Legal Review and Analysis of Ms Andhra Pradesh Power Generation Corporation Ltd APGENCO vs Ms Tecpro Systems Ltd & Ors 2025 INSC 1447

Case Synopsis

M/s Andhra Pradesh Power Generation Corporation Ltd. (APGENCO) vs M/s Tecpro Systems Ltd. & Ors. (2025 INSC 1447)

Synopsis: The Supreme Court reaffirmed the limited gateway role of courts in arbitration appointments. It held that under Section 11(6), a court must only be prima facie satisfied of an arbitration agreement's existence. Complex threshold objections regarding a party's capacity or right to invoke arbitration are substantive jurisdictional issues to be decided by the Arbitral Tribunal under Section 16, not at the referral stage.

1. Heading of the Judgment

• Case Name: M/s Andhra Pradesh Power Generation Corporation Limited (APGENCO) vs M/s Tecpro Systems Limited & Ors.

• Citation: 2025 INSC 1447 (Arising out of SLP (C) No. 8998 of 2023)

• Court: Supreme Court of India

• Bench: Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar

• Date of Judgment: 17th December 2025

2. Related Laws and Sections Presented in the Judgment

• The Arbitration and Conciliation Act, 1996:
  Section 11(6): Empowers the Supreme Court or the High Court to appoint an arbitrator(s) when a party fails to act as per the agreed procedure.
  Section 11(6A): Confines the Court's examination under Section 11 to only the "existence of an arbitration agreement".
  Section 16: Embodies the Kompetenz-Kompetenz principle, empowering the Arbitral Tribunal to rule on its own jurisdiction, including objections regarding the existence or validity of the arbitration agreement.

• Key Precedents on Scope of Section 11:
  Duro Felguera SA v. Gangavaram Port Ltd. (2017) 9 SCC 729
  In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Stamp Act, 1899 (2024) 6 SCC 1
  Cox and Kings Ltd. v. SAP India Pvt. Ltd. (2024) 4 SCC 1
  Managing Director Bihar State Food and Civil Supply Corporation Limited v. Sanjay Kumar (2025 INSC 933)

3. Basic Details of the Judgment

• Facts of the Case
  The Appellant, APGENCO, floated a tender for an EPC project. A Consortium comprising three companies (Respondent Nos. 1-3) was formed, with Respondent No. 1 (Tecpro) as the Lead Member.
  The Consortium was awarded the contract. The General Conditions of Contract (GCC) contained an arbitration clause (Clause 22.2).
  During execution, Tecpro faced financial distress. The Lead Member role was transferred to another consortium member, VA Tech Wabag (Respondent No. 2). Later, Tecpro went into Corporate Insolvency Resolution Process (CIRP).
  Despite this, Tecpro issued a notice invoking arbitration against APGENCO for its claims. APGENCO and the other consortium members objected, contending that an individual member could not unilaterally invoke an arbitration agreement that was with the "Consortium" as a whole.
  As APGENCO did not appoint its arbitrator, Tecpro filed an application under Section 11(6) of the Act before the High Court for appointment of an Arbitral Tribunal.
  The High Court allowed the application and appointed the Tribunal. APGENCO and VA Tech Wabag appealed to the Supreme Court.

• Issues Before the Supreme Court
  Whether, at the stage of appointment of an arbitrator under Section 11, the Court can refuse referral on the ground that an individual member of a consortium lacks the capacity to invoke an arbitration agreement executed by the consortium.
  What is the limited scope of judicial enquiry under Section 11(6) read with Section 11(6A) of the Arbitration Act?

