Holding

The Supreme Court held that the High Court erred; there was no arbitrable dispute and the Section 11(6) application must be dismissed, setting aside the High Court’s order.

Summary

NTPC Ltd. and SPML Infra Ltd. entered into a contract for installation services. After SPML completed the work, NTPC released the final payment but retained SPML's bank guarantees, linking their release to disputes in other projects. The parties settled the matter through a Settlement Agreement that released the guarantees and barred any further claims, after which SPML withdrew its writ petition. One month later, SPML filed an arbitration petition under Section 11(6) alleging coercion and economic duress in executing the Settlement Agreement. The High Court allowed the petition, but the Supreme Court held that the allegations were not bona‑fide, there was no pending dispute, and the pre‑referral jurisdiction under Section 11(6) is limited to a prima‑facie test of the existence of an arbitration agreement and arbitrability. Consequently, the High Court’s order was set aside and the appeal was allowed.

Issues considered

Whether the High Court erred in permitting the Section 11(6) arbitration application despite the parties' Settlement Agreement and lack of a bona‑fide dispute.
Whether the pre‑referral jurisdiction under Section 11(6) of the Arbitration and Conciliation Act is confined to determining the existence of an arbitration agreement and a prima‑facie arbitrability test.
Whether the allegations of coercion and economic duress raised by SPML are bona‑fide and give rise to an arbitrable dispute.
Whether the High Court should have exercised the limited prima‑facie scrutiny to strike down meritless litigation.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11(6), s. 11(6A), s. 34
Arbitration and Conciliation (Amendment) Act, 2015

Subjects

ArbitrationSection 11(6)Pre‑referral jurisdictionNon‑arbitrabilityPrima facie testCoercionEconomic duressSettlement agreementBank guaranteesAccord and satisfaction

Judgment

846 [2023]REPORTS
SUPREME COURT 2 S.C.R. 846 [2023] 2 S.C.R.

A NTPC LTD.
v.
M/S SPML INFRA LTD.
(Civil Appeal No. 4778 of 2022)
B APRIL 10, 2023
[DR. DHANANJAYA Y CHANDRACHUD, CJI AND
PAMIDIGHANTAM SRI NARASIMHA, J.]
Arbitration and Conciliation Act 1996 : s. 11(6) – Constitution
of arbitral tribunal – Arbitiability of the dispute – Contract between
C
the parties – Successful completion of work by SPML and issuance
of completion certificate by NTPC – NTPC released the final payment
– However, NTPC withheld SPML’s Bank Guarantees with respect
to other projects – In turn, SPML raised a claim against NTPC, and
thereafter, filed writ petition seeking release the Bank Guarantees
D – During pendency, the parties arrived at a Settlement Agreement
and in compliance thereof, NTPC released the Bank Guarantees
and SPML withdrew the writ petition – After one month, SPML filed
the arbitration petition u/s. 11(6) alleging coercion and economic
duress in the execution of the Settlement Agreement – High Court
allowed the same – On appeal held: No allegations of coercion or
E
economic duress compelling SPML to withdraw any pending claims
under the subject contract as a condition for the return of the Bank
Guarantees – Only allegation by SPML was with respect to NTPC’s
illegal action of interlinking the release of the Bank Guarantees
with some other contracts –Allegations of coercion and economic
F duress not bona fide, and that there were no pending claims between
the parties for submission to arbitration – Claim of SPML was an
attempt to initiate ex facie meritless, frivolous and dishonest litigation
– High Court should have exercised the prima facie test to screen
and strike down the ex-facie meritless and dishonest litigation – It
should have exercised the restricted and limited review to check
G
and protect parties from being forced to arbitrate – High Court
erred in allowing the application u/s. 11(6), thus, the decision of
the High Court set aside.
s. 11(6) – Pre-referral jurisdiction of the courts u/s. 11(6) –
Scope of – Held: Is very narrow and inheres two inquiries – Primary
H
846
NTPC LTD. v. M/S SPML INFRA LTD. 847

inquiry is about the existence and the validity of an arbitration A
agreement and the secondary inquiry is with respect to the non-
arbitrability of the dispute at the reference stage – Standard of
scrutiny to examine the non-arbitrability of a claim is only prima
facie – Limited scrutiny, through the eye of the needle, is necessary
and compelling – If this duty within the limited extent is not exercised,
B
and the Court becomes too reluctant to intervene, it may undermine
the effectiveness of both, arbitration and the Court – Thus, this
Court or a High Court, while exercising jurisdiction u/s. 11(6) not
expected to act mechanically merely to refer a purported dispute
raised by an applicant to the chosen arbitrator.
C
Allowing the appeal, the Court
HELD: 1.1 The pre-referral jurisdiction of the courts under
Section 11(6) of the Act is very narrow and inheres two inquiries.
The primary inquiry is about the existence and the validity of an
arbitration agreement, which also includes an inquiry as to the D
parties to the agreement and the applicant’s privity to the said
agreement. These are matters which require a thorough
examination by the referral court. The secondary inquiry that may
arise at the reference stage itself is with respect to the non
arbitrability of the dispute. [Para 25][862-E-F]
E
1.2 As a general rule and a principle, the arbitral tribunal is
the preferred first authority to determine and decide all questions
of non-arbitrability. As an exception to the rule, and rarely as a
demurrer, the referral court may reject claims which are
manifestly and ex-facie non-arbitrable. The standard of scrutiny
to examine the non-arbitrability of a claim is only prima facie. F
Referral courts must not undertake a full review of the contested
facts; they must only be confined to a primary first review and let
facts speak for themselves. This also requires the courts to
examine whether the assertion on arbitrability is bona fide or
not. The prima facie scrutiny of the facts must lead to a clear G
conclusion that there is not even a vestige of doubt that the claim
is non-arbitrable. On the other hand, even if there is the slightest
doubt, the rule is to refer the dispute to arbitration. [Paras 26,
27][862-G; 863-C-E]

H
848 SUPREME COURT REPORTS [2023] 2 S.C.R.

