Consortium Members and Section 11 Referrals: Prima Facie “Party” Status and Deference to the Arbitral Tribunal – Commentary on APGENCO v. Tecpro Systems Ltd.

Consortium Members and Section 11 Referrals: Prima Facie “Party” Status and Deference to the Arbitral Tribunal – Commentary on M/s APGENCO v. Tecpro Systems Ltd.

I. Introduction

The Supreme Court’s decision in M/s Andhra Pradesh Power Generation Corporation Ltd. (APGENCO) v. M/s Tecpro Systems Ltd. & Ors., 2025 INSC 1447 (decided on 17 December 2025), squarely addresses an increasingly common problem in large infrastructure projects: when works are awarded to a consortium, can an individual consortium member unilaterally invoke arbitration, or must all members act jointly as the “contractor”?

The appeal arose from an order under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Act, 1996”), by which the High Court of Telangana had constituted an Arbitral Tribunal (AT) on the request of Tecpro Systems Ltd., one member of a three‑company consortium. The employer, APGENCO, and another consortium member, VA Tech Wabag Ltd., challenged Tecpro’s capacity to invoke arbitration in its individual capacity.

The Supreme Court upheld the High Court’s order, but in doing so, it did not decide whether Tecpro in fact has the substantive right to arbitrate on its own. Instead, the Court reaffirmed and sharpened the boundary between:

  • the referral court’s limited prima facie enquiry under Section 11; and
  • the Arbitral Tribunal’s full jurisdictional inquiry under Section 16 (kompetenz‑kompetenz).

The core holding is that, at the Section 11 stage, when a consortium member seeks reference, the court’s role is confined to deciding whether there is at least a prima facie basis to treat that member as a “party” to the arbitration agreement. All detailed objections—about the consortium structure, authority, insolvency, leadership changes, and maintainability—must be left to the arbitral tribunal.

II. Factual Matrix

The essential facts can be summarised as follows:

  1. Tender and Consortium Formation
    APGENCO invited bids for an EPC contract for works at its Rayalaseema Thermal Power Plant. The tender documents included:
    • Instructions to Bidders (IB), and
    • General Conditions of Contract (GCC), which contained an arbitration clause (Clause 22.2).
    A three‑member consortium was formed on 17.08.2010 exclusively for participating in this tender:
    • M/s Tecpro Systems Ltd. – initial Lead Member,
    • M/s VA Tech Wabag Ltd., and
    • M/s Gammon India Ltd.
    The consortium’s bid succeeded. APGENCO issued a Letter of Intent on 30.10.2010 addressed to the consortium through Tecpro as lead member.
  2. Purchase Orders and Performance
    Thereafter, on 15.12.2010, three Purchase Orders were issued in favour of the consortium. Execution began, with each member performing its allocated scope of work.
  3. Change of Lead Member and Financial Distress
    Tecpro ran into serious financial difficulties, causing delays. VA Tech Wabag, being jointly and severally liable as a consortium member, stepped in and took over Tecpro’s scope of work. APGENCO recognised VA Tech as new Lead Member by letter dated 04.04.2014. The Consortium Agreement was accordingly amended.

    Interestingly, for “administrative purposes”, billing continued in the name of Tecpro, but payments were routed directly to each member in agreed proportions.
  4. Insolvency of Tecpro
    Tecpro was admitted into Corporate Insolvency Resolution Process (CIRP) on 07.08.2017, and later liquidation was ordered.
  5. Disputes and Invocation of Arbitration
    On 04.10.2017, APGENCO wrote to Tecpro complaining of substantial delays. Tecpro responded denying default and alleging APGENCO’s breaches, claiming losses of approximately Rs. 1951.59 crores. By letter dated 11.12.2017, Tecpro:
    • raised this claim, and
    • stated that, if APGENCO disputed the claim, the letter be treated as a notice invoking arbitration under the GCC.
    APGENCO rejected the allegations and asserted its own counterclaims. Gammon India simultaneously objected that Tecpro was acting unilaterally without consortium authority.

