Delhi High Court
Vedanta Limited vs Gujarat State Petroleum Corporation … on 28 July, 2025
Author: Subramonium Prasad
Bench: Subramonium Prasad
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 28th JULY, 2025
IN THE MATTER OF:
+ ARB.P. 853/2023 & I.A. 20643/2023
VEDANTA LIMITED .....Petitioner
Through: Mr Jayant Mehta, Sr. Advocate with
Mr. Sulabh Rewari, Ms. Vasudha
Sharma, Ms. Tina Aneja and Mr.
Shubhansh Thakur, Advs.
versus
GUJARAT STATE PETROLEUM CORPORATION LTD.
.....Respondent
Through: Mr. Ramji Srinivasan, Sr. Advocate
with Mr. Piyush Joshi, Ms. Sumiti
Yadava, Ms. Meghna Sengupta, Ms.
Vatsla Bhatia and Mr. Yagya Sharma,
Advs.
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The present petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 has been filed by the Petitioner seeking appointment
of the Respondent’s nominee Arbitrator to adjudicate upon the disputes that
have arisen between the Petitioner and the Respondent in relation to the
Request for Proposal bearing No.RFP/RJ-ON-90/1/2023/1 dated 28.12.2022
(“RFP”) and the Gas Sales Agreement (“GSA”).
2. Shorn of unnecessary details, the facts leading to filing of the present
petition are as follows:
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a) It is stated that an Oil & Gas Block in Barmer, Rajasthan i.e., RJ-ON-
90/1 Block (“Gas Block”), was awarded by the Government of India
to a Joint Venture comprising of various entities namely Cairn Energy
Hydrocarbons Limited and, Oil and Natural Gas Corporation Limited
and the Petitioner herein (collectively referred to as Contractors).
b) Thereafter, the Government of India entered into a Production Sharing
Contract (“PSC”) with the Joint Venture for the Oil & Gas Block. It is
stated that the Petitioner is the Operator of the Gas Block and is
authorised to act on behalf of the Joint Venture.
c) On 28.12.2022, the Petitioner issued a Notice Inviting Offers along
with the Request for Proposal (“RFP”) and a Gas Sales Agreement
(GSA) inviting offers from companies interested to offtake all or
portion of gas volumes available for sale from the Gas Block. It is
stated that the Clause 18 of the GSA contains an Arbitration Clause.
d) As per the requirement in the Bid Process on e-Tendering Portal i.e.,
Mjunction, the Respondent uploaded a signed copy of the GSA and
the RFP on 12.01.2023. It is stated that in addition to the above
documents, the Respondent also uploaded signed Forms C1 & C6. It
is pertinent to mention that the stand of the Respondent is that the
Respondent has only initialled the pages and has not signed the pages
for a valid contract.
e) On 18.01.2023 the bidding was closed, and the Respondent emerged
as one of the successful bidders and was allocated the single highest
quantity of gas. On the very same day the Respondent was sent an
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email by Mjunction on behalf of the Petitioner intimating the
Respondent about the results of the Bidding Process and also
informing the Respondents about the quantity of Gas allocated to the
Respondent as determined in terms of Clause 4.2 of the RFP.
f) Subsequently an email dated 19.01.2023 was sent by the Petitioner to
the Respondent wherein a fresh copy of the filled up and signed GSA
was attached for formal signing in terms of Clause 1.3.3 of the RFP.
Several reminder emails dated 20.01.2023, 27.01.2023, 01.02.2023,
10.02.2023, 17.02.2023 and 22.02.2023 were also sent to the
Respondents regarding the same. However, no response or objection
was raised by the Respondent.
g) On 27.02.2023, a Letter bearing No. COM/RJ/GSPC/2023/12 was
sent by the Petitioner to the Respondent wherein it was stated that the
Respondent has emerged as the largest buyer of Gas from the Gas
Block in the Auction Process and has been allocated gas volume of
1,907,543 scm/day. It is further stated that both the parties reached an
agreement regarding the terms and conditions as laid in the GSA post
which the Petitioner had shared the signed copy of the Final GSA on
27.01.2023 and countersigned scanned GSA is awaited from the
Respondent.
h) Vide email dated 27.02.2023 sent by the Respondent, the Petitioner
was informed that on account of unforeseeable and adverse material
changes in the natural gas market due to continuous fall in gas prices,
it is not feasible for the Respondent to market this gas to downstream
customers at the current bid price. It was further stated that the
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Respondent is continuously making efforts to sell the gas to
downstream customers and would revert to the Petitioner.
i) On 28.02.2023, the Petitioner, in response to the aforementioned, sent
an email stating that the contract between the parties stood concluded
when the Petitioner accepted the Respondent’s bid for allocation of
gas and are now only waiting for the Respondent to countersign the
final-signed GSA, which has been sent to the Respondent vide email
dated 27.01.2023, as early as possible.
j) Vide a letter dated 07.03.2023 bearing No. COM/RJ/DGH/2023/14,
the Petitioner wrote to the Ministry of Petroleum & Natural Gas
informing them about the whole Auction Process that has taken place
for the Gas Block and further apprising them of the fact that the GSA
has yet not been signed by the Respondent. The Petitioner through
this letter requested the Ministry to ensure that Respondent signs the
GSA expeditiously as possible.
k) It is stated that it was only on 21.03.2023 that the Respondents vide
letter bearing No. GSPCL/COMM/2023 stated that they are not in
agreement with the Allocation as communicated by the Petitioner and
also stated that there is no valid GSA and no binding agreement in
existence between the Parties. The Petitioner replied to the aforesaid
letter vide Letter dated 22.03.2023 bearing No.
