A) ABSTRACT / HEADNOTE

The case Office for Alternative Architecture v. IRCON Infrastructure and Services Ltd., decided by the Supreme Court of India on 13 May 2025, concerns the scope of judicial intervention under Section 11 of the Arbitration and Conciliation Act, 1996. The primary issue was whether, at the stage of appointing an arbitrator, the Court is limited to examining only the existence of an arbitration agreement, or whether it may also determine the arbitrability of specific claims. The Delhi High Court had earlier bifurcated the appellant’s claims, holding certain claims as non-arbitrable under Clause 50 and 50.2 of the contract. The appellant argued that such exclusions fall within the jurisdiction of the arbitral tribunal.

The Supreme Court reaffirmed the principle laid down in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (2023 INSC 1066), which clarified that under Section 11(6A) the referral court must restrict itself to a prima facie examination of the existence of an arbitration agreement, leaving questions of arbitrability to the arbitral tribunal. The Court disapproved of the High Court’s approach of segregating arbitrable and non-arbitrable claims. Relying on SBI General Insurance Co. Ltd. v. Krish Spinning (2024 INSC 532), the Court emphasized that judicial interference at the referral stage must be minimal.

By setting aside the Delhi High Court’s order, the Supreme Court restored the jurisdiction of the arbitral tribunal to determine the issue of arbitrability of claims, thus reinforcing the doctrine of competence-competence and the legislative intent of limiting judicial scrutiny under Section 11.

Keywords: Arbitration agreement; Appointment of arbitrator; Non-arbitrable claims; Section 11(6A); Judicial intervention; Competence-competence; Referral court; Excepted matters.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The present case arose from a contractual dispute between Office for Alternative Architecture and IRCON Infrastructure and Services Ltd. concerning the invocation of arbitration under their agreement. The appellant sought reference of disputes to arbitration, while the respondent relied on contractual clauses that purportedly excluded certain claims from arbitration. The Delhi High Court, while exercising powers under Section 11 of the Arbitration and Conciliation Act, 1996, appointed an arbitral tribunal but simultaneously excluded claims under paras 48(ii), (iii), and (iv) of the claim petition on the ground that they fell within excepted matters under Clause 50 and 50.2 of the contract.

This judicial exclusion of claims prompted the appeal before the Supreme Court, which was tasked with determining the scope of judicial inquiry at the stage of appointment of arbitrators. The controversy stemmed from Section 11(6A), inserted by the 2015 amendment to limit judicial review to the existence of an arbitration agreement, and the unnotified omission of this sub-section by the 2019 amendment. The interplay between judicial intervention and arbitral autonomy has long been debated in Indian jurisprudence, particularly in light of conflicting dicta in Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1 and subsequent rulings.

The Supreme Court, in line with its consistent approach to promoting arbitration as an effective dispute resolution mechanism, had to resolve whether courts at the referral stage could examine arbitrability or whether such issues must be left to the arbitral tribunal under the doctrine of kompetenz-kompetenz. This judgment thus carries significant implications for arbitral practice in India, reinforcing the principle of limited court interference.

D) FACTS OF THE CASE

The appellant, Office for Alternative Architecture, entered into an agreement with the respondent, IRCON Infrastructure and Services Ltd., for consultancy and allied architectural services. The agreement contained an arbitration clause providing for settlement of disputes through arbitration. Disputes arose, leading the appellant to file a claim petition invoking arbitration. In this claim petition, multiple heads of claims were raised, including those challenged as non-arbitrable by the respondent.

The Delhi High Court, in ARBP No. 1425 of 2022, acknowledged the existence of a valid arbitration agreement but excluded specific claims mentioned in para 48(ii), (iii), and (iv) of the petition. The exclusion was based on Clause 50 and 50.2 of the agreement, which categorized certain matters as excepted from arbitration. The High Court proceeded to appoint an arbitral tribunal for the remaining claims.

Aggrieved by this partial exclusion, the appellant approached the Supreme Court, arguing that the High Court’s approach was contrary to Section 11(6A) of the Arbitration Act, which mandated that the court’s role is limited to confirming the existence of an arbitration agreement. The appellant maintained that arbitrability of claims was within the jurisdiction of the arbitral tribunal.