A 1.3 The limited scrutiny, through the eye of the needle, is
necessary and compelling. It is intertwined with the duty of the
referral court to protect the parties from being forced to arbitrate
when the matter is demonstrably non-arbitrable. It has been
termed as a legitimate interference by courts to refuse reference
in order to prevent wastage of public and private resources.
B
Further, as noted in Vidya Drolia’s case, if this duty within the
limited compass is not exercised, and the Court becomes too
reluctant to intervene, it may undermine the effectiveness of both,
arbitration and the Court. Therefore, this Court or a High Court,
as the case may be, while exercising jurisdiction under Section
C 11(6) of the Act, is not expected to act mechanically merely to
deliver a purported dispute raised by an applicant at the doors of
the chosen arbitrator. [Para 28][863-E-F; 864-A]
2.1 A simple narration of the bare fact leads to conclude
that the allegations of coercion and economic duress are not bona
D fide, and that there were no pending claims between the parties
for submission to arbitration. The respondent’s claim fits in the
description of an attempt to initiate “ex facie meritless, frivolous
and dishonest litigation” [Para 44][867-D]
2.2 The whole dispute revolves around the solitary act of
E the Appellant, NTPC, in not returning the Bank Guarantees
despite the successful completion of work. This continued even
after SPML issued the No-Demand Certificate and NTPC
released the final payment. These undisputed facts led to the
institution of the Writ Petition before the Delhi High Court. There
were no allegations of coercion or economic duress compelling
F SPML to withdraw any pending claims under the subject contract
as a condition for the return of the Bank Guarantees. On the
contrary, the only allegation by SPML was with respect to NTPC’s
“illegal” action of interlinking the release of the Bank Guarantees
with some other contracts. This was precisely the argument before
G the High Court, and, in fact, this submission is recorded by the
High Court while issuing notice and injuncting NTPC. This fact
clearly indicates that the plea of coercion and economic duress
leading to the Settlement Agreement is an afterthought. [Para
45][867-E-G]

H
NTPC LTD. v. M/S SPML INFRA LTD. 849

2.3. It was during the subsistence of the Writ Petition and A
the High Court’s interim order, when SPML had complete
protection of the Court, that the parties entered into the
Settlement Agreement. This agreement was comprehensive. It
inter alia provided for the release of Bank Guarantees by NTPC,
the withdrawal of SPML’s Writ Petition, restraining NTPC from
B
filing contempt proceedings against SPML for letting the Bank
Guarantees expire, and finally, restraining SPML from initiating
any proceedings under the subject contract, including arbitration.
The Settlement Agreement also recorded that there were no
subsisting issues pending between the parties. [Para 46][868-A-
C] C
2.4. After reaping the benefits of the Settlement Agreement,
the Writ Petition was withdrawn on 21.09.2020. It is thereafter
that the present application under Section 11(6) of the Act was
filed. The sequence of events leads to conclude that the letter of
repudiation was issued only to wriggle out of the terms of the D
Settlement Agreement. Thus, it is clarified that the claims sought
to be submitted to arbitration were raised as an afterthought.
Further, SPML’s allegations of coercion and economic duress in
the execution of the Settlement Agreement lack bona fide. They
are liable to be knocked down as ex facie frivolous and untenable.
[Paras 47 and 48][868-E-G] E
2.5. This is a case where the High Court should have
exercised the prima facie test to screen and strike down the ex-
facie meritless and dishonest litigation. These are the kinds of
cases where the High Court should exercise the restricted and
limited review to check and protect parties from being forced to F
arbitrate. Thus, the High Court erred in allowing the application
under Section 11(6) of the Act. The High Court ought to have
examined the issue of the final settlement of disputes in the
context of the principles laid down in Vidya Drolia’s case. Thus,
the decision of the High Court is set aside. [Paras 49-51][868-G-
G
H; 869-A-B]
Vidya Drolia and Ors. v. Durga Trading Corporation
(2021) 2 SCC 1 – relied on.
Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman
(2019) 8 SCC 714 : [2019] 12 SCR 123; Duro H
850 SUPREME COURT REPORTS [2023] 2 S.C.R.

A Felguera, S.A. v. Gangavaram Port Ltd. (2017) 9 SCC
729 : [2017] 10 SCR 285; Sanjiv Prakash v. Seema
Kukreja and Ors. (2021) 9 SCC 732; Oriental
Insurance Co. Ltd. and Anr. v. Dicitex Furnishing Ltd.
(2020) 4 SCC 621 : [2019] 14 SCR 389; Emaar India
Ltd. v. Tarun Aggarwal Projects LLP & Anr 2022 SCC
B
OnLine SC 1328; National Insurance Co. Ltd. v.
Boghara Polyfab (P) Ltd (2009) 1 SCC 267 : [2008]
13 SCR 638; Union of India & Ors. v. Master
Construction Co. (2011) 12 SCC 349 : [2011] 5 SCR
853; New India Assurance Co. Ltd. v. Genus Power
C Infrastructure Ltd. (2015) 2 SCC 424 : [2014] 12 SCR
360; United India Insurance Co. Ltd. v. Antique Art
Exports Pvt. Ltd. (2019) 5 SCC 362 : [2019] 5 SCR
521; Pravin Electricals Pvt. Ltd. v. Galaxy Infra and
Engg. Pvt. Ltd. (2021) 5 SCC 671; Sanjiv Prakash v.
Seema Kukreja and Ors. (2021) 9 SCC 732; Indian Oil
D
Corporation Ltd. v. NCC Ltd. (2022) SCC OnLine SC
896; BSNL and Anr. v. Nortel Networks India (P) Ltd.
(2021) 5 SCC 738; Secunderabad Cantonment Board
v. B. Ramachandraiah & Sons (2021) 5 SCC 705; DLF
Home Developers Limited v. Rajapura Homes Pvt. Ltd
E 2021 SCC OnLine SC 781 – referred to.
Case Law Reference
[2019] 12 SCR 123 referred to Para 13
[2017] 10 SCR 285 referred to Para 13
F (2021) 9 SCC 732 referred to Para 13
[2019] 14 SCR 389 referred to Para 13
[2008] 13 SCR 638 referred to Para 17
[2011] 5 SCR 853 referred to Para 17
G [2014] 12 SCR 360 referred to Para 17
[2019] 5 SCR 521 referred to Para 20
(2021) 5 SCC 671 referred to Para 24
(2021) 9 SCC 732 referred to Para 24
H
NTPC LTD. v. M/S SPML INFRA LTD. 851

