Altf Spaces Private Limited vs Ms Dhindora Club - Arbitration Petition

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Altf Spaces Private Limited vs Ms Dhindora Club on 25 March, 2026

$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : 25.03.2026
+ ARB.P. 253/2026
ALTF SPACES PRIVATE LIMITED .....Petitioner
Through: Mr. Sadheer Aaryaan
Sadanand, Advocate.
versus

                                MS DHINDORA CLUB                                   .....Respondent
                                             Through:              Mr. Vinit Trehan, Ms. Urvi
                                                                   Syal & Mr. Yash Srivastava,
                                                                   Advocates.
                                CORAM:
                                HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
                                SHANKAR

                      %                                 JUDGEMENT (ORAL)

                      HARISH VAIDYANATHAN SHANKAR, J. 1.        The present Petition has been filed under Section 11(5) of the
                      Arbitration and Conciliation Act, 19961, seeking the appointment of
                      a Sole Arbitrator to adjudicate the disputes between the parties arising
                      out of the Customer Agreement dated 08.05.20242, executed
                      between the parties.

1. Clauses 18(i) & (j) of the said Agreement, which are the Arbitration and Jurisdiction Clauses, read as under:

"18. Miscellaneous

---

(i) Notwithstanding anything contained in the Agreement or
the Terms of Use, any dispute arising out of or in
connection with the Agreement or Terms of Use shall be

Act

Agreement

sought to be resolved and settled amicably within 30
(thirty) days of such dispute arising, failing which the
dispute shall be referred to and finally resolved by a sole
arbitrator. The Parties agree that in the event of a dispute
which needs to be resolved by arbitration, the arbitrator
shall be mutually appointed. There shall be no conflict of
interest for the chosen arbitrator with either party. The cost
of the arbitration shall be borne equally by the Parties. The
provisions of the Arbitration and Conciliation Act, 1996 shall remain applicable.

(j) All proceedings in any such arbitration shall be conducted
in English. The seat of the arbitration proceedings shall be
in Delhi and the award of the arbitrator shall be final and
binding on the Parties."
3. The material on record reflects that the notice under Section 21 of the Act invoking arbitration was issued on 10.07.2025.

1.    Learned counsel for the Respondent enters appearance and
                     submits that he has no objection if the matter is referred to arbitration.
   

2.    It is apposite to note that the legal position governing the scope
                     and standard of judicial scrutiny under [Section 11(6)](https://indiankanoon.org/doc/605764/) of the Act is no
                     longer res integra. A three-Judge Bench of the Hon'ble Supreme
                     Court in SBI General Insurance Co. Ltd. v. Krish Spinning3, after
                     taking into consideration the authoritative pronouncement of the
                     seven-Judge Bench in Interplay Between Arbitration Agreements
                     under [Arbitration Act, 1996](https://indiankanoon.org/doc/1306164/) & [Stamp Act, 1899](https://indiankanoon.org/doc/74910796/), In re4,
                     comprehensively delineated the contours of judicial intervention at the
                     stage of [Section 11of](https://indiankanoon.org/doc/1306164/) the Act. The excerpt of Krish Spg (supra) reads
                     as under:-
   

"(c) Judicial interference under the 1996 Act

1. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a

(2024) 12 SCC 1

(2024) 6 SCC 1

party, to resolve the deadlock between the parties in appointing the
arbitrators.

1. Section 11 of the 1996 Act is provided to give effect to the
   mutual intention of the parties to settle their disputes by arbitration
   in situations where the parties fail to appoint an arbitrator(s). The
   parameters of judicial review laid down for Section 8 differ from
   those prescribed for Section 11. The view taken in SBP &
   Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya
   Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature
   was legislatively overruled by the introduction of Section 11 (6-A)
   in 2015. Thus, although both these provisions intend to compel
   parties to abide by their mutual intention to arbitrate, yet the scope
   of powers conferred upon the courts under both the sections are
   different.

2. The difference between Sections 8 and 11, respectively, of the
   1996 Act is also evident from the scope of these provisions. Some
   of these differences are:

112.1. While Section 8 empowers any "judicial authority" to refer
the parties to arbitration, under Section 11, the power to refer has
been exclusively conferred upon the High Court and the Supreme
Court.