    On 03.04.2018, Tecpro sent a formal notice invoking arbitration, nominated a former Supreme Court Judge as its arbitrator, and called upon APGENCO to appoint its arbitrator. APGENCO did not respond or participate in constituting the tribunal.
  6. Section 11 Application
    Tecpro filed an application under Section 11(6) before the High Court of Telangana for constitution of an Arbitral Tribunal. APGENCO and VA Tech Wabag opposed the application, asserting that:
    • the arbitration agreement was only with the consortium as a whole, and
    • Tecpro, as an individual member (and no longer lead member, and now insolvent), had no capacity to invoke arbitration alone.
    The High Court nonetheless allowed the application and constituted an Arbitral Tribunal. This order was challenged in the present appeals.

III. Issues Before the Supreme Court

Although many arguments were raised, the Supreme Court deliberately limited what it decided at the referral stage. The key legal issues can be structured as follows:

  1. Existence of Arbitration Agreement:
    Whether there was an arbitration agreement binding APGENCO at all, given that:
    • the arbitration clause was in the GCC (a tender document), and
    • the subsequent Purchase Orders contained only a jurisdiction clause (Hyderabad/Secunderabad courts) and were silent on arbitration.
    (This aspect was largely not disputed at this stage; both sides effectively accepted that an arbitration clause existed via the GCC.)
  2. Who Is the “Party” to the Arbitration Agreement?
    Whether, on a proper construction of the tender, GCC and Consortium Agreement:
    • the “Contractor”/“party” for purposes of Clause 22.2 (arbitration) was only the consortium as a collective unit; or
    • individual consortium members (such as Tecpro) could also be considered “parties” and could independently invoke arbitration.
  3. Scope of Judicial Review under Section 11(6) read with 11(6A):
    Whether the High Court, at the referral stage, ought to have:
    • decided, finally and conclusively, that Tecpro lacked capacity/authority to invoke arbitration; or
    • limited itself to a prima facie assessment of whether Tecpro may be a “party” to the arbitration agreement, leaving all detailed issues (authority, consortium structure, leadership changes, insolvency, maintainability) to the arbitral tribunal under Section 16.
  4. Effect of Consortium and Insolvency:
    How Tecpro’s loss of lead member status and its subsequent insolvency/liquidation affect:
    • its standing to invoke arbitration, and
    • the continued existence or dissolution of the consortium.
    (The Supreme Court pointedly did not finally decide these issues; it treated them as issues for the Tribunal.)

IV. Summary of the Judgment

The Supreme Court dismissed the appeals and upheld the High Court’s order constituting the Arbitral Tribunal. The Court’s essential conclusions are:

  • Existence of Arbitration Agreement: There was prima facie an arbitration agreement binding APGENCO, arising from Clause 22.2 of the GCC, which governed disputes under the EPC project. This aspect was “neither seriously disputed nor refutable at this stage”.
  • Consortium Member’s Status at Section 11 Stage: Whether an individual consortium member like Tecpro is a “veritable party” to the arbitration agreement and has the right to invoke arbitration in its own name is a mixed question of fact and law. It requires examination of:
    • the tender and GCC,
    • the Purchase Orders,
    • the Consortium Agreement (and amendments), and
    • surrounding conduct (payments, allocation of work, leadership changes, insolvency, etc.).
    At the Section 11 stage, the court can only ask whether there is a prima facie basis to treat Tecpro as a “party” to the arbitration agreement. If such a basis exists, the matter must be referred to arbitration.
  • Role of the Referral Court – Section 11(6A): Citing the Constitution Bench in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, and earlier authorities like Duro Felguera, the Court held that:
    • The referral court’s enquiry is confined to a prima facie “examination of the existence” of an arbitration agreement;
    • It cannot conduct a “mini‑trial” into disputed questions of authority, capacity, maintainability or arbitrability; and
    • Detailed jurisdictional objections, including whether a consortium member is indeed a true party, belong before the Arbitral Tribunal under Section 16.
  • Deference to Arbitral Tribunal (Kompetenz‑Kompetenz): Relying heavily on Cox & Kings Ltd. v. SAP India Pvt. Ltd., the Court emphasised that when issues relate to:
    • whether a non‑signatory (or entity not expressly named) is a “veritable party” to an arbitration agreement, or
    • whether a party had authority or capacity to invoke arbitration,
    the referral court should:
    • only check for prima facie existence of the arbitration agreement and a plausible link to the party, and
    • leave the final ruling on party status and jurisdiction to the arbitral tribunal under Section 16.
  • Application to the Present Case: Given the admitted existence of an arbitration clause and the complex factual matrix (consortium structure, shifting leadership, payments, insolvency):
    • there was clearly a prima facie case for reference to arbitration; and
    • questions such as:
      • whether Tecpro validly invoked arbitration in its individual capacity,
      • whether the consortium still exists,
      • whether consent of other consortium partners was necessary, and
      • whether claims are maintainable post‑liquidation,
      must all be decided by the Arbitral Tribunal under Section 16.
  • Outcome: The Supreme Court held that the High Court “has not committed any error” in constituting the Arbitral Tribunal, and dismissed the civil appeals without costs.