COM/RJ/GSPC/2023/19 denying all the allegations made by the
Respondent.
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l) Vide email dated 30.03.2023, the Respondent proposed an alternative
interim arrangement which was accepted by the Petitioner on a
without prejudice basis to avoid loss and it is stated that the parties
also agreed to go by the standard terms of the GSA.
m) The Petitioner vide Letter dated 07.07.2023, after going through
settlement talks in terms of Clause 18.1 of the GSA, which failed, sent
a notice invoking Arbitration in terms of Clause 18 of the GSA and
appointed its nominee Arbitrator.
n) The Petitioner had also filed a Section 9 Petition which was
withdrawn vide Order dated 07.07.2023 as the Petitioner had already
invoked Arbitration and denies any dispute in existence.
o) The Respondents vide Letter dated 04.08.2023 replying to the notice
invoking Arbitration stated that Arbitration cannot be invoked as there
was never a valid arbitration agreement or any agreement between the
Parties containing an Arbitration Clause.
p) The present petition has been filed for appointment of an arbitrator on
behalf of the Respondent so that the proceedings under the Arbitration
& Conciliation Act can be convened for adjudication of the dispute.
The prayers in the present petition read as under:-
“In the aforesaid premise, the Petitioner most humbly
prays that this Hon’ble Court be pleased to pass an
order:
(a) Appointing the Respondent’s nominee arbitrator in
exercise of its power under Section 11(6) of the
Arbitration and Conciliation Act, 1996 and pursuant toSignature Not Verified
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Clause 18 of the GSA read with the RFP dated
28.12.2022;
(b) Award all costs and legal fees for the present
proceedings to the Petitioner and
(c) Pass any other or further orders that this Hon’ble
Court deems fit in the facts and circumstances of the
present case.”
3. Pleadings have been completed.
4. Learned Counsel Senior appearing for the Petitioner contends that the
facts of the case indicate that after the auction was conducted, the
Respondent was informed that it was successful in the auction and that only
a Gas Sales Agreement (GSA) to be entered into. The Petitioner had emailed
a fresh copy of the filled up Gas Sales Agreement (GSA) to the Respondent
and was only awaiting the formal signing of GSA in terms of Clauses 1.3.3
and 1.3.4 of the RFP. It is stated that reminders were also sent by the
Petitioner to the Respondent. It is stated that there was no letter from the
Respondent stating that they do not want to proceed ahead with the Gas
Sales Agreement (GSA) and on the contrary, an email had been sent by the
Respondent stating that it was taking steps under the Gas Sales Agreement
(GSA) to sell the gas to the downstream customers.
5. Learned Senior Counsel for the Petitioner draws attention of this
Court to an email dated 27.02.2023 communicated by the Respondent to the
Petitioner stating the reason for its formal non-signing of GSA wherein the
Respondent had categorically stated as under:
“On account of unforeseeable and adverse material
changes in the natural gas market due to continuousSignature Not Verified
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fall in gas prices, it is not feasible to market this gas to
downstream customers at current bid prices”
However, we are continuously making efforts to sell
the gas to downstream customers and would revert to
you appropriately.”
6. Learned Senior Counsel for the Petitioner further contents that the
Respondent could begin negotiation with downstream customers only on the
basis of the fact that it was successful in the auction. He, therefore, states
that the fact that mere formal GSA had not been signed cannot mean that
there was no formal arbitration clause which could not be invoked. He states
that there was all intention on the part of both sides to go ahead with the
GSA. For this purpose, the learned Senior Counsel for the Petitioner places
reliance upon a judgment passed by the Apex Court in UNISSI (India) (P)
Ltd. v. Post Graduate Institute of Medical Education and Research, (2009) 1
SCC 107. He states that in the said judgment, the Apex Court has held that
even if no formal agreement is executed, the Courts can still infer the
existence of an arbitration clause.
7. Learned Senior Counsel for the Petitioner also places reliance upon a
judgment passed by the Apex Court in Trimex International FZE Ltd. v.
Vedanta Aluminium Ltd., (2010) 3 SCC 1. He states that in the said
judgment, the Apex Court has held that in the absence of signed agreement
between the parties, it would be possible to infer from various documents
duly approved and signed by the parties in the form of exchange of e-mails,
letter, telex, telegrams and other means of telecommunication, the existence
of arbitration clause.