112.2. Under Section 37, an appeal lies against the refusal of the
judicial authority to refer the parties to arbitration, whereas no such
provision for appeal exists for a refusal under Section 11.
112.3. The standard of scrutiny provided under Section 8 is that of
prima facie examination of the validity and existence of an
arbitration agreement. Whereas, the standard of scrutiny under Section 11 is confined to the examination of the existence of the
arbitration agreement.

112.4. During the pendency of an application under Section 8,
arbitration may commence or continue and an award can be passed.
On the other hand, under Section 11, once there is failure on the
part of the parties in appointing the arbitrator as per the agreed
procedure and an application is preferred, no arbitration
proceedings can commence or continue.

1. The scope of examination under Section 11 (6-A) is confined
   to the existence of an arbitration agreement on the basis of Section

2. The examination of validity of the arbitration agreement is also
   limited to the requirement of formal validity such as the
   requirement that the agreement should be in writing.

3. The use of the term "examination" under Section 11 (6-A) as
   distinguished from the use of the term "rule" under Section 16 implies that the scope of enquiry under Section 11 (6-A) is limited
   to a prima facie scrutiny of the existence of the arbitration
   agreement, and does not include a contested or laborious enquiry,
   which is left for the Arbitral Tribunal to "rule" under Section 16.

The prima facie view on existence of the arbitration agreement
taken by the Referral Court does not bind either the Arbitral
Tribunal or the Court enforcing the arbitral award.

1. The aforesaid approach serves a twofold purpose -- firstly, it allows the Referral Court to weed out non-existent arbitration agreements, and secondly, it protects the jurisdictional competence of the Arbitral Tribunal to rule on the issue of existence of the arbitration agreement in depth.

1. In view of the observations made by this Court in Interplay
   Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC 1, it is clear that the
   scope of enquiry at the stage of appointment of arbitrator is limited
   to the scrutiny of prima facie existence of the arbitration
   agreement, and nothing else. For this reason, we find it difficult to
   hold that the observations made inVidya Drolia v. Durga Trading
   Corpn., (2021) 2 SCC 1 and adopted inNTPC Ltd. v. SPML Infra
   Ltd., (2023) 9 SCC 385 that the jurisdiction of the Referral Court
   when dealing with the issue of "accord and satisfaction" under Section 11 extends to weeding out ex facie non-arbitrable and
   frivolous disputes would continue to apply despite the subsequent
   decision inInterplay Between Arbitration Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC

                                                             ****
   

2. The question of "accord and satisfaction", being a mixed
   question of law and fact, comes within the exclusive jurisdiction of
   the Arbitral Tribunal, if not otherwise agreed upon between the
   parties. Thus, the negative effect of competence-competence would
   require that the matter falling within the exclusive domain of the
   Arbitral Tribunal, should not be looked into by the Referral Court,
   even for a prima facie determination, before the Arbitral Tribunal
   first has had the opportunity of looking into it.

3. By referring disputes to arbitration and appointing an
   arbitrator by exercise of the powers under Section 11, the Referral
   Court upholds and gives effect to the original understanding of the
   contracting parties that the specified disputes shall be resolved by
   arbitration. Mere appointment of the Arbitral Tribunal does not in
   any way mean that the Referral Court is diluting the sanctity of
   "accord and satisfaction" or is allowing the claimant to walk back
   on its contractual undertaking. On the contrary, it ensures that the
   principle of arbitral autonomy is upheld and the legislative intent of
   minimum judicial interference in arbitral proceedings is given full
   effect. Once the Arbitral Tribunal is constituted, it is always open
   for the defendant to raise the issue of "accord and satisfaction"

before it, and only after such an objection is rejected by the

Arbitral Tribunal, that the claims raised by the claimant can be
adjudicated.
121. Tests like the "eye of the needle" and "ex facie meritless",
although try to minimise the extent of judicial interference, yet they
require the Referral Court to examine contested facts and
appreciate prima facie evidence (however limited the scope of
enquiry may be) and thus are not in conformity with the
principles of modern arbitration which place arbitral autonomy and
judicial non-interference on the highest pedestal.

1. Appointment of an Arbitral Tribunal at the stage of Section 11 petition also does not mean that the Referral Courts forego any scope of judicial review of the adjudication done by the Arbitral Tribunal. The 1996 Act clearly vests the national courts with the power of subsequent review by which the award passed by an arbitrator may be subjected to challenge by any of the parties to the arbitration.

