Case Analysis Akash Arora vs Kamlesh Devi Sharma 2026 DHC 1354

Synopsis

This judgment, delivered by a Single Judge of the Delhi High Court, deals with a petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The petitioner had previously filed a civil suit for recovery, which the respondent sought to have rejected on the ground of the existence of an arbitration clause. The petitioner withdrew the suit with liberty to pursue other remedies and then filed the present Section 11 petition. The respondent raised multiple objections, including that the petition was barred by the principles of approbation and reprobation, limitation, and that the dispute was already the subject of a prior arbitration. The High Court, applying the latest legal position from the Supreme Court, rejected these objections, confined its scrutiny to the prima facie existence of the arbitration agreement, and appointed an arbitrator.

1. Heading for the Judgment

In the High Court of Delhi at New Delhi

ARB.P. 45/2026

Akash Arora ....Petitioner
versus
Kamlesh Devi Sharma ....Respondent

Date of Decision: 16th FEBRUARY, 2026

Coram: Hon'ble Mr. Justice Harish Vaidyanathan Shankar

2. Legal Framework

This judgment operates within the following legal framework:

• The Arbitration and Conciliation Act, 1996 (The Act): This is the primary legislation governing the dispute.
  Section 11(5): The provision under which the petition was filed, empowering the High Court to appoint an arbitrator when a party fails to act as per the agreed procedure.
  Section 11(6-A): Introduced by the 2015 Amendment, which mandates that the Supreme Court or the High Court, while considering an application for appointment of an arbitrator, shall confine its examination to the existence of an arbitration agreement.
  Section 8: Empowers a judicial authority to refer parties to arbitration if an arbitration agreement exists.
  Section 16: Embodies the principle of "competence-competence," allowing the Arbitral Tribunal to rule on its own jurisdiction, including on the existence and validity of the arbitration agreement.

• The Limitation Act, 1963:
  Section 14: Provides for the exclusion of time spent in proceedings conducted in good faith in a court without jurisdiction. The court granted the petitioner the benefit of this provision.

• The Code of Civil Procedure, 1908 (CPC):
  Order VII Rule 11: The provision under which the respondent had applied for rejection of the plaint in the civil suit.
  Order XXIII Rule 1: Governs the withdrawal of suits.

• Principles of Jurisprudence:
  Approbate and Reprobate: The principle that a person cannot both accept and reject the same instrument or transaction.

Related Precedents Cited and Relied Upon:

• SBI General Insurance Co. Ltd. v. Krish Spinning (decided by a three-Judge Bench): This is the cornerstone of the judgment. The Delhi High Court extensively quoted this Supreme Court decision, which itself followed the seven-Judge Bench decision in In re: Interplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, (2024) 6 SCC 1.
  Key Holdings from Krish Spinning applied:
  The scope of examination under Section 11(6-A) is confined to the prima facie existence of an arbitration agreement.
  The Referral Court should not undertake a "contested or laborious enquiry."
  Tests like "ex facie meritless" or "eye of the needle" are inconsistent with the modern arbitration framework.
  Substantive objections, including those relating to "accord and satisfaction," limitation, and other jurisdictional issues, are for the Arbitral Tribunal to decide in the first instance.
  The negative effect of the competence-competence principle requires that matters within the exclusive domain of the Arbitral Tribunal should not be looked into by the Referral Court.

3. Basic Relevant Facts of the Case

1. The Agreement: The parties entered into an Agreement dated 15.05.2012, which was renewed periodically until 31.05.2016. Clause 12 of the Agreement contained an arbitration clause.

2. The Civil Suit: The petitioner filed a Commercial Suit [CS (COMM.) 286/2022] for recovery of Rs. 5 lakhs.

3. Respondent's Objection in Suit: The respondent filed an application under Order VII Rule 11 CPC, seeking rejection of the plaint on the ground that an arbitration clause existed. She also filed an application under Section 8 of the Act, praying that the parties be referred to arbitration.

4. Withdrawal of Suit: On 06.02.2025, the petitioner withdrew the civil suit. The court, while allowing the withdrawal, recorded that "The plaintiff shall be at liberty to pursue the available remedy as per law."

5. Prior Arbitration: The respondent informed the court that a separate arbitration had already been initiated between the parties under the same agreement, which had concluded in an award, and a petition under Section 34 challenging that award was pending. The petitioner had not filed a counterclaim in those proceedings.

6. Present Petition: Subsequently, the petitioner filed the present Section 11 petition for the appointment of an arbitrator to adjudicate his claims.

4. Issues in the Judgment

The court identified and addressed the following objections raised by the respondent:

1. Issue of Approbation and Reprobation: Whether the petitioner is barred from seeking arbitration under Section 11, having previously filed a civil suit in disregard of the arbitration clause.

2. Issue of Limitation: Whether the Section 11 petition is barred by limitation, especially since no specific liberty was granted at the time of withdrawal of the suit and a significant period had elapsed.

3. Issue of Res Judicata/Bar due to Prior Arbitration: Whether the petitioner is precluded from filing a fresh claim because he failed to raise a counterclaim in a prior arbitration proceeding between the same parties arising from the same agreement.

5. Ratio Decidendi (The Reasoning of the Court)

The court's reasoning is firmly rooted in the narrow scope of judicial interference at the Section 11 stage, as laid down by the Supreme Court in Krish Spinning.

