Nuflower Foods vs Sonic Biochem - Arbitration Appointment

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Nuflower Foods And Nutrition Private ... vs Sonic Biochem Extractions Pvt Limited on 25 March, 2026

$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 25.03.2026
+ ARB.P. 2125/2025
NUFLOWER FOODS AND NUTRITION PRIVATE
LIMITED .....Petitioner
Through: Mr Anuj Berry, Mr. Sourabh
Rath, Ms. Gauri Pasricha and
Ms. Jayati Sinha, Advocates
versus
SONIC BIOCHEM EXTRACTIONS PVT LIMITED
.....Respondent
Through: Ms. Preena Salgia Sethi,
Advocate
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR

                      %                         JUDGEMENT (ORAL)
                      I.A. 7990/2026 (Delay of 8 days in filing the reply)
                      1.     The present application, under section 151 of the Civil
                      Procedure, 1908, has been filed by the Respondent seeking the
                      condonation of the delay of 08 days in filing the Reply to the present
                      petition.
                      2.     For the sufficient reasons stated in the application, the same is
                      allowed. Let the Reply form part of the record.
                      3.     The present application stands disposed of.
                      ARB.P. 2125/2025
                      4.     The present petition has been filed under [Section 11](https://indiankanoon.org/doc/1841764/) of the
                      Arbitration and Conciliation Act, 1996 ["the Act"], seeking the
                      appointment of Sole Arbitrator to adjudicate the disputes between the
                      parties in terms of Clause 16.4 of the Purchase Orders dated

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ARB.P. 2125/2025 Page 1 of 9
By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
18.08.2022 (bearing PO No. NFN/PO/22-23/0359-1), 30.08.2022
(bearing PO No. NFN/PO/22-23/0394) and 29.09.2022 (bearing PO
No. NFN/PO/22- 23/0523) ["POs"].
5. The said POs contain an Arbitration Clause, being Article 16.4,
which reads as under:
"16 Force Majeure
xxxxx
4. Arbitration - Any dispute arising out of or in connection with
this PO shall be settled by Arbitration in accordance with the Arbitration and Conciliation Act, 1996. The arbitration proceedings
shall be conducted in English in New Delhi by the sole arbitrator
appointed by the Buyer. The cost of arbitration shall be shared
equally between the parties unless decided otherwise by the
arbitrator."

                      6.         The material on record indicates that the Petitioner herein
                      invoked arbitration in terms of [Section 21](https://indiankanoon.org/doc/138599/) of the Act vide legal notice
                      dated 02.10.2025.
                      7.         Ms. Preena Salgia Sethi, learned counsel for the Respondent
                      enters appearance and raises an objection to the present Petition. She
                      submits that, subsequent to the issuance of the POs, the goods were
                      duly supplied, and such supplies were accompanied by certain tax
                      invoices. It is her contention that the said tax invoices stipulate that
                      any disputes arising therefrom would be subject to the jurisdiction of
                      courts at Indore, Madhya Pradesh.
                      8.         She further relies upon the Judgment dated 06.12.2022 passed
                      by the High Court of Karnataka at Bengaluru in M/s CMS Computers
                      Ltd v. M/s Info Technologies Pvt. Ltd1., particularly paragraphs 3, 4,
                      and 5, which read as follows:

                      1
                          Civil Revision Petition No. 320/2022

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
"3. The case of the petitioner is that as per the request of the
petitioner, respondent has supplied the materials from Chennai to
New Delhi and there was no transaction in Bangalore. It is further
contended that the petitioner who is the defendant No. 1, is
registered in Mumbai. It is also contended that as per the terms and
conditions of the contract between the petitioner and respondent, in
case of any dispute between them, the Courts in Mumbai alone has
jurisdiction and that the trial Court erred in not appreciating the
same. The attention of this Court is drawn towards towards the
purchase order, which is filed along with the plaint. The purchase
order is issued by the petitioner herein and in the said purchase
order it is mentioned that the Courts in Mumbai shall have
exclusive jurisdiction to decide any dispute between the parties.
Further from the purchase order as well as the tax invoice filed
along with the plaint, shows that the plaintiff is situated at Chennai
and defendant No.1 is situated at Mumbai. However, the
respondent submits that the purchase order is only an offer made
by the petitioner and that was not the accepted in toto by the
respondent and the respondent when supplied the goods to the
petitioner issued the tax invoices which are also filed along with
the plaint and it is subsequent to the purchase order issued by the
petitioner and it clearly mentions that any dispute is subject to the
jurisdiction of the Bangalore Courts. It is submitted that the same
has been accepted by the petitioner and he has received the said
goods and made the payments also in accordance with the said tax
invoice issued by the respondent and what has been acted upon by
the parties is as per the terms and conditions mentioned in the tax
invoice and not the purchase order. For the said reason, the
respondent prays that the Courts in Bangalore have territorial
jurisdiction to deal with the case and justifies the order passed by
the trial Court and prays for dismissal of the petition.

