointed by the Director of respondent-PGI, which is otherwise
impermissible in law because of conflict of interest in view of Section 12(5)
of the Act. Reliance has been placed upon the judgment of Hon'ble
Supreme Court in Perkins Eastman Architects DPC and another v. HSCC
(India) Limited, (2020) 20 SCC 760, wherein it has been held that
unilateral appointment of a sole arbitrator by one of the parties is
impermissible in law. He further submitted that since a dispute arose
between the parties, the petitioner served a notice dated 28.07.2025 upon
the respondents vide Annexure P-7 for invoking the arbitration clause but
no response was received from the respondents. Therefore, he submitted
that this Hon'ble Court may appoint a sole arbitrator to adjudicate upon the
dispute.
4. On the other hand, learned counsel for the respondent-PGI
submitted that there is no dispute regarding the existence of the agreement
(Annexure P-1) or the arbitration clause contained therein and there is also
no dispute regarding the invocation of the arbitration clause by the
petitioner by issuing notice (Annexure P-7) upon the respondents, to which
the respondents did not reply. He further submitted that the objection of the
respondents is that the claim of the petitioner is time barred and therefore,
constitutes a non-arbitrable dispute and cannot be referred to arbitration.
Accordingly, the present petition may be dismissed.
5. I have heard the learned counsels for the parties.
6. The existence of the agreement containing the arbitration
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clause, as well as the invocation of the said clause by issuance of notice,
has not been disputed by the learned counsel for the respondents. The only
objection raised by the respondents is that the claim of the petitioner is time
barred.
7. The aforesaid objection raised by learned counsel for the
respondents is not sustainable in view of the law laid down 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 law is no longer res integra. 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
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
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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
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
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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
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-
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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
determination, before the arbitral tribunal first has had the
opportunity of looking into it."
8. 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:-
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"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
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
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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,
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
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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
position of law can also be gauged from the plain language of
the statute."
9. It is a settled law that the aforesaid objection regarding the
time-barred nature of the claim cannot be raised at the reference stage under
Section 11 of the Act and the same can always be taken at an appropriate
stage before the learned Arbitrator, if so required. The essential
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requirements for the appointment of an arbitrator are therefore, satisfied in
the present case, as they are not in dispute.
10 In view of the aforesaid facts and circumstances, the present
petition is allowed. Mr.Somesh Arora, Advocate, resident of House
No.1106, Sector 71, Mohali, Mobile No.9810143762, 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.
11. Parties are directed to appear before learned Arbitrator on date,
time and place to be fixed and communicated by learned Arbitrator at his
convenience.
12. Fee shall be paid to learned Arbitrator in accordance with the
Fourth Schedule of the Arbitration Act, as amended.
13. Learned Arbitrator is also requested to complete the
proceedings as per the time limit prescribed under Section 29-A of the
Act.
14. A request letter alongwith a copy of the order be sent to
Sh. Somesh Arora, Advocate.
12.03.2026 (JASGURPREET SINGH PURI)
shweta JUDGE
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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