V. Detailed Analysis

A. Statutory Framework: Sections 11 and 16

The decision rests squarely on the interplay between:

  • Section 11 – appointment of arbitrators by the court; and
  • Section 16 – the arbitral tribunal’s power to rule on its own jurisdiction (the doctrine of kompetenz‑kompetenz).

With the introduction of Section 11(6A) (by the 2015 Amendment), Parliament expressly confined the referral court’s jurisdiction to examining the “existence of an arbitration agreement”. The judgment reiterates, in line with later Supreme Court authorities, that:

  • “Existence” in Section 11(6A) is to be understood primarily in the formal sense under Section 7 (i.e., an agreement in writing, express or implied, containing or incorporating an arbitration clause).
  • The referral court conducts only a prima facie examination of existence; it does not test the agreement’s substantive validity, nor does it conclusively decide complex questions about who precisely is bound.
  • Section 16 authorises the Arbitral Tribunal to “rule on its own jurisdiction”, including objections to:
    • existence of the arbitration agreement,
    • its validity, and
    • its applicability to a given party or dispute.

The Court underscores that this division of labour is not merely formal; it is the core design of the 1996 Act’s arbitration framework, aimed at minimal judicial intervention at the pre‑arbitral stage.

B. Consortium Members as “Parties” – No Bright‑Line Rule

A central plank of the appellants’ argument was that:

  • the arbitration agreement in Clause 22.2 of the GCC is with the “Contractor”, defined to include the “person whose tender has been accepted”;
  • the “person” whose tender was accepted was the consortium (as a collective), not its individual members; and
  • therefore, only the consortium can be a “party” to the arbitration agreement, and Tecpro as an individual member lacks standing to invoke arbitration or seek a Section 11 appointment.

The Supreme Court deliberately refused to treat this as a threshold bar to a Section 11 reference. Instead, it held that:

  • The question whether a consortium member can be treated as a “party” does not admit of a uniform, one‑size‑fits‑all answer.
  • The answer necessarily depends on a detailed examination of:
    • the principal contract (tender, GCC, Purchase Orders),
    • the Consortium Agreement (and supplementary agreements),
    • the mutual rights and obligations created thereby, and
    • the conduct of the parties (allocation of scope, independent payments, representation, etc.).
  • Such a detailed examination must be left to the arbitral tribunal, not undertaken by the referral court at the Section 11 stage.

What the referral court can do is to ask a limited question: Is there a prima facie case that this consortium member might be a “party” to the arbitration agreement? If yes, the referral must be made, and the tribunal will adjudicate the issue conclusively.

C. Reaffirmation of Prima Facie Standard at Referral Stage

The Court heavily relies on the Constitution Bench in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, which clarified that:

  • The word “examination” in Section 11(6A) connotes only a limited, non‑laborious scrutiny, not a contested evidentiary enquiry.
  • The referral court must avoid turning Section 11 into a “mini‑trial” about jurisdiction, authority or merits.
  • The tribunal is the appropriate forum to “rule” on jurisdiction, including existence and validity, upon full evidence.

The present judgment reiterates and applies that framework:

  • The burden is on the party seeking referral (Tecpro) to show, prima facie, that an arbitration agreement exists and that it is at least arguably a party to it.
  • Once such a prima facie showing is made, the court must stop and refer, leaving all granular objections for Section 16.
  • The Court expressly cautions referral courts to avoid undertaking a “proof”‑level determination at the Section 11 stage.