(2021) 5 SCC 738 referred to Para 24 A
(2021) 5 SCC 705 referred to Para 24
(2021) 2 SCC 1 relied on Para 28, 50
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4778
of 2022. B
From the Judgment and Order dated 08.04.2021 of the High Court
of Delhi at New Delhi in ARBP No. 477 of 2020.
Adarsh Tripathi, Vikram S. Baid, Ajitesh Garg, Gaurav, Advs. for
the Appellant. C
Jaideep Gupta, Soumya Dutta, Advs. for the Respondent.
The Judgment of the Court was delivered by
PAMIDIGHANTAM SRI NARASIMHA, J.
1. The present appeal arises out of a decision of the High Court D
of Delhi1, allowing the Respondent’s application under Section 11(6) of
the Arbitration and Conciliation Act, 19962 for the constitution of an
Arbitral Tribunal. It is the case of Appellant NTPC that there were no
subsisting disputes between the parties in view of the Settlement
Agreement dated 27.05.2020 and that the application for arbitration is E
an afterthought and abuse of the process.
2. By an order dated 15.07.2022, this Court, while granting leave,
stayed all further proceedings before the Arbitral Tribunal. Short facts
giving rise to the filing of the petition under Section 11 of the Act and
leading to the impugned decision of the High Court are as follows. F
3. Facts: The Appellant and Respondent, hereinafter referred to
as NTPC and SPML respectively, entered into a contract for “Installation
Services for Station Piping Package for Simhadri Super Thermal
Power Project Stage II at NTPC at Simhadri, Vishakapatnam”. In
terms of the contract agreement, SPML furnished Performance Bank G
Guarantees and Advanced Bank Guarantees3for Rs. 14,96,89,136/- to
secure the Appellant.
1
In ARBP No. 477/2020, dated 08.04.2021.
2
hereinafter ‘the Act’.
3
hereinafter referred to as ‘Bank Guarantees’. H
852 SUPREME COURT REPORTS [2023] 2 S.C.R.

A 4. Pursuant to the successful completion of the project, a
Completion Certificate was issued by NTPC on 27.03.2019. By its letter
dated 10.04.2019, NTPC informed SPML that the final payment under
the contract would be released upon the receipt of a No-Demand
Certificate from SPML. The No-Demand Certificate was issued by
B SPML on 12.04.2019 and NTPC also released the final payment
amounting to Rs. 1,40,00,000/-in April 2019. The Bank Guarantees were
however withheld.
5. On 14.05.2019, NTPC informed SPML that the Bank
Guarantees were withheld on account of pending liabilities and disputes
C between the parties with respect to other projects at Bongaigon, Barh,
and Korba. SPML naturally protested. By its letter dated 15.05.2019,
SPML informed NTPC that the retention of Bank Guarantees, despite
issuance of the Completion Certificate and the No-Demand Certificate,
by linking them to some other projects, was unjustified. Following the
protest, SPML raised a demand of Rs. 72,01,53,899/- from NTPC as
D liabilities recoverable for actions attributable to NTPC under this very
contract.
6. By its letter dated 12.06.2019, SPML called upon NTPC to
appoint an Adjudicator for resolving pending disputes in terms of the
General and Special Conditions of Contract. As no action was taken by
E NTPC, SPML moved the Delhi High Court by filing Writ Petition No.
7213 of 2019 under Article 226 of the Constitution, for the release of the
Bank Guarantees. The prayer in the Writ Petition is to:
“(a) Pass an appropriate Writ, Order or Direction quashing
the e-mail dated 14.05.2019 issued by the Respondent insofar
F as it pertains to the release of the Bank Guarantees being (a)
0040ILG002609, (b) 0040ILG001109, (C) 0040ILG001209,
(d) 0040ILG001309 and direct the Respondent to release the
aforesaid Bank Guarantees forthwith, and
(b) Pass any other order or such other orders as may be
G necessary in the interests of justice, equity and good
conscience.”
7. While issuing notice, the High Court, by its interim order dated
08.07.2019, directed NTPC not to encash the Bank Guarantees, and
further directed SPML to keep the Bank Guarantees alive.
H
NTPC LTD. v. M/S SPML INFRA LTD. 853
[PAMIDIGHANTAM SRI NARASIMHA, J.]

8. Pending the Writ Petition, negotiations between the parties A
culminated in a Settlement Agreement on 27.05.2020. Through the
Settlement Agreement, NTPC agreed to release the withheld Bank
Guarantees. SPML also agreed to withdraw its pending Writ Petition
and undertook not to initiate any other proceedings, including arbitration,
under the subject contract.
B
9. Following the Settlement Agreement, the Bank Guarantees
were released by NTPC on 30.06.2020. SPML withdrew the Writ Petition,
as recorded in the Order of the Delhi High Court dated 21.09.2020.
10. After the aforesaid settlement of the disputes, followed by its
implementation, SPML repudiated the Settlement Agreement and filed C
the present application under Section 11(6) of the Act in the Delhi High
Court on 10.10.20204. In this Arbitration Petition, SPML alleged coercion
and economic duress in the execution of the Settlement Agreement.
The allegation was, that the retention of the Bank Guarantees compelled
SPML to accept the terms of Settlement Agreement. SPML also averred
that NTPC had failed to appoint an arbitrator in spite of repeated requests, D
and therefore the High Court must constitute an Arbitral Tribunal, in
exercise of its jurisdiction under the Act.
11. In its reply to the Arbitration Petition, NTPC raised two-fold
objections. Firstly, that SPML failed to follow the mandatory pre-
arbitration procedure of first referring the disputes to an Adjudicator as E
per the terms of the Dispute Resolution Clause5. Secondly, that the
4
Clause 6.2 of the General Conditions of Contract is as under:
“6.2 Arbitration
6.2.1 If either the Employer or the Contractor is dissatisfied with the Adjudicator’s
decision, or if the Adjudicator fails to give a decision within twenty eight (28) days F
of a dispute being referred to it, then either the Employer or the Contractor may,
within fifty six (56) days of such reference, give notice to the other party, with a
copy for information to the Adjudicator of its intention to commence arbitration, as
hereinafter provided, as to the matter in dispute, and no arbitration in respect of
this matter may be commenced unless such notice is given.”
5
Dispute resolution was provided under clause 6.1 of the General Conditions of
G
Contract and clause 3 of Special Conditions of Contract; hereinafter ‘the Dispute
Resolution Clause’; Clause 6.1 of the General Conditions of Contract is as under:
“6. Settlement of Disputes
6.1 Adjudicator
6.1.1 If any dispute of any kind whatsoever shall arise between the Employer and
the Contractor in connection with or arising out of the Contract, including without
prejudice to the generality of the foregoing, any question regarding its existence, H
854 SUPREME COURT REPORTS [2023] 2 S.C.R.

