$-20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ARB.P. 1309/2025 Date of Decision: 10.10.2025 IN THE MATTER OF: CLIX CAPITAL SERVICES PVT LTD REGD OFF AT W2/I4, FIRST FLOOR, WEST PATEL NAGAR, NEW DELHI- 110008; AND CORP. OFF AT 6TH FLOOR, GOOD EARTH BUSINESS BAY-2, SECTOR - 58, GURUGRAM 122102, HARYANA. THROUGH LTS AUTHORIZED REPRESENTATIVE SH. ATUL BANSAL ..... PETITIONER Through: Mr. Puneet Raj, Advocate. Versus 1. M/S ATRIUM NEWGEN DIAGNOSTICS PLOT NO I SP SECTOR 28 GOLF COURSE ROAD, GURGAON 122002 (HR) .... RESPONDENT NO.1 2. DR. SANDEEP SHEKHWAT (GUARANTOR) PARTNER OF M/S. ATRIUM NEWGEN DIAGNOSTICS 8-603 CENTRAL PARK- L, SECTOR- 42, GURUGRAM (HR) .... RESPONDENT NO.2 3. DR. NIDHI GOYAL (GUARANTOR) PARTNER OF M/S. ATRIUM NEWGEN DIAGNOSTICS 1304, TOWER-C, OMAXE FOREST AND SPA SECTOR-93B, NOIDA, GAUTAM BUDDHA NAGAR, UP 201301 .... RESPONDENT NO.3 4. DR. SAURABH SINGH GEHLOT (GUARANTOR) S/O BHARAT SINGH GEHLOT, PARTNER OF M/S. ATRIUM NEWGEN DIAGNOSTICS I 496, SECTOR- 15, PART-2, GURUGRAM (HR) ALSO AT DR. SAURABH SINGH GEHLOT (GUARANTOR) S/O BHARAT SINGH GEHLOT, PARTNER OF M/S. ATRIURN NEWGEN DIAGNOSTICS ATS VILL AGE - 2052, SEC 93 - A, NOIDA 201304 .... RESPONDENT NO.4 5. SH. NEERAJ BHANDARI (GUARANTOR) S/O RANJAN NATH BHANDARI PARTNER OF M/S. ATRIURN NEWGEN DIAGNOSTICS A-91 VIDYAT NAGAR AJMER ROAD, JAIPUR, RAJASTHAN .... RESPONDENT NO.5 6. SH. ATUL KUMAR AGARWAL (GUARANTOR) S/O DINESH KUMAR AGARWAL PARTNER OF M/S. ATRIUM NEWGEN DIAGNOSTICS 155 SHANTI NAGAR KINGS ROAD, NEAR SHYAM NAGAR POLICE STATION , JAIPUR 302019 ALSO AT:- SH. ATUL KUMAR AGARWAL (GUARANTOR) S/O DINESH KUMAR AGARWAL PAFTNER OF M/S. ATRIUM NEWGEN DIAGNOSTICS 2- GA-I, DADAWADI, KOTA, RAJASTHAN 324009 .... RESPONDENT NO.6 Through: Mr. Siddhartha Chowdhary, Advocate for R-3 and 6. HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV JUDGEMENT PURUSHAINDRA KUMAR KAURAV, J. (ORAL) 1. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (the Act), seeking appointment of an Arbitrator to adjudicate upon the disputes that have arisen between the parties. 2. Learned counsel for the petitioner, at the outset, submits that as of now, he is not pressing the instant petition against respondent no.5. Therefore, the instant petition stands dismissed as withdrawn against respondent no.5. 3. The case of the petitioner is that respondent no.1 availed a Medical Equipment Term Loan from the petitioner, vide the Facility-cum Hypothecation Agreement dated 30.04.2022 (the Loan Agreement). The remaining respondents stood as guarantors in respect of the said loan under the terms of the Deed of Guarantee dated 30.04.2022 (the Guarantee Deed). 4. As per the petitioner, the respondents have defaulted in repayment of the said loan. The petitioner issued Demand Notice dated 15.03.2024 requesting the respondents to regularize their loan account. Despite the same, the respondents did not take any steps, due to which, the petitioner claims to have terminated the loan facilities vide Final Demand Notice dated 03.03.2025 and has also invoked interim protection under Section 9 of the Act in O.M.P (I) 58/2025. Thereafter, the petitioner has also sent a notice under Section 21 of the Arbitration and Conciliation Act dated 19.08.2025 to the respondents and subsequently, has approached for appointment of the an arbitrator. 5. Clause 8.7 of the Loan Agreement and Clause 10.1 of the Guarantee Deed provide for resolution of disputes arising thereunder, by way of arbitration. They are extracted below, for reference: “8.7 ARBITRATION 8.7.1. ln case of any dispute arlslng out of or in relatlon to the Transaction Documents, the Party shall settle the dispute through arbitration under the lndian Arbitration and Conciliation Act, 1996 (amendments thereto). The arbitratlon shall be referred to a sole arbitrator appointed by the Lender, The venue of arbitration proceedings shall be New Delhi, lndia. All proceedings shall be in English. 8.7.2. The award of the arbitrator shall be final and blnding on the Parlies and the expenses of the arbitration shall be borne in such manner as the arbitrator may determlne.” “10. ARBITRATION, GOVERNING LAW AND JURTSDTCTTON 10.1. Governing Law and Jurisdiction -Subject to clause 10.2 (Arbltration), any disputes under thls Guarantee shalt be governed by and construed in accordance wlth the laws of lndia and be subject to the jurisidiction of the courts at New Delhi. 