The Court also invokes Managing Director, Bihar State Food & Civil Supply Corporation Ltd. v. Sanjay Kumar, where it was said that “the curtains have fallen” on expansive judicial review under Section 11(6) and Section 8: courts must confine themselves to examining the existence of an arbitration agreement.

D. Interaction with Key Precedents

1. Duro Felguera SA v. Gangavaram Port Ltd. (2017) 9 SCC 729

Duro Felguera was an early and influential case under Section 11(6A), emphasising that:

  • the court’s task at the referral stage is “only one thing”: to see whether an arbitration agreement exists; and
  • issues of construction, scope, and detailed arbitrability are for the tribunal.

In APGENCO v. Tecpro, the Court cites this line of authority to reinforce that:

  • once it is accepted that an arbitration clause exists (in the GCC/contract bundle),
  • the Section 11 inquiry must not expand to decide whether Tecpro’s specific capacity or authority is sufficient.

2. In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, (2024) 6 SCC 1

The Constitution Bench in Interplay clarified:

  • The referral court, under Section 11, examines only the prima facie existence of an arbitration agreement.
  • Issues of substantive validity or jurisdictional reach (including whether a specific party is bound) must generally be left to the Arbitral Tribunal under Section 16.

APGENCO v. Tecpro quotes extensively from Interplay on:

  • the meaning of “examination”,
  • the burden of proof at the referral stage, and
  • the contrast between “examination” by the court and “ruling” by the tribunal.

This reinforces the doctrinal shift towards maximum deference to arbitral tribunals on jurisdictional questions, including party status.

3. Cox & Kings Ltd. v. SAP India Pvt. Ltd. (2024) 4 SCC 1

Cox & Kings is a landmark on the “Group of Companies” doctrine and joinder of non‑signatories. In paragraphs quoted by the Court here, the Supreme Court held:

  • that a non‑signatory might become a “veritable party” through its conduct in negotiation, performance, etc., leading the counterpart to legitimately believe it is a party; and
  • that, in both scenarios—where a signatory seeks to bind a non‑signatory, or a non‑signatory seeks to invoke the arbitration clause—the Section 11 court should:
    • only undertake a prima facie assessment; and
    • leave the final determination of whether the non‑signatory is truly a party to the Arbitral Tribunal under Section 16.

APGENCO v. Tecpro uses this reasoning by analogy. Although Tecpro was a consortium member and not a classic “non‑signatory”, the question is essentially the same: is it a veritable party to the arbitration agreement? The Court holds that:

  • this is a question for the tribunal, not the referral court, to answer definitively; and
  • the referral court should only satisfy itself prima facie that Tecpro may be a party, based on the contractual matrix and conduct.

4. Managing Director, Bihar State Food and Civil Supply Corporation Ltd. v. Sanjay Kumar, 2025 SCC OnLine SC 1604 : 2025 INSC 933

In Sanjay Kumar, the Supreme Court famously observed that “the curtains have fallen” on expansive inquiries under Section 11 and Section 8, and that courts must confine themselves to the “examination of the existence of the arbitration agreement”.

The present judgment cites Sanjay Kumar approvingly to affirm that:

  • arguments about a consortium member’s capacity or authority to invoke arbitration, while potentially serious, are not to be finally adjudicated at the referral stage; and
  • these are Section 16 issues for the Arbitral Tribunal.

5. Incorporation by Reference Cases: M.R. Engineers, Inox Wind, NBCC v. Zillion

Although the Supreme Court does not go into detailed analysis, Tecpro’s submissions invoked:

  • M.R. Engineers & Contractors Pvt. Ltd. v. Som Datt Builders Ltd., (2009) 7 SCC 696;
  • Inox Wind Ltd. v. Thermocables Ltd., (2018) 2 SCC 519; and
  • NBCC (India) Ltd. v. Zillion Infraprojects Pvt. Ltd., 2024 SCC OnLine SC 323.

