Arbitration — Section 11(6) & 11(6-A), Arbitration and Conciliation Act, 1996 — Consortium Contracts — Individual Consortium Member — Invocation of Arbitration — Prima Facie Test — Kompetenz-Kompetenz — Limited Scope of Referral Court

Arbitration — Section 11(6) & 11(6-A), Arbitration and Conciliation Act, 1996 — Consortium Contracts — Individual Consortium Member — Invocation of Arbitration — Prima Facie Test — Kompetenz-Kompetenz — Limited Scope of Referral Court

1. Section 11 jurisdiction — Limited to prima facie existence of arbitration agreement
   At the referral stage under Section 11(6) read with Section 11(6-A), the court’s enquiry is confined to a prima facie examination of the existence of an arbitration agreement and not to adjudication on contentious issues of authority, capacity, or maintainability. (Paras 14–15, 17–19)

2. Consortium contracts — Individual member invoking arbitration — Issue for Arbitral Tribunal
   Whether an individual member of a consortium is competent to invoke arbitration, in the absence of consent of other members, depends upon contractual terms and surrounding facts and must be examined in detail by the Arbitral Tribunal under Section 16. (Paras 16, 19)

3. Distinction between existence of arbitration agreement and entitlement to invoke
   Objections relating to the capacity or authority of a party to invoke arbitration do not go to the existence of the arbitration agreement and therefore fall outside the limited scrutiny of the referral court. (Paras 14–16, 19)

4. Doctrine of kompetenz-kompetenz — Primacy of Arbitral Tribunal
   Issues relating to jurisdiction, validity of invocation, continuation of consortium, consent of members, and maintainability of claims are matters squarely within the jurisdiction of the Arbitral Tribunal under Section 16. (Paras 14–17, 19)

5. Incorporation of arbitration clause — Purchase Orders and GCC
   Where tender documents and GCC containing an arbitration clause are incorporated by reference into Purchase Orders, a prima facie arbitration agreement exists for the purpose of Section 11. (Paras 2, 11.1–11.2, 19)

6. Referral court — No mini-trial at Section 11 stage
   Entertaining detailed factual and contractual disputes at the referral stage would amount to conducting a mini-trial, contrary to legislative intent and settled precedent mandating minimal judicial intervention. (Paras 15, 17–19)

7. Precedential consistency — Prior reference in identical contractual framework
   Where this Court has earlier referred disputes arising from the same contractual framework to arbitration, the referral court is justified in adopting a similar course, leaving all objections open to the Arbitral Tribunal. (Para 20)

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ANALYSIS OF FACTS

1. APGENCO issued a tender for an EPC contract for the Rayalaseema Thermal Power Plant, permitting participation through a consortium, governed by GCC containing Clause 22.2 (arbitration clause) (Paras 3–4).

2. A consortium comprising Tecpro Systems Ltd. (lead), VA Tech Wabag Ltd., and Gammon India Ltd. was constituted and awarded the contract (Paras 4–5).

3. Following financial distress of the first respondent, VA Tech Wabag assumed the role of lead member, and Tecpro later entered CIRP and liquidation (Para 5).

4. Tecpro issued notices alleging breaches by APGENCO and unilaterally invoked arbitration; APGENCO objected on the ground that an individual consortium member could not do so (Paras 6–7).

5. The High Court allowed the application under Section 11(6) and constituted the Arbitral Tribunal, which order was challenged before the Supreme Court (Paras 7–8).

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ANALYSIS OF LAW

1. Statutory scheme under Sections 11(6-A) and 16
   The Act confines the referral court’s role to a prima facie determination of the existence of an arbitration agreement, leaving all jurisdictional and maintainability objections to the Arbitral Tribunal (Paras 14–17).

2. Consortium-related objections
   Questions whether:

   • the consortium continues to exist,

   • consent of all members is required,

   • an individual member is a “veritable party”, or

   • claims survive liquidation,
     involve mixed questions of fact and law and must be decided by the Arbitral Tribunal (Paras 16, 19).

3. Consistency with Cox & Kings and prior precedents
   The Court reaffirmed that even in cases involving non-signatories or consortium members, the referral court must only undertake a prima facie examination and defer deeper scrutiny to the Tribunal (Paras 16–17).

4. Minimal judicial intervention
   The judgment reiterates the legislative policy against pre-arbitral judicial interference and cautions courts against conducting a detailed evidentiary enquiry at the Section 11 stage (Paras 15, 17–19).

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FINAL RESULT

• The Civil Appeals were dismissed.

• The order of the High Court constituting the Arbitral Tribunal was upheld.

• All objections regarding individual invocation of arbitration, continuation of the consortium, consent of members, and maintainability were left open to be decided by the Arbitral Tribunal under Section 16.

• No order as to costs. (Paras 21–22)