About the Court and the Case

The Supreme Court of India, the apex judicial authority, has consistently clarified and strengthened the legal framework around arbitration under the Arbitration and Conciliation Act, 1996. One such pivotal decision came on 14 May 2025, in the case titled Office for Alternative Architecture v. IRCON Infrastructure and Services Ltd. (2025 INSC 665), wherein the Court deliberated on the scope of power under Section 11 of the Arbitration and Conciliation Act.

This case marks a significant clarification in arbitration jurisprudence—particularly regarding whether courts, while appointing arbitrators under Section 11, can bifurcate claims into arbitrable and non-arbitrable categories. The Supreme Court unequivocally held that such bifurcation is impermissible, emphasizing that arbitrability should be assessed by the arbitral tribunal itself.

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About the Judgment

Key Legal Issue:

Whether, at the stage of appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, a court can determine that some claims are non-arbitrable and thus exclude them from the scope of arbitration.

Factual Background:

The appellant, Office for Alternative Architecture, approached the Supreme Court after the Delhi High Court appointed an arbitrator but excluded certain claims (para 48(ii), (iii), and (iv) of the petition), citing them as non-arbitrable “excepted matters” under clauses 50 and 50.2 of the agreement.

Appellant’s Argument:

The appellant contended that under Section 11(6A) of the Act, the court’s role is confined to examining the existence of a valid arbitration agreement. Once such an agreement exists, all disputes must be referred to arbitration, and the tribunal should determine arbitrability—not the court.

Respondent’s Stand:

The respondent relied on Emaar India Ltd. v. Tarun Aggarwal Projects LLP [(2023) 13 SCC 661], where it was held that non-arbitrable matters could be weeded out at the Section 11 stage.

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Court’s Findings

The Supreme Court referred to its seven-judge Constitution Bench ruling in Interplay Between Arbitration Agreements and the Indian Stamp Act, 1899 [2023 INSC 1066], where it was emphasized that courts must not delve into “other issues” beyond checking for a prima facie arbitration agreement at the Section 11 stage.

Building on that precedent, the Court reiterated through its three-judge bench in SBI General Insurance Co. Ltd. v. Krish Spinning [2024 INSC 532], that arbitrability cannot be adjudicated at the threshold stage by the court.

Final Holding:

“The High Court fell in error in bisecting the claim of the appellant into two parts, one arbitrable and the other not arbitrable, when it found arbitration agreement to be there for settlement of disputes between the parties. The correct course for the High Court was to leave it open to the party to raise the issue of non-arbitrability of certain claims before the arbitral tribunal, which, if raised, could be considered and decided by it.”

The Court allowed the appeal, set aside the exclusion of claims by the Delhi High Court, and reaffirmed that the arbitral tribunal has the competence to rule on its own jurisdiction under Section 16 (Kompetenz-Kompetenz doctrine).

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Implications

This decision reinforces the non-interventionist approach of courts in arbitration matters, which is crucial for promoting India as an arbitration-friendly jurisdiction. By ensuring that courts confine their role to verifying the existence of an arbitration agreement, the judgment ensures speedier referral to arbitration and prevents unnecessary judicial delay.

Practically, it means that:

• Parties cannot escape arbitration by prematurely labeling certain claims as “non-arbitrable” during appointment stages.
• The arbitral tribunal remains the primary forum to decide all matters including arbitrability.
• Courts will avoid encroaching upon the merits or scope of claims at the preliminary stages.

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FAQs

Q1: Does this ruling apply to all types of arbitrations?
A: Yes, it applies universally to domestic and international commercial arbitrations under the 1996 Act.

Q2: What happens if a claim is truly non-arbitrable?
A: The arbitral tribunal may reject such claims during proceedings, and its ruling can be reviewed at the enforcement stage under Section 34 or 48.

Q3: Can the High Court still appoint arbitrators under Section 11?
A: Yes, but their jurisdiction is limited to verifying whether a valid arbitration agreement exists.

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Also Read :

• Wadhwa & Co. Legal Internship (June–Sept 2025 | New Delhi | Hybrid)
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• Virtual Internship under Adv. Gautam Kumar (June–Sept 2025 | Online)