These cases establish that:

  • an arbitration clause in one document can be validly incorporated into another by clear reference;
  • a mere jurisdiction clause in the main contract does not negate an arbitration clause incorporated from referenced documents, and may often indicate the intended seat of arbitration.

In the present case, the existence of the arbitration clause via the GCC, as incorporated into the Purchase Orders, was not seriously contested at the Supreme Court level. The Court therefore proceeded on the basis that an arbitration agreement prima facie exists.

6. High Court Decisions on Consortium Members: Consulting Engineers v. NHAI and MSEDCL v. Godrej & Boyce

The appellants relied on:

  • Consulting Engineers Group Ltd. v. NHAI, 2022 SCC OnLine Del 3253; and
  • MSEDCL v. Godrej & Boyce Manufacturing Co. Ltd., 2019 SCC OnLine Bom 3920.

Both decisions had taken the view that an individual consortium member cannot unilaterally invoke arbitration when the contract treats the consortium as the contractor.

The Supreme Court in APGENCO v. Tecpro does not expressly overrule these decisions, but it re‑frames their relevance:

  • Such questions depend on the specific contractual framework and evidence; therefore, they are not appropriate for conclusive determination at the Section 11 stage.
  • The referral court’s task is only to see whether there is a prima facie basis to treat the applicant consortium member as a party, not to decide the matter finally.

In effect, the Court indicates that High Court decisions which treated the consortium‑member‑capacity issue as a threshold bar at the Section 11 stage must now be read subject to the Supreme Court’s insistence on the prima facie standard and deference to Section 16.

7. Earlier Supreme Court Order in TSPGCL Arbitration (Telangana Successor Entity)

The Court notes that, under an earlier order dated 29.11.2021 in Civil Appeal Nos. 7119–7120 of 2021 (involving Telangana State Power Generation Corporation Ltd. – TSPGCL), arising from the bifurcation of the same project, the Supreme Court had:

  • constituted a sole arbitrator (Justice M. B. Lokur, former Judge of the Supreme Court), and
  • directed that all claims arising out of:
    • the consortium agreement between Tecpro, VA Tech Wabag and Gammon, and
    • the project’s Letter of Intent,
    be comprehensively dealt with in arbitration.

That earlier order:

  • did not pronounce on the validity of Tecpro’s unilateral invocation; it simply ensured a comprehensive arbitral forum; and
  • left scope for all consortium members and TSPGCL to raise claims/counterclaims and jurisdictional objections before the arbitrator.

In APGENCO v. Tecpro, the Court notes that the Arbitral Tribunal in that matter did examine whether Tecpro is a veritable party, highlighting that such questions are indeed fit for arbitral adjudication rather than pre‑arbitral judicial determination.

VI. Simplifying Key Legal Concepts

1. “Existence” of an Arbitration Agreement vs. “Validity” and “Scope”

  • Existence (Section 11(6A) read with Section 7) deals with whether:
    • there is a written document, or documents read together, that contain (or incorporate) an arbitration clause, and
    • the parties before the court are at least prima facie linked to that document.
  • Validity concerns whether the arbitration agreement is legally enforceable (e.g., not void for fraud, coercion, illegality, incapacity).
  • Scope concerns whether a particular dispute or party falls within the reach of the arbitration clause.
  • The referral court looks only at prima facie existence; the tribunal decides deeper questions of validity and scope.

2. Doctrine of Kompetenz‑Kompetenz (Section 16)

  • “Kompetenz‑kompetenz” is a German term meaning “power to decide its own power”.
  • Section 16 of the Act gives the Arbitral Tribunal the authority to rule on:
    • its own jurisdiction,
    • existence and validity of the arbitration agreement, and
    • whether a party is bound by or falls within the agreement.
  • This doctrine underlies the Court’s insistence that the tribunal, not the referral court, is the correct forum for full‑scale jurisdictional disputes.

3. Consortiums and Legal Personality

  • A consortium or “joint venture” is often an unincorporated association of companies coming together for a specific project.
  • Unless constituted as a company, LLP, or some other recognised juristic person, a consortium:
    • is not a separate legal entity from its members; and
    • cannot own property, sue, or be sued in its own name, unless a statute or contractual scheme creates such capacity.
  • Cited authorities like New Horizons Ltd. v. Union of India, Dulichand Laxminarayan, and Ramanlal Bhailal Patel affirm this principle.
  • In practice, however, contracts may use the term “consortium”/“joint venture” as if it were a single contractor. That creates interpretive questions about who is the true “party” to an arbitration clause – issues which often must be resolved by the arbitral tribunal.