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8. Learned Senior Counsel for the Petitioner contends that the present
dispute pertains to the failure on the part of the Respondent to off take the
quantity of gas agreed in the auction. He states that the Respondent cannot
be permitted to take the advantage of its not signing the formal GSA
containing the arbitration clause. He states that as part of the bidding
process, the Respondent had signed the GSA and returned a scanned copy to
the Petitioner. He states that the version signed by the Petitioner after the
conclusion of the auction process contained no variation to the version
signed by the Respondent, except for filling in price, quantity and the
effective date which was fixed on the basis of bid submitted by the
Respondent. He states that the Respondent had agreed in principle to be
bound by the terms of the GSA which is evident from various clauses of
RFP. He states that this is further demonstrated by the fact that the
Respondent had agreed to be bound by the terms and conditions of GSA
when it signed Forms C-1 and C-6 which are part of the RFP. He states that
once having agreed to be bound by the GSA which contained arbitration
clause, the mere formal non-signing of GSA by the Respondent cannot deny
the Petitioner for the option to invoke arbitration as the parties had agreed to
submit themselves to settle their disputes by arbitration.
9. Learned Senior Counsel for the Petitioner states that the Petitioner has
spent over three months and has incurred significant amount in the conduct
of e-auction and, therefore, the entire exercise cannot be denied by the
Respondent as they have refused to take the gas at the price to which they
were bound.
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10. Per contra, learned Senior Counsel for the Respondent contends that
mere acceptance of the Respondent’s bid did not result in conclusion of the
GSA and this would not be considered as an Arbitration Agreement in terms
of Section 7 of the Arbitration and Conciliation Act, 1996. It is further states
that the uploading of the signed/attested GSA by the Respondent and by the
other bidders was only for technical evaluation and qualification only and
was a mandatory requirement under the RFP to participate in the Auction
Process. It is also stated that the GSA was never executed and submission of
a signed GSA at the time of technical evaluation is not sufficient to form a
contract between the parties because as per the terms of the RFP, the final
execution of the GSA was not a mere formality but a mandatory requirement
which had sanctions and repercussions ff not done such as forfeiture of the
security deposit.
11. It is further stated that the RFP itself does not contain any arbitration
clause and the Arbitration Clause as referred to is only present in the draft
GSA which was never finalised and is not binding on the Parties. It is stated
that no arbitration agreement ever existed between the Parties. It is also
contended that the Bid Process was based on the various Notification
released by the Ministry of Petroleum and Natural Gas which explicitly
required that any sale of gas would be by way of a signed and executed
GSA.
12. It is also contended by the learned Senior Counsel appearing for the
Respondent that even if the draft GSA is taken to be as binding upon the
Parties, even then the Arbitration Agreement does not exist as the definition
of “Effective Date” in draft GSA states that the date of “Execution” would
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be the “Effective Date” of the GSA. Learned Senior Counsel for the
Respondent also contends that the RFP itself required execution of a
definitive GSA as the closing step of the RFP process. He states that the
Respondent has not executed the said Agreement and, therefore, the last step
in the entire process has not been completed and it cannot be said that the
parties have entered into an Arbitration Agreement.
13. He further states that the case of the Petitioner that the GSA, which
contains Arbitration Clause, came into existence immediately after the
Respondent’s bid has been accepted, cannot be accepted. He states that
signing of the draft GSA was not a mere formality. He further states that the
RFP is governed by the notifications dated 15.10.2020 & 03.12.2020 issued
by the Ministry of Petroleum and Natural Gas, which mandates execution of
a draft GSA for submission of the same to the Regulator before inviting
RFPs. He further states that the Respondent has not signed each page of the
agreement and since there is absence of signatures of the Respondent on
each page of the Agreement, it cannot be said that the formal GSA had not
been entered into between the parties. Several contentions have been raised
by the learned Counsel for the Respondent stating that without the fixed
price and allocated quantity of the gas being specifically mentioned in the
GSA, the GSA is not complete. He states that any interim arrangement
entered into between the parties which shows in-principle agreement would
not give rise to a definitive GSA unless the same is signed by both the
parties. Learned Counsel for the Respondent also contends that the RFP
does not bind the Respondent to supply gas and even after the execution of
the RFP, it was always open for the Petitioner to back-out from the
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Agreement and order for a re-bid. He further states that the argument of the
Petitioner that the moment the auction was concluded, the Respondent
became bound by the terms of the auction, is not tenable in law.
14. It is the contention of the learned Senior Counsel for the Respondent
that the effective date, price and volume of gas were left blank in the draft
agreement. He further states that since the GSA has not been entered into, at
best the Bank Guarantee can be forfeited but the parties cannot be sent to
Arbitration. Learned Counsel for the Respondent also contends that even the
effective date is not filled in the draft GSA which means that the GSA does
not exist. He draws the attention of this Court to clause 21.5 of the GSA to
state that unless and until both the parties do not sign the Agreement, the
Agreement does not exist. Clause 21.5 of the GSA reads as under:
“21.5 Entire Agreement
This Agreement, together with the Annexures hereto,
(i) embodies the final, complete and exclusive
understanding between the Parties with respect to its
subject matter; (ii) replaces and supersedes all
previous oral or written agreements, understandings or
arrangements between the Parties; (iii) may be signed
in counterparts, each of which will be an original and
all of which will constitute one and the same
document; and (iv) may only be amended in a writing
signed by an authorized officer of both Buyer and the
Sellers hereto.”
