Tavasya Ssf (C/O Tavasya Capital … vs Ministry Of External Affairs & Anr on 20 April, 2026

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    Delhi High Court

    Tavasya Ssf (C/O Tavasya Capital … vs Ministry Of External Affairs & Anr on 20 April, 2026

                      $~1
                      *       IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                             Date of Decision : 20.04.2026
                      +       ARB.P. 1589/2025
                              TAVASYA SSF (C/O TAVASYA CAPITAL MANAGERS
                              LLP)                                   .....Petitioner
                                           Through: Mr. Anirban Bhattacharya, Mr.
                                                    Apoorv Agarwal, Mr. Manthan
                                                    Dixit and Ms. Tanushvi Singh,
                                                    Advocates.
                                                 versus
                              MINISTRY OF EXTERNAL AFFAIRS & ANR.
                                                                    .....Respondents
                                            Through: Mr. S.D. Sanjay, Additional
                                                     Solicitor General along with
                                                     Mr. Sharang Dhulia, CGSC,
                                                     Ms. Nikita Sethi, Mr. Chetan
                                                     Jadon, Advocate and Ms.
                                                     Archana     Chhibber,     Legal
                                                     Consultant for Respondent No.
                                                     1.
                                                     Mr. Uttam Dutt, Senior
                                                     Advocate along with Mr.
                                                     Debarshi Bhadra, Ms. Sonakshi
                                                     Singh, Mr. Kumar Bhaskar, Mr.
                                                     Naman Kumar and Mr. Rahul
                                                     Singh,      Advocates       for
                                                     Respondent No. 2.
                              CORAM:
                              HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
                              SHANKAR
    
                      %                          JUDGEMENT (ORAL)
    
                      HARISH VAIDYANATHAN SHANKAR, J.
    

    1. The present Petition has been filed under Section 11 of the
    Arbitration and Conciliation Act, 1996 [“Act”], seeking the

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    constitution of a three-member Arbitral Tribunal for adjudication of
    disputes inter se the parties arising out of the EPC Agreement dated
    31.03.2017 [“Agreement”].

    SPONSORED

    2. The material on record reflects that the Agreement stipulates a
    dispute resolution mechanism, which contemplates reference of
    disputes to Arbitration by a three-member Arbitral Tribunal. The
    relevant stipulation is contained in Clause 26.3.1 of the Agreement,
    which reads as under:-

    “26.3.1 Any Dispute which is not resolved amicably by
    conciliation, as provided in Clause 26.2, shall be finally
    decided by reference to arbitration by a Board of
    Arbitrators appointed in accordance with Clause 26.3.2.
    Such arbitration shall be held in accordance with the
    Rules of Arbitration of the International Centre for
    Alternative Dispute Resolution, New Delhi (the
    “Rules”), or such other rules as may be mutually
    agreed by the Parties, and shall be subject to the
    provisions of the Arbitration Act. The venue of such
    arbitration shall be [Delhi], and the language of
    arbitration proceedings shall be English.”

    3. Mr. S.D. Sanjay, learned Additional Solicitor General
    [“Learned ASG”] appearing on behalf of Respondent No. 1, opposes
    the constitution of the Arbitral Tribunal primarily on three grounds.
    First, that there exists no privity of contract between the Petitioner and
    the Respondents. Second, that the Petitioner seeks to enforce rights
    allegedly acquired under the Sale Certificate dated 06.08.2024 [“Sale
    Certificate”], though no such enforceable rights stand transferred
    thereunder. Third, that Respondent No. 2 has raised serious objections
    to the invocation of the Arbitration clause and, therefore, the element
    of consent, central to the said clause, is absent.

    4. Elaborating the first objection, learned ASG, places reliance
    upon the definition of “parties” as contained in the Agreement to

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    submit that the contracting parties were C&C Constructions Limited
    [“C&C”] and M/s. Engineering Projects (India) Limited [“EPIA”].
    Therefore, since the Petitioner is not named in the Agreement, learned
    ASG contends that the Petitioner cannot qualify as a party within the
    meaning of the Agreement.