4. “Prima Facie” vs. “Proof”

  • Prima facie means “at first sight” or “on the face of it”. It is a low threshold.
  • At the Section 11 stage, the referral court:
    • does not decide which side is ultimately right,
    • does not weigh evidence in detail, and
    • only checks if there is a reasonable, non‑frivolous basis to say:
      • there is an arbitration agreement, and
      • the applying party might be a “party” to it.
  • “Proof” requires a full evidentiary assessment, which only the tribunal (or the court in a post‑award challenge) can undertake.

5. Group of Companies Doctrine (as context)

  • This doctrine, dealt with in Cox & Kings, addresses whether a non‑signatory affiliate can be bound by or invoke an arbitration clause.
  • Although not directly applied here, its logic—focusing on:
    • conduct in negotiation and performance,
    • legitimate expectations, and
    • whether an entity is a “veritable party”,
    is used by the Court to guide how consortium member status should be analysed by tribunals under Section 16.

VII. Impact and Practical Implications

A. For Referral Courts Under Section 11

The judgment reinforces a strictly limited role for courts at the Section 11 stage:

  • Courts must:
    • verify the prima facie existence of an arbitration agreement; and
    • ask only whether the applicant is at least arguably a party to that agreement.
  • Courts must not:
    • engage in deep fact‑finding about consortium arrangements;
    • resolve contested questions about leadership changes, default, insolvency, or inter‑se disputes among consortium members; or
    • treat such issues as jurisdictional bars at the threshold.

In short, this decision narrows the gate for Section 11 objections: if the arbitration clause exists and the applicant’s claim to be a party is not plainly untenable, the default path is to refer the matter to arbitration.

B. For Drafting and Structuring Consortium Contracts

The decision has important drafting lessons:

  • If employers (like APGENCO) genuinely intend that only the consortium acting collectively may sue or arbitrate, this should be expressly and unambiguously stated in:
    • the contract’s definition of “Contractor”,
    • the arbitration clause (e.g., “only the Consortium as such may invoke arbitration”), and
    • the consortium agreement (with reciprocal restrictions among members).
  • Conversely, if consortium members want to preserve their individual rights to arbitrate (especially where work scope and payments are separately allocated), the documentation should:
    • clearly identify each member’s independent obligations and entitlements; and
    • record that each member shall be entitled to directly enforce the arbitration clause for its scope of work.

Even with careful drafting, disputes may still arise—but this judgment makes it more likely that such disputes will be decided by tribunals rather than blocked at the threshold.

C. For Consortium Members in Financial Distress or Insolvency

Tecpro’s insolvency and loss of lead member status were central to APGENCO’s objections. The Court’s approach implies:

  • Insolvency or liquidation does not automatically extinguish a consortium member’s ability to seek arbitration in respect of alleged claims; the issue is one of maintainability and authority, to be examined by the tribunal.
  • Questions such as:
    • whether the consortium agreement treats insolvency as terminating the consortium,
    • whether rights “revert” to individual members or their “legal successors in title”, and
    • whether the liquidator has authorised the proceedings,
    are all fact‑intensive matters for Section 16.

This approach reduces the risk that employers can use insolvency complications as a threshold objection to block arbitral reference altogether.

D. For Arbitral Tribunals

Tribunals in consortium disputes will now be expected to:

  • conduct full jurisdictional hearings on:
    • whether a consortium member is a “veritable party” to the arbitration agreement, and
    • whether it had authority/capacity to invoke arbitration, especially where other consortium members oppose.
  • examine:
    • the tender and GCC,
    • Purchase Orders and letter of intent,
    • Consortium Agreement and amendments,
    • payment flows and performance responsibilities, and
    • subsequent conduct (including insolvency and leadership changes).
  • give all affected entities (including non‑applicant consortium members) a fair opportunity to raise jurisdictional objections.