15. Heard the learned Counsels for the parties and perused the material on
record.
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16. Before proceeding ahead, it is necessary to extract the relevant clauses
of the RFP and the same reads as under:
“1.3.1
Phase 1-Pre-qualification
1. Publishing of bidding documents: To apprise
potential Bidders of the auction process and key terms
of the agreement, the bid documents such as the RFP,
GSA etc., is made available on landing page of the e-
portal. The Bidders will be able to download these
documents without registering on the platform
Additionally, the NIO (Notice Inviting Offer) capturing
the URL of the e-portal would be published by the
Sellers in the Newspapers.
2. Submission of Bidders’ queries: Bidders would be
able to send their queries to the designated email
address ([email protected]) before
registering on the portal. While sending the pre-bid
queries, Bidder shall be required to mention the
reference number of this RFP. However, post
registration on the portal, the bidders would also be
able to upload their queries on the portal. The Sellers
would issue clarification to all the queries received and
the same would be hosted on the e-portal.
3. Pre-bid meeting: The Sellers may organize a pre-bid
meeting on a date specified in Clause 1.3.4 of thisRFP. The pre-bid meeting would an interactive session
and provide Bidder’s opportunity to seek further
clarifications and understand the process better. The
Pre-bid meeting would be open to all the interested
Bidders. The Bidders willing to participate in the pre-
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bid meeting would be required to nominate a maximum
of two representatives from their organization to take
part in the meeting. Bidders would be required to use
their official email address to share the name, email
address and phone number of the nominated person(s)
to the designated email address
([email protected]).
4. Registration and DSC mapping: The portal will be
available for registration from the date of Publishing
ofthe NIO as specified in Clause 1.3.4 of this RFP. Every
Bidder would be required to fill a small registration
form and will have to enter his/her name, designation,
contact number, organization name, gas consumption
facility name & address, and other required details.
Then they will attach a valid Class III Digital
Signature Certificate (DSC) issued in the name of
authorized person of the bidding organization. The
DSC should be Issued on the email address of the
authorized person and same should be used for
registering on the platform
5. Document for Technical Evaluation: Each Bidder
shall be required to upload duly signed/attested
scanned copies of the following documents on the e-
Tendering Portal before date specified in Clause 1.3.4
of this RFP includingA. Registration/ incorporation certificate for
companies, LLPs and Co-operative societies or
Partnership Deed duly registered with relevant
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B. Standalone Financial statements of past 3 years
(Latest audited financial statement should not be older
than 12 months from the bid closing/un-priced bid
opening date) In case the bidding entity is a newly
formed company, I can submit financial statements for
the periods for which audit has been concluded or of
its parent company subject to an undertaking from the
parent company to the effect that if supports the bid
and authorizes the bidder to use its financialsC. PAN and VAT/CST, GST certificate D. Security
Deposit (Please refer Section C Form C4) along with
the delivery report of the SFMS ConfirmationE. Certified copy of Power of Attorney/ Board
Resolution in the name of the authorized representative
of the Bidder highlighting power for signing the GSAF. Signed GSA & RFP and any addendums/
corrigendum theretoG. Sell-declaration from aggregators
H. Signed declaration Section C-Form C1, C2 and/or
C3, C5 (if required) and CS Register of directors,
shareholders of the company …….
….
1.3.3
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After the end of the e-auction process, Sale Gas will be
allocated to the identified Bidders (“Buyers”) based on
the allocation criteria and method outlined in Clause
4. The Buyers will be accordingly notified over their
registered email IDs. Subsequent to this, each Buyer
shall:
Execute GSA with the Sellers as per Section D for the
gas volumes, duration and price allocated to the Buyer.
(If any changes are made to the draft GSA, a modified
draft of GSA will be published on e-portal before the
start of Phase 2. The latest GSA published will be
deemed agreed in its entirety by all Bidders and will be
used for final signoffs)Make necessary transportation arrangements for
offtake of Sales Gas from the Delivery Point to Buyer’s
facilities before the Start Date as indicated in the
executed GSA
1.3.4 The schedule for e-auction process has been
given below:
4. Evaluation Process and Volume Allocation
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4.1 Technical Evaluation Process
The e-auction agency shall electronically access the
documents submitted by Bidders as specified in Clause
1.3.1 of this RFP. Each Bidder will be evaluated based
on the following criteria
i. All the responses and declarations required for
Technical Evaluation should be complete and
should conform to the terms and conditions of
the gas supply indicated in the RFP and GSA,
duly supported with documents wherever
required. In case of incomplete and non-
conforming documents, Sellers reserve the right
to disqualify such Bidder.
