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Bombay High Court

Paresh Construction and Foundation Pvt LtdversusPatel Engieering Ltd

Decided
Disposal
DISPOSED OFF

Holding

The court affirmed the existence and invocation of the arbitration agreement and ordered the appointment of a sole arbitrator, declining to decide the substantive payment dispute.

Summary

The Bombay High Court entertained an application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of a sole arbitrator. Paresh Construction, a sub‑contractor, claimed that Patel Engineering had failed to pay amounts due under their subcontract agreement, which contains an arbitration clause. Patel Engineering did not dispute the existence of the arbitration agreement but argued that no liability existed because its own client, Mazgaon Dock Ltd., had not paid it. The Court held that its role is limited to determining the existence and invocation of the arbitration agreement, not the merits of the payment dispute. Accordingly, the Court appointed Ms. Apurva Gupte as the sole arbitrator and issued procedural directions for the arbitration to proceed in Mumbai.

Issues considered

  • Whether the court should entertain the application for appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.
  • Whether the existence and invocation of the arbitration agreement between the parties is established.
  • Whether the court can adjudicate the substantive payment dispute between the parties.

Legislation cited

Subjects

  • Arbitration
  • Section 11
  • Arbitration agreement
  • Appointment of arbitrator
  • Construction contract
  • Payment dispute
  • Sub‑contractor

Judgment

         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 ORDINARY ORIGINAL CIVIL JURISDICTION

                 ARBITRATION APPLICATION NO.392 OF 2026
Paresh Construction and Foundation Pvt. Ltd.                    .. Applicant
        Vs.
Patel Engineering Ltd.                                          .. Respondent


Mr. Anirudh Bhalwal with Mr. Pritesh H. Bodekar, Advocates, i/by Vyas &
Bhalwal, for the Applicant.
Mr. Ravitej Chilumuri with Ms. Antara Kalambe and Ms. Sanya Gandhi,
Advocates, i/by Khaitan & Co., for the Respondent.


                                 CORAM : GAUTAM A. ANKHAD, J.
                                 DATE         : 8th September, 2026.

P.C. :


1.       This Application seeks appointment of a sole Arbitrator under Section 11

of the Arbitration and Conciliation Act, 1996 (“the Act”). The Respondent was

engaged by Mazgaon Dock Limited (“MDL”) for carrying out certain civil,

electrical and mechanical works.



2.       The Applicant is a sub-contractor of the Respondent under the

Agreement annexed at Exhibit-A to the Application (“Agreement”). It is the

Applicant’s case that the Respondent failed to make payment of the amounts

claimed          under   the     Agreement.       Correspondence       in      this
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13-ARBAP-392-2026.doc                                                          Dixit
regard was exchanged between the parties. Clause 23 of the Agreement

contains the dispute resolution mechanism and provides for arbitration of

disputes between the parties. As the payments were not forthcoming, the

Applicant, through its Advocate’s notice dated 4th April, 2025, invoked the

arbitration agreement and called upon the Respondent to concur in the

appointment of an Arbitrator. The Respondent has not replied to the said notice

nor disputed the arbitration agreement.



3.      Mr. Chilumuri, learned counsel appearing for the Respondent, fairly

submits that there is an arbitration agreement between the parties and does not

dispute the invocation of the same by the Applicant. He, however, submits that

the Respondent has several contentions including that monies have to be paid

by MDL to the Respondent and as a result, no amount is due and payable by

the Respondent to the Applicant.



4.      Be that as it may, it is now well settled law as held by the Hon’ble

Supreme Court in Interplay between Arbitration Agreements under Arbitration

and Conciliation Act, 1996 and Stamp Act, 1899, in Re (2024) 6 SCC 1 and

followed in subsequent judgment in the case of SBI General Insurance Company

Vs. Krish Spinning, (2025) 3 SCC (Civ) 567 that a referral Court is only required

to examine the existence of an arbitration agreement and its invocation by the
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13-ARBAP-392-2026.doc                                                        Dixit
Applicant. Both these aspects are admitted in the present case. Whether any

amount is in fact due and payable, the quantum of the Applicant’s claim, and

the various defences sought to be raised by the Respondent are matters falling

within the domain of the arbitral tribunal and cannot be adjudicated upon in the

present proceedings. Hence, the Arbitration Application no. 392 of 2026 is

allowed in the following terms:-


        [A].     Ms. Apurva Gupte, learned Advocate of this Court is
                 hereby appointed as the sole Arbitrator to adjudicate upon
                 the disputes and differences between the parties arising out
                 of and in connection with Agreement referred to above. The
                 contact details the sole Arbitrator are as under:

                 Office Address : 521, 5th Floor, Commerce House,
                                  Nagindas Master Road, Kala Ghoda,
                                  Mumbai – 400 001.

                 Mobile Number : 98207 12185

                 E-mail ID        : [email protected]


        [B].     A copy of this order will be communicated to the learned
                 Arbitrator by the Advocate for the Applicant within a
                 period of one week from the date on which this order is
                 uploaded on the website of this Court. The Applicant shall
                 provide the contact and communication particulars of the
                 parties to the Arbitral Tribunal along with a copy of this
                 order;

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13-ARBAP-392-2026.doc                                                           Dixit
                             [C].     The learned Arbitrator is requested to forward the statutory
                                      Statement of Disclosure under Section 11(8) read with
                                      Section 12(1) of the Act to the Advocate for the Applicant
                                      so as to enable them to file the same in the Registry of this
                                      Court. The Registry of this Court shall retain the said
                                      Statement on the file of this Application and a copy of the
                                      same shall be furnished by the Advocate for the Applicant
                                      to the Respondents;

                             [D].     The parties shall appear before the learned Arbitrator on
                                      such date either on V.C. mode or at such place as indicated
                                      to obtain appropriate directions with regard to conduct of
                                      the arbitration including fixing schedule for pleadings,
                                      examination of witnesses, schedule of hearings etc.

                             [E].     The fees of the learned Arbitrator shall be as per the Fourth
                                      Schedule of the Act read with the Bombay High Court (Fee
                                      Payable to Arbitrators) Rules, 2018.

                             [F].     All issues, claims and counterclaims are kept open to be
                                      agitated before the Tribunal.

                             [G].     The arbitration shall be held at Mumbai.




                                                                          [ GAUTAM A. ANKHAD, J. ]



        Digitally
        signed by
        SNEHA                                                   4/4
SNEHA   ABHAY
ABHAY   DIXIT        13-ARBAP-392-2026.doc                                                            Dixit
DIXIT   Date:
        2026.09.08
        13:52:17
        +0530


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