Reaffirming the “Existence-Only” Test under Section 11: Courts Cannot Pre-Screen Claims for Arbitrability

Introduction

In Office for Alternative Architecture v. IRCON Infrastructure and Services Ltd. (2025 INSC 665), the Supreme Court of India revisited the contours of judicial intervention at the appointment stage of arbitral tribunals under Section 11 of the Arbitration and Conciliation Act, 1996 (“1996 Act”). The dispute arose out of an infrastructure contract containing an arbitration clause. When the parties failed to constitute the tribunal, the Delhi High Court invoked its powers under Section 11 to appoint arbitrators but simultaneously excluded certain heads of claim (para 48(ii)–(iv) of the claim petition) as “non-arbitrable/excepted matters” in view of contractual clauses 50 and 50.2. The appellant contended that such pre-screening overstepped the narrow enquiry mandated by Section 11(6A), whereas the respondent relied on Emaar India Ltd. v. Tarun Aggarwal Projects LLP (2023) to defend the High Court’s approach.

Summary of the Judgment

• Allowing the appeal, the Supreme Court set aside the High Court’s partial exclusion of claims.
• The Court reaffirmed that, owing to Section 11(6A), a Court seized of an appointment application must confine itself to verifying the existence of an arbitration agreement; it cannot decide issues of arbitrability or excepted matters.
• The seven-Judge ruling in In re: Interplay Between Arbitration Agreements and the Indian Stamp Act, 1899 (2023 INSC 1066) and the later three-Judge decision in SBI GENERAL INSURANCE CO. LTD. v. KRISH SPINNING (2024 INSC 532) were held to be binding, thereby eclipsing contrary dicta in the two-Judge decision of Emaar India.
• The parties remain free to raise issues of non-arbitrability before the arbitral tribunal itself.

Analysis

A. Precedents Cited and Their Influence

1. In re: Interplay (2023, 7-Judge Bench)
   • Extracted legislative intent behind Section 11(6A): courts must examine “prima facie existence of an arbitration agreement and not other issues.”
   • Emphasised minimal judicial interference as a cornerstone of the 2015 amendments.
2. SBI GENERAL INSURANCE CO. LTD. v. KRISH SPINNING (2024, 3-Judge)
   • Confirmed that the “existence-only” test survives despite earlier observations in Vidya Drolia v. Durga Trading Corp. (2021) and NTPC v. SPML Infra (2023).
   • Held that questions of accord-and-satisfaction or frivolousness are to be decided by the tribunal, not the Section 11 court.
3. Emaar India Ltd. v. Tarun Aggarwal Projects LLP (2023, 2-Judge)
   • Had allowed exclusion of non-arbitrable claims at the appointment stage.
   • The present judgment effectively limits its precedential value, ranking it below the later 3- and 7-Judge benches.
4. Earlier cases (Vidya Drolia and NTPC v. SPML) were distinguished to the extent they suggested a broader enquiry.

B. Legal Reasoning of the Court

• Statutory Anchor – Section 11(6A): Inserted by the 2015 Amendment, it commands that the Court “shall…confine” its examination to the existence of an arbitration agreement. Although omitted by the 2019 Amendment Act, the omission has not been notified; hence, sub-section (6A) is still operative.
• Hierarchy of Precedent: A later–in-time three-Judge bench, harmonising with a seven-Judge bench, prevails over earlier two-Judge dicta (Emaar). Therefore, the High Court’s reliance on Emaar was misplaced.
• Doctrine of Kompetenz-Kompetenz (Section 16): The arbitral tribunal is empowered to rule on its own jurisdiction, including on questions of arbitrability. Premature judicial interference would undermine this principle and frustrate the efficiency goals of the 1996 Act.
• Legislative Intent: Parliamentary design, as captured in the Statement of Objects and Reasons, intended to expedite referral to arbitration and reduce court dockets. By “bisecting” claims, the High Court created an avoidable pre-arbitration mini-trial.
• Practical Consideration: Differentiating claims often necessitates examination of evidence and contractual nuances — tasks better suited to the tribunal’s adversarial process.

C. Impact on Future Arbitration Law

Complex Concepts Simplified

• Section 11 (Appointment of Arbitrators): Mechanism whereby a High Court or Supreme Court steps in to appoint an arbitrator when parties fail to do so themselves.
• Section 11(6A) “Existence-Only” Test: The Court’s enquiry is limited to whether a valid arbitration agreement exists; it must not assess the merits of claims.
• Excepted Matters: Contractual provisions declaring certain disputes (e.g., rate-fixation, engineer’s certification) as final and non-arbitrable.
• Kompetenz-Kompetenz: Principle that an arbitral tribunal has the power to determine its own jurisdiction, including any objections about the scope or validity of the arbitration agreement.
• Hierarchy of Bench Strength: In Indian jurisprudence, a judgment by a larger bench (more judges) has greater precedential authority than a smaller bench, and a later judgment of equal strength prevails over earlier ones.

Conclusion

The Supreme Court’s ruling in Office for Alternative Architecture v. IRCON Infrastructure fortifies the minimalist ethos governing Section 11 proceedings. By unequivocally restricting judicial scrutiny to the existence of an arbitration agreement, the Court has:

• Re-energised the Kompetenz-Kompetenz doctrine,
• Streamlined the appointment process, and
• Provided clarity on the hierarchical value of conflicting precedents.

In the broader legal landscape, the judgment harmonises statutory intent with judicial practice, reaffirming India’s pro-arbitration stance and delivering a clear message: questions of arbitrability belong, in the first instance, to the arbitral tribunal itself.