The Orissa High Court reaffirms that, under Section 11(6)/(6-A) of the Arbitration and Conciliation Act, 1996, its role is confined to establishing the prima facie existence of an arbitration agreement. It upholds Supreme Court precedents (Goqii Technologies; SBI General Insurance; Cox & Kings) and reinforces the competence-competence principle under Section 16. The decision is binding on subordinate courts within Odisha and persuasive for other High Courts.
Summary
| Category | Data |
|---|---|
| Case Name | ARBP/1/2025 of M/S.ANAND GRANITES EXPORTS PRIVATE LIMITED, CHENNAI Vs PRABHUDAYAL AGRAWAL |
| CNR | ODHC010900462024 |
| Date of Registration | 02-01-2025 |
| Decision Date | 26-08-2025 |
| Disposal Nature | Disposed Off |
| Judgment Author | Mr. Justice Harish Tandon (Chief Justice) |
| Court | Orissa High Court |
| Bench | Single Judge Bench (Chief Justice) |
| Precedent Value | Binding (within Odisha); persuasive for other High Courts |
| Overrules / Affirms | Affirms existing Supreme Court precedents |
| Type of Law | Arbitration and Conciliation Act, 1996 |
| Questions of Law | Whether a Section 11 application can be confined to prima facie existence of an arbitration agreement without examining the arbitrability or merits of the dispute. |
| Ratio Decidendi | The High Court’s role under Section 11(6)/(6-A) is limited to ascertaining the prima facie existence of an arbitration agreement. Once such clause is undisputed, questions of arbitrability or scope of the dispute must be referred to the arbitral tribunal under the competence-competence principle (Section 16). No deep factual or merit-based scrutiny is permissible at this stage. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon | Broad definition of arbitration agreement (Section 7); limited scope of court’s scrutiny under Section 11(6)/(6-A); competence-competence under Section 16; distinction between jurisdiction to refer and merits of dispute. |
| Facts as Summarised by the Court | The opposite party held a bauxite‐mining lease and entered a 18 Mar 2010 “raising contract” with an arbitration clause. A dispute arose over alleged breach and revocation of an irrevocable power of attorney. The petitioner invoked arbitration on 04 Feb 2023; the opposite party denied scope and challenged jurisdiction. Madras HC refused venue; Orissa HC entertained Section 11 application. |
| Citations |
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Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the jurisdiction of the Orissa High Court exercising Section 11 applications |
| Persuasive For | Other High Courts and tribunals faced with Section 11 referrals |
| Distinguishes | KSS KSSIIPL Consortium vs. Gail (India) Ltd. — limits post-2015 scrutiny under Section 11(6-A) |
| Follows |
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What’s New / What Lawyers Should Note
- Courts exercising Section 11(6)/(6-A) must stop at prima facie existence of an arbitration clause; merits and arbitrability lie for the tribunal.
- A party’s non-denial of the clause or reference in ancillary documents suffices for appointment of an arbitrator.
- Competence-competence under Section 16 empowers the tribunal to rule on its own jurisdiction, including scope of disputes.
- Section 11(6-A) (2015 Amendment) continues to apply until notification of the 2019 Amendment.
- Practitioners can resist deep factual inquiries at the referral stage by invoking Goqii Technologies and SBI General Insurance.
Summary of Legal Reasoning
- Arbitration Agreement (Section 7): Broadly defined to include clauses in contracts, ancillary documents, telecommunication records, and references in writing.
- Referral Stage (Section 11): Section 11(6) permits Court‐appointed arbitrators when parties fail to agree. Section 11(6-A) (2015 Amendment) limits scrutiny to existence of arbitration agreement.
- Supreme Court Precedents:
- KSS KSSIIPL required prima facie arbitration dispute.
- SBP & Co. mandated jurisdiction and agreement validity checks (pre-2015).
- Goqii Technologies clarified that merits/frivolity are for tribunal.
- Cox & Kings and Duro Felguera affirmed competence-competence and limited court role.
- Competence-Competence (Section 16): Tribunal empowered to rule on its own jurisdiction and existence/validity of arbitration agreement.
- Application: Petition under Section 11 confined to clause existence; opposite party did not deny the clause; appointment of sole arbitrator was mandated.
Arguments by the Parties
Petitioner
- Clause 12 of the raising contract (18 Mar 2010) mandates arbitration; Section 11(6-A) restricts court to existence of clause.
- Ancillary agreements incorporating the main clause bind disputes (Goqii; Ameet Shah; Inox Wind).
- Court cannot probe merits at Section 11 stage (SBI General Insurance).
Opposite Party
- Dispute centers on cancellation of power of attorney, beyond the contract’s scope (KSS KSSIIPL; Duro Felguera).
- Court may verify whether dispute falls within the arbitration clause before referral.
- Non-signatory issues and sub judice civil suit preclude arbitration.
Factual Background
The opposite party held a lease for Bauxite Mines and entered a raising contract on 18 March 2010 with the petitioner, featuring an arbitration clause and an irrevocable power of attorney. A dispute arose when the opposite party allegedly obstructed lease renewal and sought to cancel the power of attorney. On 4 February 2023 the petitioner invoked arbitration; the opposite party denied the clause’s scope and challenged venue. Madras HC declined jurisdiction; petitioner filed Section 11 petition in Orissa HC.
Statutory Analysis
- Section 7: Defines arbitration agreement in writing, including clauses and references.
- Section 11(6)/(6-A): Exhaustive powers for appointment; post-2015 limits to existence of agreement.
- Section 16: Competence-competence allows tribunal to decide own jurisdiction.
- Non-notification of 2019 Amendment means Section 11(6-A) remains effective.
Alert Indicators
- ✔ Precedent Followed
- ⚖️ No Split Verdict
Citations
- Goqii Technologies (P) Ltd. vs. Sokrati Technologies Pvt. Ltd., (2025) 2 SCC 192 (paras 19–23)
- SBI General Insurance Co. Ltd. vs. Krish Spinning, 2024 SCC OnLine SC 1754
- M/s. KSS KSSIIPL Consortium vs. Gail (India) Ltd., (2015) 4 SCC 210 (para 9)
- Duro Felguera S.A. vs. Gangavaram Port Ltd., (2017) 9 SCC 729
- Cox & Kings Ltd. vs. SAP India (P) Ltd., (2024) 4 SCC 1 (para 163)
- SBP & Co. vs. Patel Engineering Ltd., (2005) 8 SCC 618