1. The power available to the Referral Courts has to be construed
   in the light of the fact that no right to appeal is available against
   any order passed by the Referral Court under Section 11 for either
   appointing or refusing to appoint an arbitrator. Thus, by delving
   into the domain of the Arbitral Tribunal at the nascent stage of Section 11, the Referral Courts also run the risk of leaving the
   claimant in a situation wherein it does not have any forum to
   approach for the adjudication of its claims, if its Section 11 application is rejected.

2. Section 11 also envisages a time-bound and expeditious
   disposal of the application for appointment of arbitrator. One of the
   reasons for this is also the fact that unlike Section 8, once an
   application under Section 11 is filed, arbitration cannot commence
   until the Arbitral Tribunal is constituted by the Referral Court. This
   Court, on various occasions, has given directions to the High
   Courts for expeditious disposal of pending Section 11 applications.
   It has also directed the litigating parties to refrain from filing bulky
   pleadings in matters pertaining to Section 11. Seen thus, if the
   Referral Courts go into the details of issues pertaining to "accord
   and satisfaction" and the like, then it would become rather difficult
   to achieve the objective of expediency and simplification of
   pleadings.

3. We are also of the view that ex facie frivolity and dishonesty
   in litigation is an aspect which the Arbitral Tribunal is equally, if
   not more, capable to decide upon the appreciation of the evidence
   adduced by the parties. We say so because the Arbitral Tribunal
   has the benefit of going through all the relevant evidence and
   pleadings in much more detail than the Referral Court. If the
   Referral Court is able to see the frivolity in the litigation on the
   basis of bare minimum pleadings, then it would be incorrect to

                             doubt that the Arbitral Tribunal would not be able to arrive at the
                            same inference, most likely in the first few hearings itself, with the
                            benefit of extensive pleadings and evidentiary material."
   

(emphasis supplied)

1. The decision in Krish Spinning (supra) thus unequivocally
                     reiterates that the Referral Court, while exercising jurisdiction under [Section 11](https://indiankanoon.org/doc/1841764/) of the Act, is required to confine itself to a prima facie
                     examination of the existence of an arbitration agreement and nothing
                     beyond. The Court's role is facilitative and procedural, namely, to give
                     effect to the parties' agreed mechanism of dispute resolution when it
                     has failed, without embarking upon an adjudication of contentious
                     factual or legal issues, which are reserved for the Arbitral Tribunal.
   

2. Since the learned counsel for the parties are ad idem that the
                     matter may be referred to arbitration for adjudication of disputes inter
                     se the parties, and in view of the Arbitration Clause as well as the [Section 21](https://indiankanoon.org/doc/138599/) notice, there is no impediment in referring the matter to
                     arbitration.
   

3. The value of the dispute/claims is stated to be approximately
                     Rs. 30 Lakhs.
   

4. Accordingly,       Ms.     Aaliya      Waziri,       Advocate,          (Mob:
   

9971963729), is appointed as the learned Arbitrator, to enter into
reference as a Sole Arbitrator to adjudicate the disputes between the
parties.
10. The arbitration would take place under the aegis of the Delhi
International Arbitration Centre (DIAC) and would abide by its rules
and regulations. The learned Arbitrator shall be entitled to fees as per
the Schedule of Fees maintained by the DIAC.

1. The learned Arbitrator is also requested to file the requisite

                      disclosure under [Section 12 (2)](https://indiankanoon.org/doc/1838594/) of the Act within a week of entering of
                     reference.
   

2. The Registry is directed to send a receipt of this order to the
                     learned arbitrator through all permissible modes, including through e-
                     mail.
   

3. All rights and contentions of the parties in relation to the
                     claims/counter-claims are kept open, to be decided by the learned
                     Arbitrator on their merits, in accordance with law.
   

4. Needless to say, nothing in this order shall be construed as an
                     expression of opinion of this Court on the merits of the controversy
                     between the parties. Let a copy of the said order be sent to the
                     Arbitrator through the electronic mode as well.
   

5. Accordingly, the present Petition stands disposed of.
   

HARISH VAIDYANATHAN SHANKAR, J.

MARCH 25, 2026/tk/va