Tribunals must also carefully record their findings on party status and jurisdiction, since such findings can later be challenged in a Section 34 or Section 37 proceeding.

VIII. Critical Evaluation

1. Strengthening Arbitration‑Friendliness

The judgment is strongly arbitration‑friendly. It:

  • prevents employers from using complex consortium structures as a technical shield against arbitration;
  • aligns Indian practice with international trends that favour tribunal‑centred jurisdictional decision‑making; and
  • brings consistency with the Court’s recent case law (Duro Felguera, Interplay, Cox & Kings, Sanjay Kumar) on Section 11’s narrow remit.

2. Clarity on Consortium Member Standing?

The decision does not resolve, on the merits, whether an individual consortium member can arbitrate independently in:

  • this particular contractual framework; or
  • consortium cases more generally.

Instead, it holds that such questions must be left to the Arbitral Tribunal. This is consistent with kompetenz‑kompetenz, but it does mean that parties will, in many cases, litigate these issues twice:

  • once before the tribunal (under Section 16), and
  • again in set‑aside or enforcement proceedings.

Some may argue that, in clear cases where the contract unambiguously restricts invocation to the consortium as a unit, a threshold dismissal at the Section 11 stage might save time and costs. However, in light of Section 11(6A) and recent Supreme Court jurisprudence, the Court has chosen to err on the side of referral over refusal.

3. Effect on Prior High Court Jurisprudence

By re‑casting consortium member capacity as largely a Section 16 issue, the judgment implicitly narrows the scope of High Court decisions like Consulting Engineers v. NHAI and MSEDCL v. Godrej & Boyce. They may still be relevant as persuasive authority on how consortium documentation should be interpreted, but:

  • they can no longer be treated as providing a bright‑line bar at the Section 11 stage; and
  • their reasoning is now more appropriately addressed to arbitral tribunals, not referral courts.

4. Managing Parallel Arbitral Proceedings

The earlier TSPGCL arbitration and the present APGENCO arbitration arise from related but bifurcated projects. With multiple consortium members and two state power corporations involved, there is a real risk of:

  • overlapping claims,
  • inconsistent findings on consortium status and obligations, and
  • duplicative proceedings.

The Supreme Court’s approach—encouraging comprehensive arbitral proceedings with all consortium members present (as in the TSPGCL order)— is a pragmatic way to mitigate such risks. But its success will depend heavily on:

  • the tribunal’s case management, and
  • the willingness of all parties (including non‑applicant consortium members) to participate meaningfully.

IX. Conclusion

M/s APGENCO v. Tecpro Systems Ltd. is a significant addition to Indian arbitration jurisprudence, particularly in the context of large‑scale infrastructure projects executed by consortiums. The decision lays down, in clear terms, that:

  • At the Section 11 stage, courts are confined to a prima facie examination of the existence of an arbitration agreement and the applicant’s arguable status as a “party”.
  • Complex issues about:
    • whether an individual consortium member is a true “party”,
    • whether it had authority to invoke arbitration,
    • whether the consortium has dissolved or continues, and
    • the impact of insolvency and internal consortium arrangements,
    are for the arbitral tribunal to decide under Section 16.
  • High Court decisions that treated individual consortium member applications as non‑maintainable at the threshold must now be read in light of this prima facie/referral‑friendly standard.

In doctrinal terms, the judgment further entrenches:

  • the kompetenz‑kompetenz principle,
  • the limited remit of Section 11(6A), and
  • an arbitration‑friendly policy that favours referring disputes—including complex consortium disputes—to arbitration rather than resolving threshold objections at the pre‑arbitral stage.

For practitioners and contracting parties, the message is twofold:

  1. Draft consortium and project documents with particular clarity about who may invoke arbitration and in what capacity; and
  2. Recognise that, in many cases, disputes over consortium member standing will ultimately be decided not by the referral court, but by the Arbitral Tribunal itself, subject to limited judicial review at the post‑award stage.

Case Details

Year: 2025
Court: Supreme Court Of India

Judge(s)

Justice Atul Sharachchandra ChandurkarJustice Pamidighantam Sri Narasimha

Advocates

GUNTUR PRAMOD KUMAR

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