SEJAL SCALES v. AXIS BANK LIMITED

CORAM: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR JUDGEMENT (ORAL)

#1. The present Petition has been filed under Section 11 of the Arbitration and Conciliation Act, 19961, seeking the appointment of a Sole Arbitrator to adjudicate the disputes inter se the parties arising out of the Service Provider Agreement2 dated 01.10.2024. 2. Material on record indicates that the arbitration clause is envisaged in the Agreement as Clause 19.8. The said clause is set out herein below: “19.8 Disputes Resolution: a) In the event of any dispute or difference of opinion between the Parties arising out of or in connection with this Agreement or with 1 Act 2 Agreement Signature Not Verified ARB.P. 2044/2025 Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:12.03.2026 19:51:22 regard to performance of any obligations by either Party, of the Parties hereto shall use their best efforts to settle such disputes or differences of opinion amicably by mutual negotiation within 30 (thirty) days of initiating such negotiation b) In case the dispute or differences are not settled amicably as provided in above, the dispute / differences shall he referred to a single Arbitrator to be appointed by the Bank and the award made in pursuance thereof shall be final and binding on the Parties. c) The arbitration proceedings shall be governed in by the Arbitration and Conciliation Act, 1996, or as may be amended or replaced from time to time. The arbitration shall be conducted in English language and the venue of such Arbitration shall be in Mumbai / New Delhi. d) The costs incurred for the purpose of resolution of disputes by way of arbitration shall be borne equally by the Parties.”

#3. Learned Counsel for the Petitioner submits that the Notice under section 21 of the Act invoking Arbitration is dated 23.10.2025. 4. Learned counsel appearing for the Respondent objects to the present Petition and submits that the Agreement between the parties is, by its nature, terminable. It is further submitted that the said Agreement has not been wrongfully terminated and, therefore, according to the Respondent, no case is made out for referring the disputes to Arbitration. 5. Learned counsel for the Respondent also contends that certain claims sought to be raised by the Petitioner do not arise out of, nor are they covered by, the Agreement as entered into between the parties. 6. This Court has heard learned counsel for the parties and is of the view that the objections as raised by the learned counsel for the Respondent are not such that can be gone into while entertaining and deciding a Petition under Section 11 of the Act. 7. This Court is conscious that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the Act is no longer res integra. A three-Judge Bench of the Hon’ble Supreme Signature Not Verified ARB.P. 2044/2025 Digitally Signed By:HARVINDER KAUR BHATIA Signing Date:12.03.2026 19:51:22 Court in SBI General Insurance Co. Ltd. v. Krish Spinning3, after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re4, comprehensively delineated the contours of judicial intervention at the stage of Section 11of the Act. The excerpt of Krish Spg (supra) reads as under:- “(c) Judicial interference under the 1996 Act 110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators. 111. Section 11 of the 1996 Act is provided to give effect to the mutual intention of the parties to settle their disputes by arbitration in situations where the parties fail to appoint an arbitrator(s). The parameters of judicial review laid down for Section 8 differ from those prescribed for Section 11. The view taken in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature was legislatively overruled by the introduction of Section 11(6-A) in 2015. Thus, although both these provisions intend to compel parties to abide by their mutual intention to arbitrate, yet the scope of powers conferred upon the courts under both the sections are different. 112. The difference between Sections 8 and 11, respectively, of the 1996 Act is also evident from the scope of these provisions. Some of these differences are: 112.1. While Section 8 empowers any “judicial authority” to refer the parties to arbitration, under Section 11, the power to refer has been exclusively conferred upon the High Court and the Supreme Court. 112.2. Under Section 37, an appeal lies against the refusal of the judicial authority to refer the parties to arbitration, whereas no such provision for appeal exists for a refusal under Section 11. 112.3. The standard of scrutiny provided under Section 8 is that of prima facie examination of the validity and existence of an