Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-014836-014836 – 2025 |
| Diary Number | 17103/2023 |
| Judge Name | HON’BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA |
| Bench |
HON’BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA HON’BLE MR. JUSTICE ATUL S. CHANDURKAR |
| Precedent Value | Binding on courts below |
| Overrules / Affirms | Affirms minimal-intervention standard under Section 11; upholds existing precedent |
| Type of Law | Arbitration and Conciliation Act, 1996 |
| Questions of Law |
|
| Ratio Decidendi | The court held that under Section 11(6-A) the High Court need only satisfy itself prima facie of the existence of an arbitration agreement—without probing authority, capacity or merits—and refer the dispute to arbitration. Detailed objections as to whether an individual consortium member can independently invoke the clause must be decided by the Arbitral Tribunal under Section 16. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court |
|
| Facts as Summarised by the Court | APGENCO invited bids from a consortium for EPC works; Tecpro (lead), VA Tech and Gammon formed the consortium. Purchase Orders incorporated the GCC with Clause 22.2 arbitration. Tecpro’s financial distress led VA Tech to assume work; Tecpro later entered CIRP. Tecpro unilaterally invoked arbitration; APGENCO failed to appoint arbitrator; Section 11 petition ensued. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts (High Courts exercising Section 11 jurisdiction) |
| Persuasive For | Other High Courts and tribunals |
| Distinguishes | Delhi HC’s Consulting Engineers Group Ltd. v. NHAI; Bombay HC’s MSEDCL v. Godrej (on capacity of consortium members) |
| Follows | Duro Felguera SA v. Gangavaram Port Ltd.; In Re: Interplay Between Arbitration Agreements… |
What’s New / What Lawyers Should Note
- Clarifies that at the Section 11 stage, courts must confine scrutiny to the prima facie existence of an arbitration agreement.
- Confirms that capacity or authority of a non-signatory (or consortium member) to invoke arbitration is a matter for the Arbitral Tribunal under Section 16.
- Reinforces minimal-intervention policy under Section 11(6-A) and the competence-competence doctrine.
- Distinguishes conflicting High Court decisions that undertook detailed capacity analysis at the referral stage.
Summary of Legal Reasoning
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Legislative Scheme
- Section 11(6-A): referral court’s role limited to “examination of existence of an arbitration agreement.”
- Section 16: Arbitral Tribunal empowered to rule on jurisdiction, including objections to existence, validity or capacity.
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Competence-Competence and Minimal Intervention
- Courts must avoid mini-trials at Section 11; only a prima facie check is required (Duro Felguera; In Re).
- Detailed evidentiary and legal disputes reserved for the Tribunal.
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Non-Signatory / Consortium Member Principle
- Whether an individual member is prima facie a “party” depends on contract and consortium-agreement terms.
- Referral court simply tests prima facie connection; Tribunal then decides if the member is bound.
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Precedential Consistency
- Upholds prior Supreme Court rulings (Cox & Kings; Goqii) delineating referral vs. arbitral stage analysis.
Arguments by the Parties
Petitioners (APGENCO & VA Tech Wabag)
- The GCC arbitration clause binds only the “Contractor” (the consortium), not individual members.
- Purchase Orders replace GCC and contain exclusive civil-court jurisdiction; no arbitration clause.
- Tecpro’s insolvency and loss of lead status preclude unilateral invocation.
- Group-of-companies doctrine inapplicable; authority to arbitrate lies only with the consortium collectively.
Respondent (Tecpro Systems Ltd.)
- Purchase Orders incorporate the GCC by reference, including Clause 22.2.
- “Contractor” includes legal successors; consortium ceases on insolvency, so Tecpro retains independent rights.
- Consortium is not a separate legal entity; members have distinct scopes and payment streams.
- Capacity and authority objections fall within Section 16 and must be decided by the Tribunal.
Factual Background
APGENCO invited EPC bids requiring a consortium. Tecpro (lead), VA Tech and Gammon formed a consortium and received Letters of Intent and Purchase Orders incorporating an arbitration clause. Tecpro’s financial collapse led VA Tech to complete its scope; Tecpro later entered insolvency proceedings. Disputes over delays and alleged losses prompted Tecpro to invoke arbitration unilaterally. APGENCO declined to appoint an arbitrator, leading Tecpro to file a Section 11(6) petition. The Telangana High Court constituted the Arbitral Tribunal; APGENCO appealed.
Statutory Analysis
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Section 11(6) & (6-A), Arbitration and Conciliation Act, 1996
- Section 11(6-A) mandates that the referral court’s examination is confined to the existence of an arbitration agreement—no detailed probe into capacity or merits.
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Section 16, Act 1996
- Grants the Arbitral Tribunal competence to rule on its own jurisdiction, including any objections to the existence, validity or scope of the arbitration agreement.
Alert Indicators
- ✔ Precedent Followed – Affirms limited judicial scrutiny at the Section 11 stage.