The respondent, however, argued that the High Court had acted within its powers by excluding claims not arbitrable under the agreement, relying heavily on Emaar India Limited v. Tarun Aggarwal Projects LLP (2023) 13 SCC 661. The respondent’s position was that claims falling within excepted matters were beyond the tribunal’s jurisdiction and could be identified by the court at the referral stage.

The Supreme Court thus had to decide the narrow but significant issue of the permissible scope of judicial examination under Section 11 when faced with questions of non-arbitrable claims.

E) LEGAL ISSUES RAISED

i) Whether the scope of judicial inquiry under Section 11 of the Arbitration and Conciliation Act, 1996 is confined to examining the existence of an arbitration agreement.

ii) Whether, at the stage of appointment of an arbitrator, the Court can exclude claims deemed to be non-arbitrable or falling within excepted matters of the contract.

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the appellant submitted that the High Court erred in excluding specific claims from arbitration. It was argued that under Section 11(6A) of the Arbitration Act, the referral court is confined solely to determining whether an arbitration agreement exists. The legislative intent, as seen in the 2015 amendment, was to minimize judicial intervention at the referral stage. Once the arbitration clause was acknowledged as valid, the entire claim petition should have been referred to the arbitral tribunal.

The appellant further relied on the judgment in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 (2023 INSC 1066), where a seven-judge bench held that courts must restrict themselves to examining the prima facie existence of an arbitration agreement and leave all other issues to the tribunal. It was emphasized that allowing the court to bifurcate claims undermines the competence-competence principle and delays arbitration proceedings.

Reliance was also placed on SBI General Insurance Co. Ltd. v. Krish Spinning (2024 INSC 532), where the Supreme Court clarified that issues such as non-arbitrability must be left to the arbitral tribunal, and that the referral court’s jurisdiction does not extend to weeding out claims at the Section 11 stage. The appellant thus urged that the High Court’s order be set aside and all claims be referred to arbitration, leaving the respondent free to raise non-arbitrability before the tribunal.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondent contended that the High Court’s approach was justified, as certain claims expressly fell within excepted matters under Clause 50 and 50.2 of the agreement. It was argued that when a contract clearly excludes specific matters from arbitration, the court, at the Section 11 stage, is competent to identify and exclude such claims to prevent futile arbitral proceedings.

Reliance was placed on Emaar India Limited v. Tarun Aggarwal Projects LLP (2023) 13 SCC 661, where the Supreme Court held that non-arbitrable claims may be excluded at the referral stage itself. The respondent submitted that the High Court was therefore correct in partially appointing the tribunal while excluding certain claims.

The respondent emphasized that permitting the arbitral tribunal to adjudicate matters explicitly excluded under the contract would amount to rewriting the terms of the agreement, contrary to the principle of party autonomy in arbitration. The High Court’s intervention was portrayed as necessary to uphold contractual sanctity and to avoid unnecessary arbitral proceedings.

H) RELATED LEGAL PROVISIONS

i) Section 11, Arbitration and Conciliation Act, 1996 – Appointment of arbitrators.
ii) Section 11(6A) – Restriction on court’s scope to existence of arbitration agreement (inserted by 2015 amendment, omitted by 2019 amendment but not yet notified).
iii) Doctrine of kompetenz-kompetenz – Arbitral tribunal’s power to rule on its jurisdiction, including arbitrability of disputes (Section 16, Arbitration Act).
iv) Clause 50 and 50.2 of the Agreement – Excepted matters clause excluding certain disputes from arbitration.

I) JUDGEMENT

The Supreme Court, per Justice Manoj Misra, allowed the appeal. The Court held that the High Court had exceeded its jurisdiction under Section 11 by excluding specific claims as non-arbitrable. It reaffirmed that under Section 11(6A), the referral court’s role is confined to examining the existence of an arbitration agreement, and not to determine arbitrability of claims.

The Court referred to the 2015 amendment and its statement of objects and reasons, which emphasized speedy disposal of Section 11 applications within 60 days and restricted judicial scrutiny to prima facie existence of an arbitration agreement. It cited the seven-judge bench ruling in In Re: Interplay (2023), which clarified that courts must avoid unnecessary interference in arbitration by adjudicating issues of validity or arbitrability at the referral stage.

The Court also relied on SBI General Insurance v. Krish Spinning (2024), a three-judge bench decision that reaffirmed the limited scope of Section 11. By contrast, it rejected reliance on Emaar India Limited v. Tarun Aggarwal Projects LLP (2023), holding that the latter, being a two-judge bench decision, could not override the larger bench’s interpretation.