A disputes between the parties were settled by virtue of the Settlement
Agreement dated 27.05.2020. Acting under the Settlement Agreement,
NTPC released the Bank Guarantees and SPML also proceeded to
withdraw the Writ Petition, and therefore, there was discharge of the
contract by accord and satisfaction. The allegations of coercion and
B economic duress were denied as false, as all events occurred during the
subsistence of proceedings before the Delhi High Court, and the parties
willingly complied with the terms of the Settlement Agreement. Further,
the demand of Rs. 72,01,53,899/- was an afterthought, never raised during
the subsistence of the contract. Under these circumstances, NTPC
submitted that the application under Section 11(6) of the Act must be
C rejected.
12. High Court: The High Court examined the correspondence
between the parties in detail. It rejected the first contention of NTPC
that SPML should have first resorted to an alternative dispute resolution
mechanism under the Dispute Resolution Clause. It noted that such a
D
request was, in fact, made by SPML on an earlier occasion, but NTPC
failed to respond to the same. On the request for arbitration and the
allegation of economic duress that allegedly prevailed in signing the
Settlement Agreement, the High Court observed that:

E “66. SPML had invoked the arbitration clause and had sought
reference of disputes to arbitration. It had also approached
this Court. Thus, it would be difficult for SPML to establish
that it was economically coerced to enter into the Settlement
Agreement. However, this Court is unable to accept that the
dispute whether the Contract Agreement stood discharged/
F novated in terms of the Settlement Agreement, is ex facie
untenable, insubstantial or frivolous.”
(emphasis supplied)

G validity or termination, or the execution of the Facilities- whether during the progress
of the Facilities or after their completion and whether before or after the termination,
abandonment or breach of the Contract- the parties shall seek to resolve any such
dispute or difference by mutual consultation. If the parties fail to resolve such a
dispute or difference by mutual consultation, then the dispute shall be referred in
writing by either party to the Adjudicator, with a copy to the other party.”
H
NTPC LTD. v. M/S SPML INFRA LTD. 855
[PAMIDIGHANTAM SRI NARASIMHA, J.]

13. After referring to the decisions of this Court in Mayavati A
Trading (P) Ltd. v. Pradyuat Deb Burman6, Vidya Drolia and Ors.
v. Durga Trading Corporation7, Duro Felguera, S.A. v. Gangavaram
Port Ltd.8, Sanjiv Prakash v. Seema Kukreja and Ors.9, and Oriental
Insurance Co. Ltd. and Anr. v. Dicitex Furnishing Ltd.10, the High
Court allowed the Arbitration Petition. It appointed a former Judge of
B
the Delhi High Court as the Arbitrator on behalf of NTPC, and directed
the respective arbitrators to appoint the presiding Arbitrator.
14. Submissions by the Parties: Shri Adarsh Tripathi, Advocate
appearing with and on behalf of the Solicitor General, for NTPC, submitted
that the Settlement Agreement dated 27.05.2020 was arrived at during
the pendency of the Writ Petition before the High Court. The allegations C
of coercion and economic duress were, therefore, false and unbelievable.
He also submitted that SPML never raised claims during the subsistence
of the contract, before the Completion Certificate was issued, or even
before the final payment was made. Further, the conduct of SPML, in
waiting for the release of the Bank Guarantees as per the Settlement D
Agreement before withdrawing the Writ Petition, and thereafter instituting
the Arbitration Petition, clearly demonstrated that the allegation of coercion
was not bona fide. Finally, he submitted that the High Court was under
an obligation to undertake a limited scrutiny to examine whether a matter
is prima facie arbitrable. For this purpose, he relied on a recent decision
of this Court in Emaar India Ltd. v. Tarun Aggarwal Projects LLP & E
Anr 11 .
15. Shri Jaideep Gupta, Advocate appearing for the Respondent,
SPML, has submitted that the legal principles governing an application
under Section 11(6) of the Act are well-settled following the decisions of
this Court in Mayavati Trading (supra) and Vidya Drolia (supra). At F
the pre-referral stage, the jurisdiction of the court is restricted to the
examination of whether an arbitration agreement exists between the
parties. He submitted that the decision of the High Court was
unexceptionable, since the question as to whether the Settlement
G
6
(2019) 8 SCC 714.
7
(2021) 2 SCC 1. (hereinafter ‘Vidya Drolia’)
8
(2017) 9 SCC 729.
9
(2021) 9 SCC 732.
10
(2020) 4 SCC 621.
11
2022 SCC OnLine SC 1328.
H
856 SUPREME COURT REPORTS [2023] 2 S.C.R.

A Agreement was executed under undue influence or coercion could be
determined by an Arbitral Tribunal.
16. Position of Law: In the present case, we are concerned
with the pre-referral jurisdiction of the High Court under Section 11
of the Act and would like to underscore the limited scope within
B which an application under Section 11(6) 12 of the Act has to be
considered.
17. The position of law with respect to the pre-referral
jurisdiction, as it existed before the advent of Section 11(6A) in the
Act, was based on a well-articulated principle formulated by this
C Court in National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd13.
In Boghara Polyfab, this Court held that the issue of non-arbitrability
of a dispute will have to be examined by the court in cases where
accord and discharge of the contract is alleged. Following the principle
in Boghara Polyfab, this Court in Union of India & Ors. v. Master
D Construction Co.14 observed that when the validity of a discharge
voucher, no-claim certificate or a settlement agreement is in dispute,
the court must prima facie examine the credibility of the allegations
before referring the parties to arbitration. Yet again in New India

12
E Arbitration and Conciliation Act 1996 (Act 26 of 1996), Section 11(6):
“(6)Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement
expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to
him or it under that procedure, a party may request 1 [the Supreme Court or,
F as the case may be, the High Court or any person or institution designated by
such Court]to take the necessary measure, unless the agreement on the
appointment procedure provides other means for securing the appointment.”
13
(2009) 1 SCC 267.
14
(2011) 12 SCC 349:
“18. In our opinion, there is no rule of the absolute kind. In a case where the
claimant contends that a discharge voucher or no-claim certificate has been obtained
G by fraud, coercion, duress or undue influence and the other side contests the
correctness thereof, the Chief Justice/his designate must look into this aspect to
find out at least, prima facie, whether or not the dispute is bona fide and genuine.
Where the dispute raised by the claimant with regard to validity of the discharge
voucher or no-claim certificate or settlement agreement, prima facie, appears to be
lacking in credibility, there may not be a necessity to refer the dispute for arbitration
H at all.”
NTPC LTD. v. M/S SPML INFRA LTD. 857
[PAMIDIGHANTAM SRI NARASIMHA, J.]