    5. In support of the second objection, learned ASG submits that
    the Sale Certificate does not operate to vest in the Petitioner the
    contractual rights of C&C so as to enable it to claim status as
    successor to the erstwhile Joint Venture [“JV”] partner with whom
    the Respondent No. 1 had entered into the Agreement.

    6. He also submits that, in fact, the net consequence of the said
    Sale Certificate is that C&C ceases to retain any subsisting interest
    and, therefore no occasion arises for the Petitioner to exercise rights
    which were personal and exercisable only by C&C.

    7. Learned ASG further submits that the Sale Certificate pertains
    only to transfer of identified assets and cannot be construed as
    effecting continuation or novation of the legal relationship that existed
    between the original JV partners.

    8. Learned ASG submits that, even assuming arguendo that
    certain rights stood acquired by the Petitioner, such rights, at best,
    would remain confined to claims inter se the JV partners and could
    not be enforced against Respondent No. 1 under the Agreement.

    9. Turning to his third objection, learned ASG relies upon the
    Arbitration clause to contend that the contractual mechanism
    envisages nomination of one Arbitrator by each JV partner, whereafter
    the two nominated Arbitrators are to appoint the Presiding Arbitrator.

    10. Learned ASG further submits that, in the present case,

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    Respondent No. 2 has raised serious objections to the invocation of
    the Arbitration clause and, therefore, the element of consent, which
    lies at the heart of arbitral reference, is absent. If the Courts were to
    constitute the Tribunal notwithstanding such objection, the same
    would run contrary to the consensual spirit underlying the Act.

    11. Learned ASG, therefore, submits that the arbitration clause has
    become unworkable in the present factual matrix in the absence of
    consent and therefore the disputes are not amenable to reference to
    arbitration.

    12. Mr. Uttam Dutt, learned Senior Counsel appearing on behalf of
    Respondent No. 2, supplements the submissions advanced by the
    learned ASG.

    13. At the outset, learned senior counsel for the Respondent No. 2
    raises a preliminary objection as to the locus of the Petitioner,
    contending that recourse to Arbitration or initiation of proceedings can
    be undertaken only by a party to the Agreement. He submits that the
    Petitioner is neither a partner of the JV nor privy to the original
    transaction, and thus a complete alien to the transaction.

    14. He further submits that the expression “interest in the JVs”, as
    occurring in the Sale Certificate, cannot be interpreted so broadly as to
    include legal and contractual rights of a JV partner under the
    Agreement, and must remain confined to receivables or other claims
    inter se the JV partners.

    15. Learned senior counsel, while concluding, contends that no
    question arises of the Petitioner stepping into the shoes of the
    erstwhile JV partner, particularly when the original arrangement
    between the JV partners has itself come to an end. Learned senior

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    counsel further submits that, in any event, the original Agreement did
    not permit assignment of the contractual rights now sought to be
    asserted.

    16. Per Contra, Mr. Anirban Bhattacharya, learned counsel
    appearing on behalf of the Petitioner, submits that the jurisdiction of
    this Court under Section 11 of the Act is extremely limited and
    circumscribed. Learned counsel contends that the Hon‟ble Supreme
    Court, in a catena of Judgments, has succinctly delineated the narrow
    scope of judicial scrutiny permissible at the stage of exercise of
    powers under Section 11 of the Act.

    17. He further submits that this Court, while exercising jurisdiction
    under Section 11 of the Act, functions essentially as a Referral Court,
    and it is therefore impermissible to undertake an elaborate
    adjudicatory exercise akin to conducting a mini-trial on disputed
    questions of law or fact.

    18. Learned senior counsel further submits that, in the present case,
    the Agreement itself contemplates that the successors or permitted
    assigns of the original JV or its constituents would be entitled to
    pursue such claims as may arise under the Agreement against the
    parties thereto. In this regard, he places reliance upon the recital
    describing the parties to the Agreement, which reads as under:

    “ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

    THIS AGREEMENT is entered into on this the 31st Day of March,
    2017

    BETWEEN

    The PRESIDENT OF INDIA through MINISTRY OF
    EXTERNAL AFFAIRS INDIA, represented by its Joint
    Secretary (DPA-III) and having its principal office at Jawaharlal
    Nehru Bhawan, Janpath, New Delhi, India (hereinafter referred