ii. Bidder as either consumer of gas or as reseller,
need to submit documentary proof-being
certified copy of the Firm’s Memorandum of
Association (for a registered company),
Partnership deed(for partnership firm) or
declaration from Proprietor in case of a
proprietary firm (as applicable depending on
type of firm) detailing the nature of business the
firm is engaged in
iii. Bidder to submit Standalone Financial
statements of past 3 years (Latest audited
financial statement should not be older than 12
months from the bid closing/un-priced bid
opening date). In case the bidding entity is a
newly formed company, it can submit financial
statements for the periods for which audit has
been concluded or of its parent company subject
to an undertaking from the parent company to
the effect that it supports the bid and authorizes
the bidder to use its financials
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Further, it should be noted that
i. To facilitate its evaluation, the e-auction agency
may, at its sole discretion, seek clarifications
from any Bidder regarding the documents
provided Such clarification(s) shall be provided
within the time specified by the e-auction
agency. Any request for clarification(s) and all
clarification(s) in response thereto shall be in
writing In case a Bidder does not provide the
clanfications sought by the e-auction agency
within the timeframes specified by the e-auction
agency, its bid shall be deemed invalid and shall
not be evaluated
ii. The e-auction agency reserves the right to reject
any bid based on the evaluation of the
documents. Subsequently, e-auction agency shall
have the right not to entertain any request for
alteration, modification or substitution of any
one or all of the documents with respect to the
technical evaluation, provided that e-auction
agency may, at its sole discretion, allow a
Bidder to rectify any infirmities or omissions if
doing so does not constitute a material
modification of the documents provided initially
iii. The e-auction agency reserves the right not to
proceed with the technical evaluation at any
time without notice or liability to any Bidder and
to reject any or all technical bids received
without assigning any reasons.
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iv. The Sellers reserve the right to seek additional
documents in future which it may deem fit to
ascertain Buyer’s capability to offtake gas as per
the terms of GSA
4.2 Determination of Provisional Quantity and Final
Quantity Allocation
Step 1: The Gas Price Bid shall be arranged in
descending order.
Step 2: The Provisional Quantity shall be determined
in as follows:
(i) The Provisional Quantity shall be determined for
the highest Bidder (for Price Bid) for the full volume
which it has quoted, followed by the next highest
Bidder (for Price bid) for its quoted volume or
remaining available volume, whichever is lower, and
so on until the total available volume is fully allocated
(ii) If there is a tie in the Gas Price Bid and if the
aggregate volume of gas quoted by these Bidders is
less than the available gas volume, the Bidders will get
volume allocated as per their quoted volume. In case of
a tie in both the Gas Price bid, if the aggregate volume
of gas quoted in the tied bids is more than the available
gas volume, the available gas volume shall be pro-
rated amongst the tied Bidders.
Step 3: Steps 1 and 2 shall continue throughout the e-
Bidding Process and the Provisional Quantity shall
continue to be determined by the E-Portal dynamically,
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until the conditions for the closing of the e-Bidding
Process as specified in Clause 3.3.(v) are met.
Step 4: Upon the closing of the e-Bidding Process, the
Provisional Quantity determined based on the last
bids received shall be considered as the Final
Quantity for each Bidder.
At the end of the e-bidding process, the e-auction
agency will notify all the successful Bidders
regarding their respective allocated volume rounded
up to nearest higher integer. The minimum Quantity
allocated to each successful Bidder shall be 0.01
MMSCMD. The agency will share the list of
successful Bidder and evaluation report with the
Sellers basis which Sellers can proceed with the
execution of GSA with successful buyers.
5. General Guidelines
i. Bidders are expected to thoroughly understand,
evaluate and examine all instructions, forms,
requirements, and terms and conditions of the
GSA provided in this RFP Each Bidder is
required to submit its bid based on the terms and
conditions of this RFP and the GSA, without any
deviations or conditionality
ii. Failure to furnish any/all information/documents
required under this RFP shall lead to
disqualification of the Bidder.
iii. Bidders are requested to submit all documents in
the formats provided under Section C of this RFP.
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Bid documents that are not property filled in, or
are damaged, or have any page(s) missing or with
incorrect, inaccurate detalis or generally not
complying with the bid conditions shall be
disqualified
iv. Each Bidder shall participate in the e-Bidding
Process at its own expense and none of the
expenses incurred during the participation in e-
auction can be claimed from the Sellers,
regardless of the outcome of the e auction
v. A bid, once submitted shall be binding on the
Bidder who has submitted such bid. Each Bidder
undertakes to offtake the Gas volume allocated
(as per Clause 4.2 of this RFP) at the end of the
E-auction, at the Gas Price computed based on
the bid submission as per Clause 3. 1 of this
RFP
vi. In addition to the Gas Price each Bidder
acknowledges and agrees that it shall be liable to
pay: (a) all taxes, duties and levies on the
purchase of gas as per the terms of GSA and (b)
all transportation tariffs and charges and any
taxes, duties, and levies thereon as applicable to
the relevant transporters or any Government
entity.
vii. Each Bidder acknowledges and agrees that that
this RFP by the Sellers does not constitute any
commitment to supply or sell gas The obligation
to supply on sell gas to a Buyer shall become
Signature Not Verified
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13:41:22
effective only upon the execution of the n of the
GSA by all the parties!
viii. A company which owns multiple gas consuming
facilities (except aggregators or marketers or
CGD companies) can participate in the E-Auction
by a single registration for all facilities per
Clause 1.3.1. of this RFP
ix. Any attempt by a Bidder to influence the E-
Auction process or other Bidders, bid evaluation
or the allocation process shall immediately result
in disqualification of its bid
x. The outcome of E-auction and the allocations
made thereafter, based on the criteria and process
indicated in Clause 4 of this RFP, shall be final
and binding on all Bidders
xi. In case of any conflict between the provisions of
this RFP and the GSA, the provisions of the GSA
shall prevail.
