In a petition filed before the Delhi High Court against an order dated 10-12-2025 passed by the Arbitral Tribunal whereby the petitioner’s application under Section 16 of the Arbitration and Conciliation Act, 1996 was held to be not maintainable, a Single Judge Bench of Justice Girish Kathpalia upheld the impugned order and directed the Arbitral Tribunal to record complete evidence and then take a decision on the objections under Section 16, before proceeding on the merits of the dispute.
The petitioner filed an application under Section 16 of the Arbitration and Conciliation Act, 1996 (A&C Act), contending that the relationship between the parties was governed solely by a letter of intent dated 31-10-2002 and that there was no dealership agreement dated 13-03-2018 or 25-07-2003 containing an arbitration clause.
The petitioner contended that since the jurisdiction of the Arbitral Tribunal depends upon the existence of a valid arbitration agreement, and the same was not mentioned in the letter of intent, the Arbitral Tribunal had no jurisdiction. The Arbitrator opined that whether the dealership agreements dated 13-03-2018 and 25-07-2003 do not bear signatures and seals of the parties could be dealt with in trial, and that the arbitral proceedings cannot be terminated without allowing the claimant to prove the said dealership agreements.
Concerning whether the jurisdiction of the Arbitral Tribunal should be treated as a preliminary issue, the Court stated that the answer was conveyed by Surendra Kumar Singhal & Ors. v. Arun Kumar Bhalotia & Ors. 2021 SCC OnLine Del 3708, wherein it was said that “detailed evidence needs to be led both written and oral, then after the evidence is concluded, the objections under Section 16 would have to be adjudicated first before proceeding to passing of the award.”
Thus, the Court upheld the impugned order and directed the Arbitral Tribunal to record complete evidence from both sides and thereafter to decide the objection under Section 16 before proceeding to the merits of the dispute. Lastly, the Court clarified that the final decision on the issue under Section 16 of the Act is yet to be taken based on the evidence led by both sides.
Appearances:
For Petitioner – Mr. Riju Raj Singh Jamwal, Ms. Madhusmita Bora, Mr. Bijoy Kumar Pradhan
For Respondent – Mr. Rahul Malhotra, Ms. Padamja Sharma, Mr. Aryan Jha