Assurance Co. Ltd. v. Genus Power Infrastructure Ltd. 15, this Court A
observed that allegations of fraud, coercion, duress or undue influence
must be prima facie substantiated through evidence by the party
raising the allegations.
18. In a legislative response to these precedents, through the
Arbitration and Conciliation (Amendment) Act 2015,16 sub-section (6A) B
was added to Section 11 of the Act, which reads as follows:
“(6-A) The Supreme Court or, as the case may be, the High
Court, while considering any application under sub-section
(4) or sub-section (5) or sub-section (6), shall,
C
notwithstanding any judgment, decree or order of any court,
confine to the examination of the existence of an arbitration
agreement.”
(emphasis supplied)
19. Taking cognizance of the legislative change, this Court in Duro D
Felguera (supra), noted that post the 2015 Amendments, the jurisdiction
of the court under Section 11(6) of the Act is limited to examining whether
an arbitration agreement exists between the parties – “nothing more,
nothing less”17.
E
15
(2015) 2 SCC 424:
“10. In our considered view, the plea raised by the respondent is bereft of any
details and particulars, and cannot be anything but a bald assertion. Given the fact
that there was no protest or demur raised around the time or soon after the letter of
subrogation was signed, that the notice dated 31-3-2011 itself was nearly after
three weeks and that the financial condition of the respondent was not so precarious F
that it was left with no alternative but to accept the terms as suggested, we are of
the firm view that the discharge in the present case and signing of letter of subrogation
were not because of exercise of any undue influence. Such discharge and signing of
letter of subrogation was voluntary and free from any coercion or undue influence.
In the circumstances, we hold that upon execution of the letter of subrogation, there
was full and final settlement of the claim. Since our answer to the question, whether
there was really accord and satisfaction, is in the affirmative, in our view no arbitrable G
dispute existed so as to exercise power under Section 11 of the Act. The High Court
was not therefore justified in exercising power under Section 11 of the Act.”
16
Arbitration and Conciliation (Amendment) Act 2015 (Act 3 of 2016); hereinafter
referred to as ‘the 2015 Amendments’.
17
Duro Felguera supra note 7, para 59 (concurring opinion of Kurian Joseph, J).
H
858 SUPREME COURT REPORTS [2023] 2 S.C.R.

A 20. However, in the year 2019, in United India Insurance Co.
Ltd. v. Antique Art Exports Pvt. Ltd.18, this Court had nevertheless
accepted an objection of ‘accord and satisfaction’ in opposition to an
application for reference to arbitration.
21. It did not take much time for this Court to reverse the approach
B in Antique Art Exports (supra). A three-judge bench in Mayavati
Trading (supra) expressly overruled the above-referred decision in
Antique Art Exports, observing that:
“10. This being the position, it is clear that the law prior to
the 2015 Amendment that has been laid down by this Court,
C which would have included going into whether accord and
satisfaction has taken place, has now been legislatively
overruled. This being the position, it is difficult to agree with
the reasoning contained in the aforesaid judgment, as Section
11(6-A) is confined to the examination of the existence of an
arbitration agreement and is to be understood in the narrow
D sense as has been laid down in the judgment in Duro
Felguera, SA.”
22. The entire case law on the subject was considered by a three-
judge bench of this Court in Vidya Drolia (supra), and an overarching
principle with respect to the pre-referral jurisdiction under Section 11(6)
E of the Act was laid down. The relevant portion of the judgment is as
follows:
“153. Accordingly, we hold that the expression “existence of
an arbitration agreement” in Section 11 of the Arbitration
18
(2019) 5 SCC 362:
F “21. In the instant case, prima facie no dispute subsisted after the discharge voucher
being signed by the respondent without any demur or protest and claim being
finally settled with accord and satisfaction and after 11 weeks of the settlement of
claim a letter was sent on 27-7-2016 for the first time raising a voice in the form of
protest that the discharge voucher was signed under undue influence and coercion
with no supportive prima facie evidence being placed on record in absence thereof,
G it must follow that the claim had been settled with accord and satisfaction leaving
no arbitral dispute subsisting under the agreement to be referred to the arbitrator for
adjudication.
22. In our considered view, the High Court has committed a manifest error in
passing the impugned order and adopting a mechanical process in appointing the
arbitrator without any supportive evidence on record to prima facie substantiate
that an arbitral dispute subsisted under the agreement which needed to be referred
H to the arbitrator for adjudication.”
NTPC LTD. v. M/S SPML INFRA LTD. 859
[PAMIDIGHANTAM SRI NARASIMHA, J.]

Act, would include aspect of validity of an arbitration A
agreement, albeit the court at the referral stage would apply
the prima facie test on the basis of principles set out in this
judgment. In cases of debatable and disputable facts, and
good reasonable arguable case, etc., the court would force
the parties to abide by the arbitration agreement as the Arbitral
B
Tribunal has primary jurisdiction and authority to decide the
disputes including the question of jurisdiction and non-
arbitrability.
154. Discussion under the heading ”Who Decides
Arbitrability?” can be crystallised as under:
C
154.1. Ratio of the decision in Patel Engg. Ltd. [SBP &
Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] on the scope of
judicial review by the court while deciding an application
under Sections 8 or 11 of the Arbitration Act, post the
amendments by Act 3 of 2016 (with retrospective effect from
23-10-2015) and even post the amendments vide Act 33 of D
2019 (with effect from 9-8-2019), is no longer applicable.
154.2. Scope of judicial review and jurisdiction of the court
under Sections 8 and 11 of the Arbitration Act is identical but
extremely limited and restricted.
E
154.3. The general rule and principle, in view of the legislative
mandate clear from Act 3 of 2016 and Act 33 of 2019, and
the principle of severability and competence-competence, is
that the Arbitral Tribunal is the preferred first authority to
determine and decide all questions of non-arbitrability. The
court has been conferred power of “second look” on aspects F
of non-arbitrability post the award in terms of sub-clauses
(i), (ii) or (iv) of Section 34(2)(a) or sub-clause (i) of Section
34(2)(b) of the Arbitration Act.
154.4. Rarely as a demurrer the court may interfere at Section
8 or 11 stage when it is manifestly and ex facie certain that G
the arbitration agreement is non-existent, invalid or the
disputes are non-arbitrable, though the nature and facet of
non-arbitrability would, to some extent, determine the level
and nature of judicial scrutiny. The restricted and limited review
is to check and protect parties from being forced to arbitrate
H
860 SUPREME COURT REPORTS [2023] 2 S.C.R.