xii. All the notices, future amendments if any, to this
RFP and the GSA during the E-Auction process
shall be published on the e-portal
https://eps.buyjunction.in/gas bidding/
xiii. All the documents to be submitted online or in
hard copy through the course of the E-Auction
Process shall be duly signed by its Authorized
Representative on all pages
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xiv. After the registration, a unique login ID will be
created for each bidding entity. It shall be the
responsibility of every Bidder to ensure that it
bids only through one login ID
xv. Rights of Sellers:
a) The Sellers reserve the right to withhold or
withdraw the E-Auction process at any stage or cancel
or modify the process or change/modify/amend any or
all provisions of this RFP, at any time, without
assigning any reason whatsoever by notifying on e-
portal.
b) The Sellers have sole discretion and reserve the
right, without any obligation or liability, to accept or
reject any or all of the bids at any stage of the E-
auction process
c) The Sellers, at their own discretion, can seek
additional documents from Bidders that they may deem
required to ascertain the capability of Bidders to
offtake gas as per the terms of GSA”
(emphasis supplied)
17. It is the case of the Petitioner that the referral Court under Section 11
of the Arbitration & Conciliation Act has to only examine the prima facie
existence of an Arbitration Agreement and the determination of the
substantive rights should be left to the Arbitral Tribunal. Learned Counsel
for the Petitioner has relied on several judgments of the Apex Court andSignature Not Verified
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more particularly on the judgment of the Apex Court in Interplay Between
Arbitration Agreements under Arbitration, 1996 & Stamp Act, 1899, In re,
(2024) 6 SCC 1 & SBI General Insurance Co. Ltd. v. Krish Spinning, 2024
SCC OnLine SC 1754.
18. It is the contention of the learned Counsel for the Petitioner that the
notice inviting offer and the RFP issued by the Petitioner was followed by
an offer in the form of a bid by the Respondent. The offer was accepted by
the Petitioner vide an e-mail dated 18.01.2023, which leads to an
enforceable contract. The enforceable contract was only to be reduced into
writing under the GSA and this was only a formality and, therefore, the
parties had agreed to refer the disputes to the Arbitrator. Reliance has also
been placed by the learned Counsel for the Petitioner on form C1 & C6
wherein the Respondent has stated that it has confirmed, read and
understood all the terms of the GSA.
19. A perusal of Clause 4.2 of the RFP shows the Determination of
Provisional Quantity and Final Quantity Allocation and Step 4 categorically
states that upon the closing of the e-Bidding Process, the Provisional
Quantity determined based on the last bids received shall be considered as
the Final Quantity for each Bidder. A perusal of the RFP indicates that the
price and the quantity were finally determined and were not available for
any variation. The RFP also indicates that the Respondent herein bid 46
times and out of total 15 bidders, 5 bidders, including the Respondent herein
emerged as successful bidders and the Respondent herein was allocated the
single highest quantity of gas. On the conclusion of the bidding, an e-mail
was sent on the very same day, i.e. 18.01.2023, by the Petitioner to theSignature Not Verified
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13:41:22
Respondent informing them that they were successful in the bidding. An
email containing the bid volume and the allocated volume was sent on
18.03.2023 and the same is extracted below:
“From: Cairngas Bidding
Sent: 18 January 2023 23:13
To: [email protected]; [email protected];
[email protected]
Cc: Ankit Kumar <[email protected]>; Rimi
Ghosh <[email protected]>; Rinku Ghosh
<[email protected]>; Souvik Ghosh
<[email protected]>
Subject: Winner Intimation Mail- Vedanta Request For
Proposal (No. RFP/RJ-ON-90/1/2023/1) e-Auction for
sale of Natural Gas from RJ BLOCK (RJ-ON-90/1)
dtd. 18th Jan 2023
Company Name : M/s Gujarat State Petroleum
Corporation Limited
e-Bidding Date : 18th January 2023
Dear Sir/Madam,
This is to inform you that, e-Bidding : Vedanta Request
For Proposal (No. RFP/RJ-ON-90/1/2023/1) e-Auction
for sale of Natural Gas from RJ BLOCK (RJ-ON-90/1)
dtd. 18th Jan 2023 has closed.
Your Provisional Allocation is mentioned below.