                             4.       Admittedly, the petitioner has issued a purchase order
                             requesting the respondent to supply certain commodities to it. The
                             address in the said purchase order discloses that the petitioner is
                             situated in Mumbai and respondent is situated at Chennai. The said
                             purchase order also states that any dispute shall be subject to the
                             Courts situated at Mumbai. However, reading of the plaint and the
                             tax invoice produced along with the plaint discloses that the parties
                             have not acted strictly in accordance with the purchase order and
                             when the goods have been supplied, the tax invoice has been issued
                             by the respondent herein, which alters some of the terms and
                             conditions mentioned in the purchase order and one such condition
                             is that the dispute being subject to the jurisdiction of Bangalore."

                      9.     She further submits that a reading of the said paragraphs would

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
make it evident that, the subsequent issuance of tax invoices and
which invoices confer jurisdiction upon a place other than the place
mentioned in the prior document, i.e., the POs, would necessarily
imply that it is the jurisdiction clause, which is set out in the
subsequent documents, which would prevail.
10. This Court is of the view that the ratio of the judgment relied
upon is to the effect that the subsequent invoice had materially altered
some of terms and conditions of the POs as initially agreed between
the parties. Furthermore, the High Court of Karnataka has also held
that the purchase orders only constituted an offer and therefore, till
such time the transaction was not effected, there was no acceptance,
thereby leading to the conclusion that the invoices were the
culmination of the agreement and represented the concluded Contract
as agreed between the parties and in view of which, the jurisdiction
clause as set out in the said invoices would be binding upon the
parties. Since, in the present case, the facts are different insofar as
there appears to be no material alteration or breach of the terms and
conditions agreed between the parties and the tax invoice is only in
furtherance of the carrying out of the terms and conditions of the POs,
the jurisdiction clause contained in the POs would prevail.
11. In view of the aforesaid discussion, this Court is of the
considered opinion that the jurisdiction clause contained in the POs
shall prevail. Consequently, the objection raised by the Respondent
with respect to territorial jurisdiction is liable to be rejected, and the
jurisdiction of the arbitration shall be at New Delhi.
12. At this juncture, it is apposite to note that the legal position
governing the scope and standard of judicial scrutiny under Section

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
11(6) 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
Spinning2, after taking into consideration the authoritative
pronouncement of the seven-Judge Bench in Interplay Between
Arbitration Agreements under Arbitration Act, 1996 & Stamp
Act, 1899, In re3, comprehensively delineated the contours of judicial
intervention at the stage of Section 11 of the Act. The excerpt of Krish
Spg (supra) reads as under:-
"(c) Judicial interference under the 1996 Act
110. 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
party, to resolve the deadlock between the parties in appointing the
arbitrators.
111. 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.
112. 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.

                      2
                          (2024) 12 SCC 1
                      3
                          (2024) 6 SCC 1

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
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.
113. The scope of examination under Section 11 (6-A) is confined
to the existence of an arbitration agreement on the basis of Section
7. 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.
114. 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.
115. 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.
****
117. 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
1.
****

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
119. 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.
120. 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.
122. 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.
*****
126. 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.

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
16:30:41
127. 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.
128. 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)

                      13.    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 a valid 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.
                      14.    Material on record indicates that the valuation of the present
                      dispute is stated to be approximately Rs. 70 Crores.
                      15.    Learned counsel appearing for the Petitioner submits that the

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By:HARVINDER KAUR
BHATIA
Signing Date:27.03.2026
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matter may be referred to arbitration by Sole Arbitrator under the
aegis of the Delhi International Arbitration Centre ["DIAC"].
16. Accordingly, this Court requests Hon'ble Mr. Justice Madan
B. Lokur, Former Judge of Hon'ble Supreme Court
to enter into the reference and adjudicate the
disputes as between the parties.
17. The arbitration would take place under the aegis of the 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.
18. The learned Arbitrator is also requested to file the requisite
disclosure under Section 12 (2) of the Act within a week of entering of
reference.
19. The Registry is directed to send a receipt of this order to the
learned Arbitrator through all permissible modes, including through e-
mail.
20. 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.
21. 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.
22. Accordingly, the present petition, along with all pending
application(s), if any, is disposed of.

                                         HARISH VAIDYANATHAN SHANKAR, J. MARCH, 25, 2026/ rk/va