Case Note & Summary
The applicant, Vardhaman Builders, filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to resolve disputes arising out of a Development Agreement dated 22nd August 2018 entered into with the respondents, Narendra Balasaheb Ghatge and Nilesh Vasant Ghatge. The agreement contained an arbitration clause. The respondents opposed the application on the ground that the agreement had been terminated and therefore the arbitration clause could not be invoked. The Court, after hearing the parties, held that the existence of an arbitration clause in the agreement is sufficient for the purpose of Section 11 of the Act, and the termination of the agreement does not extinguish the arbitration clause. The Court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties. The judgment was pronounced on 3rd November 2025.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of Arbitration and Conciliation Act, 1996 - Existence of Arbitration Clause - The applicant filed a petition under Section 11 for appointment of an arbitrator in a dispute arising from a Development Agreement dated 22nd August 2018, which contained an arbitration clause. The respondents opposed the petition on the ground that the agreement had been terminated and thus the arbitration clause could not be invoked. The Court held that the existence of an arbitration clause in the agreement is sufficient for the purpose of Section 11, and the termination of the agreement does not extinguish the arbitration clause. The Court appointed a sole arbitrator to adjudicate the disputes between the parties. (Paras 1-5)
Issue of Consideration
Whether an arbitrator can be appointed under Section 11 of the Arbitration and Conciliation Act, 1996 when the underlying agreement containing the arbitration clause has been terminated.
Final Decision
The Court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Section 11 of Arbitration and Conciliation Act
- 1996
- Appointment of Arbitrator
- Existence of Arbitration Clause
- Termination of Agreement does not extinguish arbitration clause
Case Details
2025 LawText (BOM) (11) 97
Commercial Arbitration Application No. 383 of 2024
SOMASEKHAR SUNDARESAN, J.
Mr. Kevic Setalvad, Senior Advocate a/w Mr. Jehan Lalkaka, Ms. Rashna Khan, Ms. Poorva Garg and Mr. Simon Mascarenhas i/b Mulla & Mulla And Craigie Blunt & Caroe, for Applicant. Mr. Mayur Khandeparkar a/w. Ms. Disha Jain i/b Kevin Pereira, Advocates for Respondent Nos.1 & 2.
Narendra Balasaheb Ghatge and Nilesh Vasant Ghatge
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Nature of Litigation
Commercial Arbitration Application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
Remedy Sought
Appointment of a sole arbitrator to adjudicate disputes arising from a Development Agreement.
Filing Reason
Disputes arose between the parties under a Development Agreement dated 22nd August 2018, which contained an arbitration clause. The respondents terminated the agreement and opposed invocation of arbitration.
Issues
Whether an arbitrator can be appointed under Section 11 of the Arbitration and Conciliation Act, 1996 when the underlying agreement containing the arbitration clause has been terminated.
Submissions/Arguments
Applicant argued that the Development Agreement contained an arbitration clause and disputes had arisen, warranting appointment of an arbitrator.
Respondents opposed the application on the ground that the agreement had been terminated and therefore the arbitration clause could not be invoked.
Ratio Decidendi
The existence of an arbitration clause in the agreement is sufficient for the purpose of Section 11 of the Arbitration and Conciliation Act, 1996, and the termination of the agreement does not extinguish the arbitration clause.
Judgment Excerpts
This is an Application filed under Section 11 of the Arbitration and Conciliation Act, 1996.
The existence of an arbitration clause in the agreement is sufficient for the purpose of Section 11 of the Act, and the termination of the agreement does not extinguish the arbitration clause.
Procedural History
The applicant filed Commercial Arbitration Application No. 383 of 2024 under Section 11 of the Arbitration and Conciliation Act, 1996. The application was reserved on 21st April 2025 and pronounced on 3rd November 2025.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11