Signature Not Verified
Digitally Signed
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Signing Date:29.07.2025
13:41:22
Thanks and Regards,
Cairn Gas Bidding”
20. The date by which the GSA was to be signed is also given in
Clause 1.3.4 of the RFP. The said clause categorically states that the GSA is
to be signed within ten days from the date of the e-auction. The auction was
conducted on 18.01.2023. The Petitioner informed the Respondent that it has
emerged as a successful bidder. The quantity allocated to the Respondent
and the price at which the gas was allocated to it was already fixed as per the
price formula given in the RFP was also intimated to the Respondent. The
Petitioner emailed a fresh copy of the filled-up and signed GSA to the
Respondent on 19.01.2023, i.e. the very next date of the e-auction. The
Petitioner herein sent reminders on 20.01.2023, 27.01.2023, 01.02.2023,
10.02.2023, 17.02.2023 & 22.02.2023. However, the Respondent herein did
not sign the GSA. On 27.02.2023, the Respondent herein sent an email to
the Petitioner herein giving reasons as to why the GSA has not yet been
signed. The said email is being reproduced in its entirety and the same reads
as under:
“Subject: RE: Winner Intimation Mail- Vedanta
Request For Proposal (No. RFP/RJ-ON-90/1/2023/1)
e-Auction for sale of Natural Gas from RJ BLOCK
(RJ-ON-90/1) dtd. 18th Jan 2023
Date: Monday, 27 February 2023 at 6:09:52 PM India
Standard Time
From: Chintan Shah
To: Suneet Kr. ChorariaSignature Not Verified
Digitally Signed
By:SHAZAAD ZAKIR ARB.P. 853/2023 Page 25 of 43
Signing Date:29.07.2025
13:41:22
CC: Avi Bhansali, devendra, [email protected],
Sourcing Commercial
Dear Sir,
This is reference with to trail emails on the subject.
On account of unforeseeable and adverse material
changes in the natural gas market due to continuous
fall in gas prices, it is not feasible to market this gas to
downstream customers at current bid prices.
As you are aware Gas prices in international market
have dropped ~18% from mid-January 2023 on
account of, inter alia, demand destruction due to high
energy prices as well as warmer winter in parts
Europe. Further, reports suggest gas prices to remain
under pressure owing to events including, demand
from China taking longer than expected to come back
and high inventories in Japan and South Korea on
account of warmer weather.
Contrary, Brent prices have fairly remained stable
since the auction concluded on 18 Jan 2023, resulting
into RJ’s field Gas Cost remaining almost unchanged
in spite of reduction in market prices. You would agree
that there is significant disparity in prices linked to Oil
benchmarks and Spot gas prices in current volatile
market.
Further, gas prices in the domestic markets have also
corrected significantly and it is understood that price
discovered in recently conducted domestic gas tender
was more competitive. Customer’s expectations are
now aligned to such change in market conditions and
there is a requirement of more competitive pricing /
prices.
However, we are continuously making efforts to sell
the gas to downstream customer and would revert to
you appropriately.
Signature Not Verified
Digitally Signed
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Signing Date:29.07.2025
13:41:22
Thanks and regards,
Chintan Shah”
21. The short question which arises for consideration before this Court is
as to whether the fact that the Respondent has been declared as a successful
bidder by the acceptance of the RFP, crystallising of the price and quantity
of gas allocated, is sufficient for this Court to infer as to whether there exists
an arbitration agreement between the parties or whether only the signatures
on the GSA would lead to existence of an Arbitration Agreement.
22. Section 2(1)(b) of the Arbitration and Conciliation Act, 1996 states
that “arbitration agreement” means an agreement referred to in Section 7 of
the Act. Section 7 of the Arbitration and Conciliation Act, 1996 reads as
under:
“Section 7. Arbitration agreement.
(1) In this Part, “arbitration agreement” means an
agreement by the parties to submit to arbitration all or
certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship,
whether contractual or not.
(2) An arbitration agreement may be in the form of an
arbitration clause in a contract or in the form of a
separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is
contained in
(a) a document signed by the parties;
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(b) an exchange of letters, telex, telegrams or
other means of telecommunication 1[including
communication through electronic means] which
provide a record of the agreement; or
(c) an exchange of statements of claim and
defence in which the existence of the agreement is
alleged by one party and not denied by the other.
(5) The reference in a contract to a document
containing an arbitration clause constitutes an
arbitration agreement if the contract is in writing and
the reference is such as to make that arbitration clause
part of the contract.”
23. A perusal of Section 7(2) of the Arbitration Act shows that an
arbitration agreement may be in the form of an arbitration clause in a
contract or in the form of a separate agreement which has to be in writing.
Section 7 further states that an Arbitration Agreement is in writing if it is
contained in a document signed by the parties or if it can be inferred from
the exchange of letters, telex, telegrams or other means of
telecommunication, including communication through electronic means
which provide a record of the agreement or from exchange of statements of
claim and defence in which the existence of the agreement is alleged by one
party and not denied by the other.
24. The Apex Court in Cox & Kings Ltd. v. SAP India (P) Ltd., (2024) 4
SCC 1, has observed as under:
“75. Section 7(3) requires an arbitration agreement to
be in writing. Section 7(4) lays down three
circumstances to elaborate when an arbitration
agreement can be said to be in writing. According to
the first circumstance laid down under Section 7(4)(a),
an arbitration agreement is in writing if it is signed bySignature Not Verified
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the parties. This circumstance refers to a situation
where the parties have formally executed and expressly
assumed the status of parties by attesting their
signatures to the arbitration agreement or the
underlying contract containing the arbitration
agreement. In such situations, the Courts or tribunals
only need to refer to the signature page or the recitals
to figure out the parties to the arbitration agreement.