A when the matter is demonstrably “non-arbitrable” and to cut
off the deadwood. The court by default would refer the matter
when contentions relating to non-arbitrability are plainly
arguable; when consideration in summary proceedings would
be insufficient and inconclusive; when facts are contested;
when the party opposing arbitration adopts delaying tactics
B
or impairs conduct of arbitration proceedings. This is not the
stage for the court to enter into a mini trial or elaborate review
so as to usurp the jurisdiction of the Arbitral Tribunal but to
affirm and uphold integrity and efficacy of arbitration as an
alternative dispute resolution mechanism.”
C (emphasis supplied)
23. The limited scope of judicial scrutiny at the pre-referral stageis
navigated through the test of a ‘prima facie review’. This is explained
as under:
D “133. Prima facie case in the context of Section 8 is not to be
confused with the merits of the case put up by the parties
which has to be established before the Arbitral Tribunal. It is
restricted to the subject-matter of the suit being prima facie
arbitrable under a valid arbitration agreement. Prima facie
case means that the assertions on these aspects are bona fide.
E When read with the principles of separation and competence-
competence and Section 34 of the Arbitration Act, the referral
court without getting bogged down would compel the parties
to abide unless there are good and substantial reasons to the
contrary.
F 134.Prima facie examination is not full review but a primary
first review to weed out manifestly and ex facie non-existent
and invalid arbitration agreements and non-arbitrable
disputes. The prima facie review at the reference stage is to
cut the deadwood and trim off the side branches in
G straightforward cases where dismissal is barefaced and
pellucid and when on the facts and law the litigation must
stop at the first stage. Only when the court is certain that no
valid arbitration agreement exists or the disputes/subject-
matter are not arbitrable, the application under Section 8
would be rejected. At this stage, the court should not get lost
H
NTPC LTD. v. M/S SPML INFRA LTD. 861
[PAMIDIGHANTAM SRI NARASIMHA, J.]

in thickets and decide debatable questions of facts. Referral A
proceedings are preliminary and summary and not a mini
trial…
…
138…On the other hand, issues relating to contract formation,
existence, validity and non-arbitrability would be connected B
and intertwined with the issues underlying the merits of the
respective disputes/claims. They would be factual and disputed
and for the Arbitral Tribunal to decide.
139. We would not like to be too prescriptive, albeit observe
that the court may for legitimate reasons, to prevent wastage C
of public and private resources, can exercise judicial
discretion to conduct an intense yet summary prima facie
review while remaining conscious that it is to assist the
arbitration procedure and not usurp jurisdiction of the Arbitral
Tribunal. Undertaking a detailed full review or a long-drawn D
review at the referral stage would obstruct and cause delay
undermining the integrity and efficacy of arbitration as a
dispute resolution mechanism. Conversely, if the court becomes
too reluctant to intervene, it may undermine effectiveness of
both the arbitration and the court. There are certain cases
where the prima facie examination may require a deeper E
consideration. The court’s challenge is to find the right amount
of and the context when it would examine the prima facie
case orexercise restraint. The legal order needs a right balance
between avoiding arbitration obstructing tactics at referral
stage and protecting parties from being forced to arbitrate F
when the matter is clearly non-arbitrable.
140. Accordingly, when it appears that prima facie review
would be inconclusive, or on consideration inadequate as it
requires detailed examination, the matter should be left for
final determination by the Arbitral Tribunal selected by the G
parties by consent. The underlying rationale being not to delay
or defer and to discourage parties from using referral
proceeding as a ruse to delay and obstruct. In such cases a
full review by the courts at this stage would encroach on the
jurisdiction of the Arbitral Tribunal and violate the legislative
H
862 SUPREME COURT REPORTS [2023] 2 S.C.R.

A scheme allocating jurisdiction between the courts and the
Arbitral Tribunal. Centralisation of litigation with the Arbitral
Tribunal as the primary and first adjudicator is beneficent as
it helps in quicker and efficient resolution of disputes.”
(emphasis supplied)
B 24. Following the general rule and the principle laid down in
Vidya Drolia (supra), this Court has consistently been holding that the
arbitral tribunal is the preferred first authority to determine and decide
all questions of non-arbitrability. In Pravin Electricals Pvt. Ltd. v. Galaxy
Infra and Engg. Pvt. Ltd.19, Sanjiv Prakash v. Seema Kukreja and
C Ors.20, and Indian Oil Corporation Ltd. v. NCC Ltd.,21 the parties were
referred to arbitration, as the prima facie review in each of these cases
on the objection of non-arbitrability was found to be inconclusive.
Following the exception to the general principle that the court may
not refer parties to arbitration when it is clear that the case is manifestly
and exfacie non-arbitrable, in BSNL and Anr. v. Nortel Networks India
D
(P) Ltd.22 and Secunderabad Cantonment Board v. B. Ramachandraiah
& Sons23, arbitration was refused as the claims of the parties were
demonstrably time-barred.
25. Eye of the Needle: The above-referred precedents crystallise
the position of law that the pre-referral jurisdiction of the courts under
E Section 11(6) of the Act is very narrow and inheres two inquiries. The
primary inquiry is about the existence and the validity of an arbitration
agreement, which also includes an inquiry as to the parties to the
agreement and the applicant’s privity to the said agreement. These
are matters which require a thorough examination by the referral court.
F The secondary inquiry that may arise at the reference stage itself is with
respect to the non-arbitrability of the dispute.
26. As a general rule and a principle, the arbitral tribunal is the
preferred first authority to determine and decide all questions of non-
arbitrability. As an exception to the rule, and rarely as a demurrer,
G the referral court may reject claims which are manifestly and ex-

19
(2021) 5 SCC 671, paras 29, 30.
20
(2021) 9 SCC 732.
21
(2022) SCC OnLine SC 896.
22
(2021) 5 SCC 738. (hereinafter ‘Nortel Networks’)
23
H (2021) 5 SCC 705.
NTPC LTD. v. M/S SPML INFRA LTD. 863
[PAMIDIGHANTAM SRI NARASIMHA, J.]