• Ratio Decidendi (Court's Reasoning)
  Limited Scope of Section 11 Enquiry: The Supreme Court reaffirmed that the legislative mandate under Section 11(6A) confines the Court's examination at the referral stage only to a prima facie finding on the "existence of an arbitration agreement". The Court is not to embark on a mini-trial or decide contentious issues of fact or law.
  Prima Facie Existence Established: The Court held that there was no serious dispute that an arbitration clause (Clause 22.2 of GCC) existed in the contract. This satisfied the prima facie test for the purpose of Section 11.
  Complex Issues are for Arbitral Tribunal: The substantive objections raised by APGENCO—whether an individual member can invoke arbitration, the effect of the consortium agreement, the impact of insolvency, and the necessity of consent from other members—are all complex jurisdictional issues. These fall squarely within the domain of the Arbitral Tribunal to decide under Section 16, which embodies the principle of Kompetenz-Kompetenz.
  Referral Court's Role is Gateway, Not Adjudicator: The Court emphasized that the referral court's role is to act as a gatekeeper, ensuring that parties with a prima facie arbitration agreement are referred to arbitration. It is not to adjudicate on the merits of the jurisdictional challenges. Deeper scrutiny based on evidence must be left to the Tribunal.

4. Core Principle of the Judgment

Title: Gatekeeping, Not Adjudicating: The Prima Facie Test Under Section 11 of the Arbitration Act

Main Issue & Supreme Court's Address

The core issue was defining the precise boundary between the jurisdiction of a court appointing an arbitrator and that of the Arbitral Tribunal itself, particularly when complex threshold objections regarding "who" can invoke arbitration are raised.

Judicial Analysis and Rationale

The Supreme Court's analysis provides a clear demarcation of roles in the arbitral process:

• Statutory Demarcation of Roles: The judgment is built on a strict interpretation of the statutory scheme. Section 11(6A) acts as a legislative filter, intentionally limiting judicial intervention. Conversely, Section 16 empowers the Tribunal as the primary adjudicator of its own jurisdiction. The Court held that respecting this demarcation is crucial for the efficacy of arbitration, preventing courts from usurping the Tribunal's function at the very threshold.

• Prima Facie vs. Detailed Scrutiny: The Court drew a clear line between a prima facie review and a final determination. A prima facie review for "existence" under Section 11 is a limited, document-based check to see if an arbitration clause is present in the contractual matrix. The detailed scrutiny required to decide if a particular entity (like an individual consortium member) is a true "party" to that agreement involves examining consortium agreements, conduct of parties, correspondence, and factual matrices. This detailed scrutiny is the preserve of the Tribunal.

• Upholding Kompetenz-Kompetenz: The decision reinforces the doctrine of competence-competence. By referring all jurisdictional objections (including the capacity of a party to invoke arbitration) to the Tribunal, the Court strengthens the Tribunal's authority and avoids parallel litigation on jurisdictional issues before courts. This aligns with the pro-arbitration policy of minimizing judicial interference at the pre-arbitral stage.

• Rejecting a "Monolithic" Approach: The Court explicitly rejected the appellants' argument that a consortium member can never invoke arbitration individually. It held that the answer depends on a detailed enquiry into the specific contract and consortium agreement. Since such an enquiry is detailed and evidence-based, it cannot be concluded at the Section 11 stage. The referral court only needs to be prima facie satisfied that the claimant is arguably a party.

5. Final Outcome

The Supreme Court dismissed the appeals filed by APGENCO and VA Tech Wabag. It upheld the order of the High Court appointing the Arbitral Tribunal. The Court clarified that all objections regarding the maintainability of the arbitration, including the capacity of Respondent No. 1 (Tecpro) to invoke it, are left open to be raised, contested, and conclusively decided by the Arbitral Tribunal under Section 16 of the Arbitration and Conciliation Act, 1996.

6. MCQs Based on the Judgment

Question 1: According to the Supreme Court's judgment in APGENCO vs. Tecpro Systems Ltd., what is the primary and limited role of a court when appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996?
A. To conduct a detailed trial on all jurisdictional objections raised by the parties.
B. To examine the merits of the underlying dispute before referring it to arbitration.
C. To confine itself to a prima facie examination of the existence of an arbitration agreement.
D. To decide conclusively whether a non-signatory is bound by the arbitration agreement.

Question 2: In the aforementioned case, the Supreme Court held that complex objections regarding whether an individual consortium member can invoke an arbitration agreement signed by the consortium should be decided by?
A. The High Court in a writ petition.
B. The Supreme Court in a special leave petition.
C. The Arbitral Tribunal itself under Section 16 of the Arbitration Act.
D. The National Company Law Tribunal (NCLT) overseeing insolvency.