Accordingly, the Supreme Court set aside the Delhi High Court’s order excluding claims under para 48(ii), (iii), and (iv) of the claim petition. It clarified that the respondent remains free to raise objections on non-arbitrability before the arbitral tribunal, which shall decide the matter uninfluenced by the High Court’s earlier observations.

a. RATIO DECIDENDI

The ratio decidendi of the judgment is that under Section 11 of the Arbitration and Conciliation Act, 1996, the court is confined to ascertaining the existence of an arbitration agreement, and cannot adjudicate upon the arbitrability of claims. Judicial intervention at the referral stage is minimal, and issues such as excepted matters or non-arbitrability fall within the jurisdiction of the arbitral tribunal under Section 16.

This ratio aligns with the doctrine of competence-competence, ensuring that arbitral tribunals retain primary jurisdiction over questions of arbitrability, subject to limited post-award judicial review. The Court’s reliance on larger bench rulings in In Re: Interplay (2023) and SBI General Insurance (2024) reflects a consistent pro-arbitration jurisprudence aimed at reducing judicial delay and promoting efficiency in dispute resolution.

b. OBITER DICTA

In its observations, the Court highlighted the significance of legislative intent behind Section 11(6A). Although the provision was omitted by the 2019 amendment, the omission has not been notified, and therefore the sub-section continues to govern judicial conduct under Section 11. This dicta reinforces the principle that unnotified amendments do not alter statutory provisions.

The Court further observed that contractual clauses excluding arbitration cannot be mechanically enforced at the referral stage, since arbitrability involves factual and legal determinations best suited for arbitral adjudication. These dicta, though not forming the core ratio, provide important interpretive guidance for future Section 11 proceedings.

c. GUIDELINES

The Court, while not issuing formal guidelines, laid down certain principles for Section 11 proceedings:

i) Referral courts must restrict inquiry to the prima facie existence of an arbitration agreement.
ii) Arbitrability of claims, including excepted matters, should ordinarily be left to the arbitral tribunal under Section 16.
iii) Larger bench decisions such as In Re: Interplay (2023) prevail over conflicting dicta of smaller benches like Emaar India (2023).
iv) Legislative amendments not notified cannot be treated as enforceable law.
v) Judicial minimalism at the referral stage is essential to preserve arbitral autonomy and efficiency.

J) CONCLUSION & COMMENTS

The judgment strengthens the arbitration-friendly framework in India by reiterating the limited scope of judicial interference under Section 11 of the Arbitration Act. By setting aside the Delhi High Court’s exclusion of certain claims, the Supreme Court emphasized the doctrine of competence-competence and reinforced the principle that issues of arbitrability must be determined by arbitral tribunals, not by referral courts.

The ruling harmonizes Indian arbitration jurisprudence with international standards under the UNCITRAL Model Law, which advocates minimal judicial scrutiny at the stage of referral. By clarifying the continuing effect of Section 11(6A) until formally omitted by notification, the Court also resolved interpretive uncertainty surrounding the 2019 amendment.

In effect, the judgment promotes arbitral efficiency, respects party autonomy, and curtails judicial intervention. It underscores the Supreme Court’s consistent pro-arbitration stance, following landmark rulings in Vidya Drolia, Interplay Case, and Krish Spinning. The decision is significant for contract drafters, arbitral practitioners, and courts, as it provides clarity on the boundaries of Section 11 jurisdiction and fortifies India’s evolving arbitration regime.

K) REFERENCES

a. Important Cases Referred

i. In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, 2023 INSC 1066.
ii. SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532.
iii. Vidya Drolia v. Durga Trading Corporation, (2021) 2 SCC 1.
iv. NTPC v. SPML Infra Limited, (2023) 9 SCC 385.
v. Emaar India Limited v. Tarun Aggarwal Projects LLP, (2023) 13 SCC 661.

b. Important Statutes Referred

i. Arbitration and Conciliation Act, 1996 – Sections 11, 16.
ii. Arbitration and Conciliation (Amendment) Act, 2015 – Section 11(6A).
iii. Arbitration and Conciliation (Amendment) Act, 2019.
iv. UNCITRAL Model Law on International Commercial Arbitration.