facie non-arbitrable 24. Explaining this position, flowing from the A
principles laid down in Vidya Drolia (supra), this Court in a subsequent
decision in Nortel Networks (supra) held25:
“45.1 ...While exercising jurisdiction under Section 11 as the
judicial forum, the court may exercise the prima facie test to
screen and knockdown ex facie meritless, frivolous, and B
dishonest litigation. Limited jurisdiction of the courts would
ensure expeditious and efficient disposal at the referral stage.
At the referral stage, the Court can interfere “only” when it
is “manifest” that the claims are ex facie time-barred and
dead, or there is no subsisting dispute...” C
27. The standard of scrutiny to examine the non-arbitrability of a
claim is only prima facie. Referral courts must not undertake a full
review of the contested facts; they must only be confined to a primary
first review26 and let facts speak for themselves. This also requires the
courts to examine whether the assertion on arbitrability is bona fide or
D
not. 27 The prima facie scrutiny of the facts must lead to a clear
conclusion that there is not even a vestige of doubt that the claim is
non-arbitrable.28 On the other hand, even if there is the slightest doubt,
the rule is to refer the dispute to arbitration29.
28. The limited scrutiny, through the eye of the needle, is necessary
E
and compelling. It is intertwined with the duty of the referral court to
protect the parties from being forced to arbitrate when the matter is
demonstrably non-arbitrable30.It has been termed as a legitimate
interference by courts to refuse reference in order to prevent wastage
of public and private resources31. Further, as noted in Vidya Drolia
(supra), if this duty within the limited compass is not exercised, and the F
Court becomes too reluctant to intervene, it may undermine the
effectiveness of both, arbitration and the Court32. Therefore, this

24
Vidya Drolia supra note 7, para 154.4.
25
Nortel Networks supra note 22, para 45.1. G
26
Vidya Drolia supra note 7, para 134.
27
ibid.
28
Nortel Networks supra note 22, para 47.
29
Vidya Drolia supra note 7, para 154.4.
30
ibid para 154.4.
31
ibid para 139.
32
ibid. H
864 SUPREME COURT REPORTS [2023] 2 S.C.R.

A Court or a High Court, as the case may be, while exercising jurisdiction
under Section 11(6) of the Act, is not expected to act mechanically
merely to deliver a purported dispute raised by an applicant at the
doors of the chosen arbitrator 33 , as explained in DLF Home
Developers Limited v. Rajapura Homes Pvt. Ltd.
B 29. Analysis: We will now proceed to apply these principles to
the present case and examine the arbitrability of the dispute by undertaking
a prima facie review of the basic facts.
30. SPML duly completed the stipulated work under the subject
contract, and a Completion Certificate was issued by NTPC on
C 27.03.2019. SPML sought the release of the final payment, and NTPC,
by its letter dated 10.04.2019, agreed to release the same.
31. A No-Demand Certificate was issued by SPML on 12.04.2019,
and the final payment was released by April 2019. There is nothing on
record about any pending claims of SPML during the subsistence of the
D contract or till the release of the final payment. This is evident from the
Writ Petition as well as the Arbitration Petition under Section 11 of the
Act.
32. While NTPC released the final payment, on 14.05.2019, it
justified the withholding of SPML’s Bank Guarantees on the ground that
E there are certain disputes between the parties with respect to other
projects.
33. Objecting to the stand of NTPC by its letter dated 15.05.2019,
SPML stated that linking the Bank Guarantees with claims under other
projects was unjustified. In turn, SPML raised a claim of Rs. 72,01,53,899/
F - against NTPC. At the same time, SPML also sought the appointment
of an “Adjudicator” to settle these claims.
34. It is in the above-referred context that SPML filed the Writ
Petition before the High Court on 03.07.2019. The prayer in the Writ
Petition, particularly in the context of the huge claim raised on 15.05.2019,
assumes importance. The prayer is reproduced herein below for ready
G
reference:
“(a) Pass an appropriate Writ, Order or Direction quashing
the e-mail dated 14.05.2019 issued by the Respondent insofar
33
DLF Home Developers Limited v. Rajapura Homes Pvt. Ltd 2021 SCC OnLine SC
H 781, paras 18, 20.
NTPC LTD. v. M/S SPML INFRA LTD. 865
[PAMIDIGHANTAM SRI NARASIMHA, J.]

as it pertains to the release of the Bank Guarantees being (a) A
0040ILG002609, (b) 0040ILG001109, (c) 0040ILG001209,
(d) 0040ILG001309 and direct the Respondent to release the
aforesaid Bank Guarantees forthwith, ...”
35. There is no reference to the claim of Rs.72,01,53,899/- in the
body or the Prayer of the Writ Petition. Conspicuously, the Writ Petition B
is confined to seeking a direction to return the Bank Guarantees.
36. Pending disposal of the Writ Petition, the High Court, by an
interim order dated 08.07.2019,directed NPTC not to invoke the Bank
Guarantees. The interim order was subject to SPML keeping the Bank
Guarantees alive. The relevant portions of the order are: C
“…
2. Issue notice. The learned counsel appearing for the
respondent accepts notice.
3. Admittedly, the contract pursuant to which the bank D
guarantees in question had been furnished has been
completed and there is no dispute that the petitioner ’s
performance of the contract was satisfactory. The petitioner
also claims that it has received the entire consideration for
the same. The petitioner’s claims that the release of the bank
guarantees is being withheld contrary to the terms of the E
contract between the parties, in order to pressurize the
petitioner in respect of certain disputes in relation to other
contracts, which are pending adjudication before the Arbitral
Tribunal.
… F
6. In the meanwhile, the respondents are restrained from
invoking the bank guarantees, subject to the petitioner
keeping the same alive.”
37. On 23.07.2019, SPML sent a Notice to NTPC, intimating its
intention to invoke Arbitration under the Dispute Resolution Clause. G

38. During the pendency of the Writ Petition, the parties engaged
themselves in multiple discussions about their claims and counter-claims.
All that culminated in the Settlement Agreement dated 27.05.2020. The
Terms of the Settlement Agreement are as follows:
H
866 SUPREME COURT REPORTS [2023] 2 S.C.R.

