Mr. Ishaan S. Sharma, Mr. Ayush and Ms. Sbhambhavi Sharma, Advs v. RUNOS HEALTH CARES ORS

Through: Mr. Ishaan S. Sharma, Mr. Ayush and Ms. Sbhambhavi Sharma, Advs. versus RUNOS HEALTH CARES & ORS. .....Respondents Through: None. CORAM: HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV JUDGEMENT PURUSHAINDRA KUMAR KAURAV, J. (ORAL) The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (the 1996 Act) by the petitioner, seeking appointment of an Arbitrator to adjudicate upon the disputes that have arisen between the parties. 2. The service affidavit has been placed on record by learned counsel for the petitioner, who contends that notices which were sent to respondent nos. 1 and 2 were refused by the said respondents. 3. However, the notice to respondent no.3 by DTDC Express Ltd. has been delivered on 11.07.2025. He also submitted that notices were sent on the E-mail address as well as on Whatsapp. The said E-mail is also forming Signature Not Verified Signed By:PRIYA Signing Date:23.08.2025 17:30:52 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV part of the invoices. 4. Under the aforesaid circumstances, the Court is left with no other option except to decide the instant petition on merit. 5. The facts of the case would reveal that on 30.04.2022, a Distributor Agreement came to be executed between the parties for supply of pharmaceutical products. 6. Learned counsel for the petitioner submits that various supplies were made to respondent no.1 and against such supply, the invoices were raised. It is further contended that respondent no.1 made part payment from time to time, however, the payment for a sum of Rs. 18,82,080/- was outstanding as on 25.01.2023. 7. Learned counsel for the petitioner, therefore, submits that once the amount was not paid to the petitioner, a legal notice dated 25.01.2023 demanding the outstanding amount was sent. Even the same, according to learned counsel, remained unanswered by the respondent. Subsequently thereto, it is stated that the respondent made payment of Rs. 4 lakhs in four equal instalments of Rs. 1 lakh each. 8. Since the remaining outstanding payment was not made, the petitioner then invoked the arbitration clause. 9. Clause 26 of the agreement dated 30.04.2022 is extracted as under: “26. Any difference or dispute arising out of or in relation to anything contained herein shall be referred to arbitration. The Arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof for the time being in force The place of arbitration shall be Delhi.”

10. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. This Court Signature Not Verified Signed By:PRIYA Signing Date:23.08.2025 17:30:52 Signature Not Verified Signed By:PURUSHAINDRA KUMAR KAURAV as well in the order dated 24.04.2025 in case of ARB.P. 145/2025 titled as Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd. has extensively dealt with the scope of interference at the stage of Section

11. The Court held as under:- “9. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. The Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish Spinning1, while considering all earlier pronouncements including the Constitutional Bench decision of seven judges in the case of Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re 2 has held that scope of inquiry at the stage of appointment of an Arbitrator is limited to the extent of prima facie existence of the arbitration agreement and nothing else.

10. It has unequivocally been held in paragraph no.114 in the case of SBI General Insurance Co. Ltd that observations made in Vidya Drolia v. Durga Trading Corpn.3, and adopted in NTPC Ltd. v. SPML Infra Ltd.,4 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 not apply after the decision of Re: Interplay. The abovenoted paragraph no.114 in the case of SBI General Insurance Co. Ltd reads as under:- facie existence of “114. In view of the observations made by this Court in In Re: Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) 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 in In Re: Interplay (supra).”

11. Ex-facie frivolity and dishonesty are the issues, which have been held to be within the scope of the Arbitral Tribunal which is equally