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    to as the “Authority” which expression shall, unless repugnant
    to the context or meaning thereof, include its administrators,
    successors and assigns) of One Part;

    AND

    M/s. EPI-C&C JV [M/s. C & C Constructions Ltd. in JV with
    M/s. Engineering Projects (India) Ltd.] means the selected
    bidder having its registered office at Plot No. 70, Institutional
    Sector-32, Gurugram – 122001, Haryana, India, (hereinafter
    referred to as the “Constructor” which expression shall, unless
    repugnant to the context or meaning thereof, include its
    successors and permitted assigns) of the Other Part.”

    19. Learned counsel further refers to and places reliance upon
    Clause 27.12 of the Agreement to contend that a plain reading thereof
    makes it apparent that the Agreement was intended to bind, and enure
    to the benefit of, the respective successors and permitted assigns of the
    parties. Clause 27.12 reads as follows:-

    “27. 12 Successors and assigns
    This Agreement shall be binding upon, and inure to the benefit of
    the Parties and their respective successors and permitted assigns.”

    20. Learned counsel submits that, in view of the Sale Certificate,
    the Petitioner is, in fact, the „successor in interest‟ insofar as the JV is
    concerned and consequently the present Petition is maintainable as
    against the Respondents. The relevant portion of the Sale Certificate
    reads as follows:-

    “DESCRIPTION OF ASSETS

    All investments held by C&C Constructions Limited as recorded in
    its audited financial statements for the Financial Year 22-23
    including to its investments/shareholding in subsidiaries associate
    companies, special purpose vehicles and interest in the joint
    ventures.”

    21. Learned counsel further draws the attention of this Court to the
    Judgment of the Hon‟ble Supreme Court in Andhra Pradesh Power

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    Generation Corporation Limited (APGENCO) versus Tecpro
    Systems Limited [(2026) 3 SCC 491] and in particular, Paragraph
    Nos. 13 to 19 thereof. The said paragraph reads as under:-

    “13. In our considered view, these objections must be answered in
    the broader perspective of the nature and scope of the jurisdiction
    exercised by a referral court under Section 11 of the Act. With the
    introduction of the statutory restraint under Section 11(6-A), the
    legislature has consciously confined the domain of judicial scrutiny
    to the mere “existence of an arbitration agreement”. This legislative
    design is further reinforced by the express empowerment of the AT
    under Section 16 to rule on; (i) its own jurisdiction, (ii) objections
    with respect to the very existence of the arbitration agreement, and
    also (iii) objections relating to the validity of such an agreement.
    The statutory scheme thus envisages a clear demarcation between
    the limited threshold scrutiny at the referral stage on the one hand
    and the substantive jurisdictional adjudication to be undertaken by
    the AT on the other.

    14. The legislative policy under the 1996 Act strongly favours
    minimal judicial intervention at the pre-arbitral stage. A long line
    of precedents, such as Duro Felguera, S.A. v. Gangavaram Port
    Ltd [Duro Felguera
    , S.A. v. Gangavaram Port Ltd, (2017) 9 SCC
    729 : (2017) 4 SCC (Civ) 764] , the Constitution Bench decision
    in Interplay Between Arbitration Agreements under Arbitration
    Act, 1996
    & Stamp Act, 1899, In re [Interplay Between Arbitration
    Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re,
    (2024) 6 SCC 1] , and SBI General Insurance Co. Ltd. v. Krish
    Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC
    1 : (2025) 3 SCC (Civ) 567] have authoritatively settled that the
    enquiry under Section 11 is confined to a prima facie determination
    of the existence of an arbitration agreement and no further.
    The
    referral court is required to undertake only a prima
    facie determination of the existence of an arbitration agreement
    [Goqii Technologies (P) Ltd. v. Sokrati Technologies (P) Ltd.,
    (2025) 2 SCC 192 : (2025) 1 SCC (Civ) 47] , and refrain from
    entering into contentious factual or legal issues related to authority,
    capacity, arbitrability, maintainability, or merits of claims.