10.2. Arbitration- All claims, disputes or dlfferences whatsoever which may at any time hereafter arise between Lender and Guarantor(s) hereto concernlng this Guarantee or its construction or effect or as to the rights, duties, obllgations or liabilitles of the Guarantor(s) hereto or otherwise as to any matter in any way connected wlth or arising out of or in relation to the subject matter of this Guarantee shall be referred to arbitration of a sole arbltrator appointed by the Lender. The arbitration proceedings shall be conducted in English in accordance with and subject to the provisions of Arbitratlon and Conclliatlon Act, 1996 or any statutory modificatlon or re-enactment thereof for the time belng in force, The place of arbitration shall be at New Delhl. The Parties agree that any award passed shall be final and binding” 6. The respondents submit that they have various objections with respect to the averments made in the petition, however, they submit that they be granted liberty to raise all the objections before the Arbitrator. 7. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the Act has been fairly well settled. This Court in Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd1, as well, has extensively dealt with the scope of interference at the stage of Section 11. Furthermore, this Court, recently, in Axis Finance Limited Vs. Mr. Agam Ishwar Trimbak2 has held that the scope of inquiry under Section 11 of the Act has been limited to a prima facie examination of the existence of an arbitration agreement. Further, it was also reiterated that the objections relating to the arbitrability of disputes are not to be entertained by a referral Court acting under Section 8 or 11 of the Act. The relevant extract of the aforesaid decision reads as under: - 19.In In Re: Interplay , the Supreme Court confined the analysis under Section 11 of the Act to the existence of an arbitration agreement and under Section 8 of the Act to the existence and validity of an arbitration agreement. Under both the provisions, examination was to be made at the touchstone of Section 7 of the Act. Further, issues pertaining to the arbitrability of the dispute fell outside the scope of both Section 11(6A) and Section 8 of the Act. The material part of the judgement of the Supreme Court in In Re: Interplay reads as under: 164. The 2015 Amendment Act has laid down different parameters for judicial review under Section 8 and Section 11. Where Section 8 requires the referral Court to look into the prima facie existence of a valid arbitration agreement. Section 11 confines the Court’s jurisdiction to the examination of the existence of an arbitration agreement. Although the object and purpose behind both Sections 8 and 11 is to compel parties to abide by their contractual understanding, the scope of power of the referral Courts under the said provisions is intended to be different. The same is also evident from the fact that Section 37 of the Arbitration Act allows an appeal from the order of an arbitral tribunal refusing to refer the parties to arbitration under Section 8, but not from Section 11. Thus, the 2015 Amendment Act has legislatively overruled the dictum of Patel Engineering (supra) where it was held that Section 8 and Section 11 are complementary in nature. Accordingly, the two provisions cannot be read as laying down a similar standard. 165. The legislature confined the scope of reference under Section 11(6A) 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 (supra), 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(6A) should be confined to the existence of an arbitration agreement on the basis of Section 7Similarly, 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 (supra) 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 competencecompetence, 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 minitrial 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(6A) 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 scrutinize 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. 