• On Approbation and Reprobation: The court held that this principle does not apply at the Section 11 stage. Critically, the court noted that the respondent herself had filed an application under Section 8 of the Act in the civil suit, expressly seeking that the matters be referred to arbitration. The petitioner's withdrawal of the suit and filing of the Section 11 petition was, in the court's opinion, a logical consequence of the respondent's own plea and was therefore maintainable.

• On Limitation:
  Scope of Section 11: Relying on Krish Spinning, the court reiterated that the scope of enquiry in a Section 11 petition is "extremely constricted." Whether the claims themselves are barred by limitation is a "mixed question of law and facts" that falls squarely within the jurisdiction of the learned Arbitrator to decide.
  Benefit of Section 14, Limitation Act: The court also granted the petitioner the benefit of Section 14 of the Limitation Act, noting that he had bona fide pursued a civil suit, and the time spent in those proceedings could be excluded.

• On Prior Arbitration and Counterclaim:
  The court dismissed the objection by stating that "a counterclaim is in the nature of a separate suit altogether."
  The failure to raise a counterclaim in a previous arbitration does not operate as a bar or estoppel against filing a fresh claim, provided it is not otherwise barred. This is a substantive issue for the arbitrator to consider.
  The court kept this contention open for the arbitrator to decide.

• Application of Krish Spinning: The court applied the Krish Spinning ratio to its logical conclusion. Since there was a prima facie valid arbitration agreement (Clause 12 of the Agreement), the court was duty-bound to appoint an arbitrator and leave all other objections for the Arbitral Tribunal to rule upon.

6. New Legal Framework Established

This judgment does not establish a new legal principle. Its primary value lies in its meticulous and timely application of the most recent and authoritative pronouncement of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning. It serves as a practical demonstration of how High Courts must now approach Section 11 petitions in the post-Krish Spinning era.

The key takeaway reinforced by this judgment is:

• The Primacy of "Existence" over all else: The only gatekeeping function of the Referral Court is to verify if an arbitration agreement "exists." All other defences—be it limitation, accord and satisfaction, or allegations of waiver/estoppel (approbation)—are matters for the arbitrator. The court explicitly rejected the idea of applying an "ex facie meritless" test, as it would require evaluating contested facts, which is no longer permissible.

7. Examination and Analysis by the Court

The court's analysis was concise and strictly adhered to the boundaries set by the Supreme Court.

• Deferential to Legislative Intent: The court began by establishing the correct legal position through a detailed quotation from Krish Spinning, thereby defining the scope of its own jurisdiction from the outset.

• Categorical Rejection of Objections: It did not delve into the factual merits of the respondent's objections. Instead, it examined whether these objections fell within its narrow remit under Section 11. It concluded they did not, as they were either (a) not applicable at this stage (approbation), (b) factual questions for the arbitrator (limitation), or (c) substantive legal issues for the arbitrator (effect of prior arbitration).

• Focus on the Agreement: The court's positive finding was limited to verifying the existence of the arbitration clause (Clause 12). Once that was established, the path to appointing an arbitrator was clear.

• Balancing Interests: While appointing an arbitrator, the court ensured all rights and contentions of both parties were kept open, and clarified that its order expressed no opinion on the merits of the dispute, thereby protecting the respondent's right to raise all objections before the Arbitral Tribunal.

8. Critical Analysis and Final Outcome

Critical Analysis:

This judgment is a model of judicial restraint and fidelity to legislative intent and binding precedent.

• Strengths: The judgment's primary strength is its doctrinal correctness. It correctly interprets and applies the Krish Spinning decision, which itself represents the Supreme Court's strongest articulation of the pro-arbitration stance and the principle of minimal judicial intervention. By refusing to entertain substantive objections, the court upholds the negative effect of the competence-competence principle. The reasoning on the "approbation" point is particularly astute—it notes that the respondent cannot on one hand ask a civil court to send a party to arbitration under Section 8, and on the other hand tell the High Court under Section 11 that the same party is barred from seeking arbitration.

• Practical Impact: The decision provides clarity to litigants. It confirms that a party who initially makes a procedural misstep (filing a suit) can still return to the arbitral forum, especially if the other party itself invoked the arbitration clause in those proceedings. It also reinforces that limitation is primarily an arbitrator's issue, preventing it from being used as a preliminary weapon to derail arbitration at the referral stage.

• Potential Criticism: One could argue that this approach might allow a few frivolous claims to proceed to arbitration. However, as the court notes, the Act has robust mechanisms (Section 16, Section 34) to deal with frivolous claims at later stages. The benefit of ensuring that all bona fide disputes are arbitrated outweighs the risk of a few unmeritorious claims being filtered out by the arbitrator rather than the court.

Final Outcome:

The petition was allowed. The court issued the following directions:

1. Arbitrator Appointed: Mr. Shyam Sharma, Advocate, was appointed as the Sole Arbitrator.

2. Disclosures: The arbitrator was directed to furnish disclosures under Section 12(2) of the Act.

3. Fees: The arbitrator's fees would be as per the Fourth Schedule of the Act.

4. Costs: The parties were directed to share the arbitrator's fees and costs equally.

5. Rights Reserved: All rights and contentions of the parties on the merits of the claims/counterclaims were kept open to be decided by the arbitrator.

6. Disposal: The petition was disposed of in the above terms.