    15. It is certainly a matter of institutional discipline for the referral
    courts to enable “parties” to identify and exercise alternative
    remedies, particularly that of arbitration, with clarity and
    consistency. The question whether a member of a consortium can
    itself invoke Section 11 of the 1996 Act is not one that admits of a
    monolithic or a uniform answer. Answer to that question will
    necessarily depend on enquiry into the terms of the principal

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    contract, as well as the Consortium agreement. The specific terms
    of the Consortium agreement, parties to that agreement, and the
    nature of the rights and mutual obligations that the agreement
    creates will have to be examined in detail. The Reference Court
    will, however, confine its enquiry only to a prima facie satisfaction
    as to whether a member of a consortium qualifies as a “party” to
    the arbitration agreement. This prima facie satisfaction is sufficient
    for the referral court to constitute and refer the dispute to the AT.

    16. Thereafter, it is for the AT to undertake the detailed enquiry as
    to whether a member of the consortium is in fact a veritable party
    to the arbitration agreement or not. This is exactly the limited
    enquiry permitted and prescribed in Cox & Kings [Cox & Kings
    Ltd. v. SAP India (P) Ltd.
    , (2024) 4 SCC 1 : (2024) 2 SCC (Civ) 1 :

    (2024) 251 Comp Cas 680] , the relevant portion of which is as
    under : (SCC pp. 76 & 90-91, paras 126, 169 & 170.12)
    “126. Evaluating the involvement of the non-signatory party in
    the negotiation, performance, or termination of a contract is an
    important factor for a number of reasons. First, by being
    actively involved in the performance of a contract, a non-

    signatory may create an appearance that it is a veritable party
    to the contract containing the arbitration agreement; second,
    the conduct of the non-signatory may be in harmony with the
    conduct of the other members of the group, leading the other
    party to legitimately believe that the non-signatory was a
    veritable party to the contract; and third, the other party has
    legitimate reasons to rely on the appearance created by the
    non-signatory party so as to bind it to the arbitration
    agreement.

    ***

    169. In case of joinder of non-signatory parties to an
    arbitration agreement, the following two scenarios will
    prominently emerge : first, where a signatory party to an
    arbitration agreement seeks joinder of a non-signatory party to
    the arbitration agreement; and second, where a non-signatory
    party itself seeks invocation of an arbitration agreement. In
    both the scenarios, the referral court will be required to prima
    facie rule on the existence of the arbitration agreement and
    whether the non-signatory is a veritable party to the arbitration
    agreement. In view of the complexity of such a determination,
    the referral court should leave it for the Arbitral Tribunal to
    decide whether the non-signatory party is indeed a party to the
    arbitration agreement on the basis of the factual evidence and
    application of legal doctrine. The Tribunal can delve into the
    factual, circumstantial, and legal aspects of the matter to
    decide whether its jurisdiction extends to the non-signatory
    party. In the process, the Tribunal should comply with the

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    requirements of principles of natural justice such as giving
    opportunity to the non-signatory to raise objections with regard
    to the jurisdiction of the Arbitral Tribunal. This interpretation
    also gives true effect to the doctrine of competence-
    competence by leaving the issue of determination of true
    parties to an arbitration agreement to be decided by the
    Arbitral Tribunal under Section 16.

    ***
    170.12. At the referral stage, the referral court should leave it
    for the Arbitral Tribunal to decide whether the non-signatory
    is bound by the arbitration agreement.”

    (emphasis supplied)

    17. Beyond the prima facie enquiry, it should be the discipline of
    the referral court to refrain from undertaking a detailed enquiry on
    basis of evidence to arrive at a finding of fact in the nature of a
    “proof”. The scope of such an enquiry, by virtue of Section 11(6-
    A) is very well articulated in the decision of this Court in Interplay
    Between Arbitration Agreements under Arbitration Act, 1996 &
    Stamp Act, 1899, In re [Interplay Between Arbitration Agreements
    under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6
    SCC 1] wherein this Court observed : (SCC pp. 87-88, paras 165-