A “NOW THEREFORE, in consideration of the premises and
mutual promises contained herein, the parties agree as follows:
1. That the Agency undertakes to withdraw WP No. 7213/
2019 filed in the Hon’ble High Court upon execution of the
present agreement immediately upon receipt of original Bank
B Guarantees stated herein below lying with NTPC as mentioned
herein below at Para 4.
2. That the Agency has agreed not to initiate any further
proceedings in relation with the present contract agreement
and work executed by the Agency, of any nature whatsoever.
C Further, the Agency has undertaken not to raise any claim of
any nature whatsoever against the NTPC Ltd. in relation with
the present contract agreement and work executed by the
Agency, be it Arbitration proceedings, civil suit, writ petition,
or any other proceedings before any judicial or quasi-judicial
D forum.
3. That the Agency has confirmed it has received entire
payments arising out of the present contract and the same
stands closed, and no further sum/money is payable to the
Agency in any manner whatsoever by NTPC Ltd. under the
E subject contract.
…
5. That NTPC Ltd. has further agreed not to raise any
contempt proceedings against the Agency for not keeping alive
F the BGs as directed by the Hon’ble High Court of Delhi in
pending Writ Petition.”
39. In compliance with the Settlement Agreement, NTPC released
the Bank Guarantees on 30.06.2020, which were the subject matter of
the pending Writ Petition.
G
40. It is noteworthy that the Bank Guarantees expired on
19.11.2019 and 16.12.2019, despite the specific direction by the High
Court to SPML to keep its Bank Guarantees alive. However, in
compliance with its express undertaking in the Settlement Agreement,
NTPC did not file any contempt proceedings against SPML.
H
NTPC LTD. v. M/S SPML INFRA LTD. 867
[PAMIDIGHANTAM SRI NARASIMHA, J.]

41. Following the release of the Bank Guarantees as per the A
Settlement Agreement, SPML withdrew the Writ Petition, as recorded
by the High Court in its Order dated 21.09.2020.
42. One month later, on 10.10.2020, SPML filed the Arbitration
Petition under Section 11(6) of the Act alleging coercion and economic
duress in the execution of the Settlement Agreement. It was also alleged B
that the Settlement Agreement was repudiated on 22.07.2020 through
SPML’s letter to NTPC, disputing the Settlement Agreement.
43. In its reply to the Arbitration Petition, NTPC specifically pointed
out that SPML never raised any claims with respect to the dues amounting
to Rs. 72,01,53,899/- during the pendency of the contract, and that the C
allegations of coercion and economic duress are completely false. NTPC
alleged that the Arbitration Petition lacked bona fide.
44. A simple narration of the bare facts, as indicated above, leads
us to conclude that the allegations of coercion and economic duress are
not bona fide, and that there were no pending claims between the parties D
for submission to arbitration. The Respondent’s claim fits in the description
of an attempt to initiate “ex facie meritless, frivolous and dishonest
litigation”34. We will endeavor to give reasons for our conclusion.
45. The whole dispute revolves around the solitary act of the
E
Appellant, NTPC, in not returning the Bank Guarantees despite the
successful completion of work. This continued even after SPML issued
the No-Demand Certificate and NTPC released the final payment. These
undisputed facts led to the institution of the Writ Petition before the
Delhi High Court. There were no allegations of coercion or economic
duress compelling SPML to withdraw any pending claims under the F
subject contract as a condition for the return of the Bank Guarantees.
On the contrary, the only allegation by SPML was with respect to NTPC’s
“illegal” action of interlinking the release of the Bank Guarantees with
some other contracts. This was precisely the argument before the High
Court, and, in fact, this submission is recorded by the High Court while
G
issuing notice and injuncting NTPC. This fact clearly indicates that the
plea of coercion and economic duress leading to the Settlement
Agreement is an afterthought.

34
Vidya Drolia supra note 7, para147.11. H
868 SUPREME COURT REPORTS [2023] 2 S.C.R.

A 46. We will now examine whether the allegations of coercion and
economic duress in the execution of the Settlement Agreement are bona
fide or not. This inquiry has a direct bearing on the arbitrability of the
dispute. It was during the subsistence of the Writ Petition and the High
Court’s interim order, when SPML had complete protection of the Court,
B that the parties entered into the Settlement Agreement. This agreement
was comprehensive. It inter alia provided for (i) the release of Bank
Guarantees by NTPC, (ii) the withdrawal of SPML’s Writ Petition, (iii)
restraining NTPC from filing contempt proceedings against SPML for
letting the Bank Guarantees expire, and finally, (iv) restraining SPML
from initiating any proceedings under the subject contract, including
C arbitration. The Settlement Agreement also recorded that there were no
subsisting issues pending between the parties.
47. The plea of coercion and economic duress must be seen in
the context of the execution of the Settlement Agreement not being
disputed, and its implementation leading to the release of the Bank
D Guarantees on 30.06.2020 also not being disputed. Almost three weeks
after the release of the Bank Guarantees, a letter of repudiation was
issued by SPML on 22.07.2020. This letter was issued about two months
after the Settlement Agreement was executed and in fact during the
subsistence of the Writ Petition. After reaping the benefits of the
E Settlement Agreement, the Writ Petition was withdrawn on 21.09.2020.
It is there after that the present application under Section 11(6) of the
Act was filed. The sequence of events leads us to conclude that the
letter of repudiation was issued only to wriggle out of the terms of the
Settlement Agreement.
F 48. The foregoing clarifies beyond doubt that the claims sought
to be submitted to arbitration were raised as an afterthought. Further,
SPML’s allegations of coercion and economic duress in the execution of
the Settlement Agreement lack bona fide. They are liable to be knocked
down as exfacie frivolous and untenable.
G 49. In view of the above-referred facts, which speak for
themselves, we are of the opinion that this is a case where the High
Court should have exercised the prima facie test to screen and strike
down the ex-facie meritless and dishonest litigation. These are the kinds
of cases where the High Court should exercise the restricted and limited
review to check and protect parties from being forced to arbitrate.
H
NTPC LTD. v. M/S SPML INFRA LTD. 869
[PAMIDIGHANTAM SRI NARASIMHA, J.]

50. Accordingly, we have no hesitation in holding that the High A
Court has committed an error in allowing the application under Section
11(6) of the Act. High Court ought to have examined the issue of the
final settlement of disputes in the context of the principles laid down in
Vidya Drolia (supra).
51. For the reasons stated above, the decision of the High Court B
of Delhi in Arbitration Petition No.477 of 2020, dated 08.04.2021, is set
aside, and Civil Appeal No.4778 of 2022 stands allowed.
52. The parties shall bear their own costs.

Nidhi Jain Appeal allowed.
C
(Assisted by : Surbhi Soni and Rakhi, LCRAs)

D

E

F

G

H