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.” [Emphasis supplied] 20. The effect of In Re: Interplay was further explained by a Three Judge Bench of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning3 wherein the Court declared Vidya Drolia and NTPC Ltd.’s findings qua scope of inquiry under Section 8 and Section 11 of the Act to no longer be compatible with modern principles of arbitration. The material portions of the judgement read as under: “114. In view of the observations made by this Court in In Re : Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima facie existence of the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral Court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re : Interplay (supra). … 118. Tests like the “eye of the needle” and “ex-facie meritless”, although try to minimise the extent of judicial interference, yet they require the referral Court to examine contested facts and appreciate prima facie evidence (however limited the scope of enquiry may be) and thus are not in conformity with the principles of modern arbitration which place arbitral autonomy and judicial non-interference on the highest pedestal.” [Emphasis supplied] 21. Similarly, in BGM and M-RPL-JMCT (JV) v. Eastern Coalfields Ltd4 the Supreme Court succinctly explained the effect of In Re: Interplay on a Referral Court’s powers under Section 11 of the Act. The relevant part of the judgement is as under: 15. … (a) Section 11 confines the Court's jurisdiction to the examination regarding the existence of an arbitration agreement. (b) The use of the term “examination” in itself connotes that the scope of the power is limited to a prima facie determination. (c) 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. Such a legal approach will help the Referral Court in weeding out prima facie non-existent arbitration agreements. (d) 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. However, the expression “examination” does not connote or imply a laborious or contested inquiry. (e) The burden of proving the existence of arbitration agreement generally lies on the party seeking to rely on such agreement. 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. (f) 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, when the Referral Court renders a prima facie opinion, neither the Arbitral Tribunal, nor the Court enforcing the arbitral award is bound by such a prima facie view. If a prima facie view as to the existence of an arbitration agreement is taken by the Referral Court, it still allows the Arbitral Tribunal to examine the issue in depth. [Emphasis supplied] 22. Thus from the above-mentioned authorities it is clear that a Court’s scope of inquiry under Section 11 of the Act has been limited to a prima facie examination of the existence of an arbitration agreement while the adjudication under Section 8 is to be made for both existence and validity. Further, the examination so undertaken under both the said provisions must be within the confines of Section 7 of the Act. Objections relating to arbitrability of disputes are not to be entertained by a referral Court acting under Section 8 or 11 of the Act.” 9. Under the aforesaid circumstances and in view of the fact that a dispute has arisen between the parties and there is an arbitration clause in the Loan Agreement and the Guarantee Deed, this Court appoints Mr. Samrat Nigam, Senior Advocate (Mobile No.+91 98104 24476, e-mail id: samrat.nigam@gamail.com) as the sole Arbitrator. 10. The arbitration would take place under the aegis of the Delhi International Arbitration Centre (DIAC) and would abide by its rules and regulations. The learned Arbitrator shall be entitled to fees as per the Schedule of Fees maintained by the DIAC. 11. The learned arbitrator is also requested to file the requisite disclosure under Section 12 (2) of the Act within a week of entering on reference. 12. 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. 13. Needless to say, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the controversy between the parties. Let a copy of this order be sent to the Arbitrator through electronic mode as well. 14. Accordingly, the instant petition stands disposed of. PURUSHAINDRA KUMAR KAURAV, J OCTOBER 10, 2025 Nc/amg 1 2025 SCC OnLine Del 3022 2 2025:DHC:7477 3 2024 SCC OnLine SC 1754 4 2025 SCC OnLine SC 1471 --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ 10