    67)
    “165. The legislature confined the scope of reference under Section
    11
    (6-A) to the examination of the existence of an arbitration
    agreement. The use of the term “examination” in itself connotes
    that the scope of the power is limited to a prima facie
    determination. Since the Arbitration Act is a self-contained code,
    the requirement of “existence” of an arbitration agreement draws
    effect from Section 7 of the Arbitration Act. In Duro
    Felguera [Duro Felguera, S.A. v. Gangavaram Port Ltd
    , (2017) 9
    SCC 729 : (2017) 4 SCC (Civ) 764] , this Court held that the
    Referral Courts only need to consider one aspect to determine the
    existence of an arbitration agreement — whether the underlying
    contract contains an arbitration agreement which provides for
    arbitration pertaining to the disputes which have arisen between the
    parties to the agreement. Therefore, the scope of examination under
    Section 11(6-A) should be confined to the existence of an
    arbitration agreement on the basis of Section 7. Similarly, the
    validity of an arbitration agreement, in view of Section 7, should be
    restricted to the requirement of formal validity such as the
    requirement that the agreement be in writing. This interpretation
    also gives true effect to the doctrine of competence-competence by
    leaving the issue of substantive existence and validity of an
    arbitration agreement to be decided by Arbitral Tribunal under
    Section 16.
    We accordingly clarify the position of law laid down
    in
    Vidya Drolia [Vidya Drolia v. Durga Trading Corpn., (2021) 2

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    SCC 1 : (2021) 1 SCC (Civ) 549] in the context of Section 8 and
    Section 11 of the Arbitration Act.

    “166. The burden of proving the existence of arbitration
    agreement generally lies on the party seeking to rely on such
    agreement. In jurisdictions such as India, which accept the
    doctrine of competence-competence, only prima facie proof of
    the existence of an arbitration agreement must be adduced
    before the Referral Court. The Referral Court is not the
    appropriate forum to conduct a mini-trial by allowing the
    parties to adduce the evidence in regard to the existence or
    validity of an arbitration agreement. The determination of the
    existence and validity of an arbitration agreement on the basis
    of evidence ought to be left to the Arbitral Tribunal. This
    position of law can also be gauged from the plain language of
    the statute.

    167. Section 11(6-A) uses the expression “examination of the
    existence of an arbitration agreement”. The purport of using
    the word “examination” connotes that the legislature intends
    that the Referral Court has to inspect or scrutinise the dealings
    between the parties for the existence of an arbitration
    agreement. Moreover, the expression “examination” does not
    connote or imply a laborious or contested inquiry. [ P.
    Ramanatha Aiyar, The Law Lexicon (2nd Edn., 1997) 666.] On
    the other hand, Section 16 provides that the Arbitral Tribunal
    can “rule” on its jurisdiction, including the existence and
    validity of an arbitration agreement. A “ruling” connotes
    adjudication of disputes after admitting evidence from the
    parties. Therefore, it is evident that the Referral Court is only
    required to examine the existence of arbitration agreements,
    whereas the Arbitral Tribunal ought to rule on its jurisdiction,
    including the issues pertaining to the existence and validity of
    an arbitration agreement. A similar view was adopted by this
    Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre
    Ltd. [Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.,
    (2005) 7 SCC 234 : (2005) 127 Comp Cas 97] ”

    18. Following this Court’s mandate in the above decision, this
    Court in Bihar State Food and Civil Supply Corpn. Ltd. v. Sanjay
    Kumar[Bihar State Food
    and Civil Supply Corpn. Ltd. v. Sanjay
    Kumar, (2026) 4 SCC 649 : 2025 SCC OnLine SC 1604]
    explaining the contemporary legal position of the referral court
    emphasised that : (SCC p. 671, para 28)
    “28. The curtains have fallen. Courts exercising jurisdictions under
    Section 11(6) and Section 8 must follow the mandate of sub-
    section (6-A), as interpreted and mandated by the decisions of this
    Court and their scrutiny must be „confine(d) to the examination of
    the existence of the arbitration agreement‟.”

    (emphasis in original)
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    19. Once the High Court was satisfied that an arbitration
    agreement prima facie existed, an aspect neither seriously disputed
    nor refutable at this stage, its decision to constitute the AT cannot
    be faulted. In the earlier part of our judgment, we have reproduced
    the detailed arguments of the appellants and respondents on the
    issue of maintainability only to draw a distinction between a prima
    facie consideration of such contentions for the purpose of Section
    11
    on the one hand and for a detailed examination by the AT.
    While we hold that there is certainly a prima facie case for
    referring the dispute to arbitration under Section 11, a detailed
    scrutiny on the basis of evidence must be left to AT.”

    22. A reading of the aforesaid Judgment thus indicates that this
    Court, while acting as a referral Court, is required to confine its
    enquiry only to a prima facie satisfaction as to whether the Petitioner
    can assert a credible claim of being a party, successor, or person
    claiming through a party to the arbitration agreement.

    23. In the present case, this Court is prima facie of the opinion
    that the Sale Certificate expressly records transfer, inter alia, of the
    “interest in the joint ventures” held by C&C. Consequently, at this
    threshold stage, a prima facie basis exists for the Petitioner to assert
    rights flowing from the position earlier held by C&C as a constituent
    of the JV. The expression “interest in the joint ventures”, when read
    conjointly with Clause 27.12 as well as the recital and description of
    parties in the Agreement, lends support to the aforesaid prima facie
    view.

    24. Furthermore, this Court also takes note of Paragraph No. 20 of
    the afore-cited judgment, which is reproduced hereunder:

    “20. Whether the first respondent has validly invoked arbitration
    individually, whether the Consortium continues to exist, whether
    consent of other Consortium partners was necessary, and whether
    claims are maintainable after commencement of liquidation, are all
    matters which may legitimately be raised, contested and
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    determined before the AT under Section 16. Entertaining these
    questions here would amount to conducting a mini trial at the
    Section 11 stage, contrary to the settled principles of minimal
    judicial intervention and kompetenz-kompetenz.”

    25. A plain reading of the aforesaid observations makes it
    apparent that the objections canvassed by the Respondents herein are
    of the very nature which the Hon‟ble Supreme Court has held ought to
    be relegated to the learned Arbitral Tribunal for adjudication under
    Section 16 of the Act, rather than being conclusively examined at the
    Section 11 stage.

    26. In view of the foregoing discussion, this Court deems it
    appropriate that the matter may be referred to arbitration by a three-
    member Arbitral Tribunal, in consonance with the Arbitration Clause
    as set out in the Agreement, for the purpose of the resolution of
    disputes between the parties.

    27. The material on record indicates that the valuation of the subject
    matter of the disputes is stated to be approximately Rs. 500 crores.

    28. Accordingly, the Respondent No. 1 has nominated Hon’ble
    Mr. Justice (Retd.) Ajit Sinha, Former Judge of Hon’ble
    Jharkhand High Court to enter upon the reference and adjudicate
    the disputes inter se the parties.

    29. Further, since the original party to the JV, who was vested with
    the right to nominate the learned Arbitrator, has now been replaced by
    the Petitioner, this Court deems it appropriate to nominate an
    Arbitrator on their behalf.

    30. Accordingly, this Court hereby requests Hon’ble Mr. Justice
    (Retd.) K.R. Shriram, Former Chief Justice of Rajasthan High
    Court, ( ) to enter upon the reference and

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    adjudicate the disputes inter se the parties.

    31. The learned Arbitrators, so appointed hereinabove, are
    requested to appoint the Presiding Arbitrator within a period of two
    (02) weeks from today, whereafter the Arbitral proceedings may
    commence.

    32. The learned Arbitral tribunal, so constituted, may proceed with
    the arbitration proceedings, subject to furnishing to the parties the
    requisite disclosures as required under Section 12(2) of the Act.

    33. The parties shall share the learned Arbitrators‟ fee and arbitral
    costs equally.

    34. All rights and contentions of the parties in relation to the
    claims/counter claims are kept open, to be decided by the learned
    Arbitrator on their merits, in accordance with law.

    35. Needless to state, nothing in this order shall be construed as an
    expression of opinion of this Court on the merits of the controversy.

    36. Let a copy of the said Order be sent to the learned Arbitrators
    through all permissible modes, including electronic mode as well.

    37. Accordingly, the present Petition, along with pending
    Application(s), if any, stands disposed of in the above-stated terms.

    HARISH VAIDYANATHAN SHANKAR, J.

    APRIL 20, 2026/nd/jk/DJ

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