76. Section 7(4)(b) provides the second circumstance,
according to which an arbitration agreement is in
writing if it is contained in an exchange of letters,
telex, telegrams or other means of telecommunication
including communication through electronic means
which provide a record of the agreement. According to
this provision, the existence of an arbitration
agreement can be inferred from various documents
duly approved by the parties. [Shakti Bhog Foods Ltd.
v. Kola Shipping Ltd., (2009) 2 SCC 134 : (2009) 1
SCC (Civ) 411; Trimex International FZE Ltd. v.
Vedanta Aluminium Ltd., (2010) 3 SCC 1 : (2010) 1
SCC (Civ) 570] Section 7(4)(b) dispenses with the
conventional sense of an agreement as a document
with signatories. Rather, it emphasises on the
manifestation of the consent of persons or entities
through their actions of exchanging documents.
However, the important aspect of the said provision
lies in the fact that the parties should be able to
record their agreement through a documentary
record of evidence. In Great Offshore Ltd. v. Iranian
Offshore Engg. & Construction Co. [Great Offshore
Ltd. v. Iranian Offshore Engg. & Construction Co.,
(2008) 14 SCC 240] , this Court observed that Section
7(4)(b) requires the Court to ask whether a record of
agreement is found in the exchange of letters, telex,
telegrams, or other means of telecommunication. Thus,
the act of agreeing by the persons or entities has to beSignature Not Verified
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inferred or derived by the Courts or tribunals from the
relevant documents and communication, neither of
which can be equated with a conventional contract.
77. The third circumstance is provided under Section
7(4)(c), according to which an arbitration agreement is
in writing if it is contained in an exchange of
statements of claim and defence in which the existence
of the agreement is alleged by one party and not denied
by the other. A two-Judge Bench of this Court clarified
in S.N. Prasad v. Monnet Finance Ltd. [S.N. Prasad v.
Monnet Finance Ltd., (2011) 1 SCC 320 : (2011) 1
SCC (Civ) 141] that there will be an “exchange of
statements of claim and defence” for the purposes of
Section 7(4)(c) if there is an assertion of the existence
of an arbitration agreement in any suit, petition or
application filed before any court or tribunal, and if
there is no denial of it in the defence, counter, or
written statement. Thus, in the third circumstance the
Court proceeds on the assumption that the conduct of
the person or entity in not denying the existence of an
arbitration agreement leads to the conclusive proof of
its existence.
78. All the three circumstances contained in Section
7(4) are geared towards determining the mutual
intention of the parties to be bound by the arbitration
agreement.
79. Section 7 of the Arbitration Act contains two
aspects : a substantive aspect and a formal aspect.
The substantive aspect is contained in Section 7(1)
which allows parties to submit disputes arising
between them in respect of a defined legal
relationship to arbitration. The legal relationships
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between and among parties could either be
contractual or non-contractual. For legal relations to
be contractual in nature, they ought to meet the
requirements of the Indian contract law as contained
in the Contract Act. It has been shown in the
preceding paragraphs that a contract can either be
express or implied, which is inferred on the basis of
action or conduct of the parties. Thus, it is not
necessary for the persons or entities to be signatories
to a contract to enter into a legal relationship — the
only important aspect to be determined is whether
they intended or consented to enter into the legal
relationship by the dint of their action or conduct.
80. The second aspect is contained in Section 7(3)
which stipulates the requirement of a written
arbitration agreement. A written arbitration agreement
need not be signed by the parties if there is a record of
agreement. [Govind Rubber Ltd. v. Louis Dreyfus
Commodities Asia (P) Ltd., (2015) 13 SCC 477 :
(2016) 1 SCC (Civ) 733] The mandatory requirement
of a written arbitration agreement is merely to ensure
that there is a clearly established record of the consent
of the parties to refer their disputes to arbitration to
the exclusion of the domestic courts.”
(emphasis supplied)
25. The Apex Court in Trimex International FZE Ltd. v. Vedanta
Aluminium Ltd., (2010) 3 SCC 1, on the facts of that case, observed as
under:
“53. In the present case, where the commercial offer
carries no clause making the conclusion of the
contract incumbent upon the purchase order, it is
clear that the basic and essential terms have beenSignature Not Verified
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accepted by the respondent, without any option but to
treat the same as a concluded contract.
*****
57. Both in the counter-affidavit as well as at the time
of arguments Mr C.A. Sundaram, learned Senior
Counsel for the respondent has pointed out various
differences between the version of the respondent and
the petitioner. However, a close scrutiny of the same
shows that there were only minor differences that
would not affect the intention of the parties. It is
essential that the intention of the parties be
considered in order to conclude whether the parties
were ad idem as far as adopting arbitration as a
method of dispute resolution was concerned. In those
circumstances, the stand of the respondent that in the
absence of signed contract, the arbitration clause
cannot be relied upon is liable to be rejected.
58.Smita Conductors Ltd. v. Euro Alloys Ltd. [(2001)
7 SCC 728] was a case where a contract containing
an arbitration clause was between the parties but no
agreement was signed between the parties. The
Bombay High Court held that the arbitration clause
in the agreement was binding. Finally, this Court
upholding the judgment of the Bombay High Court
held that the arbitration clause in the agreement that
was exchanged between the parties was binding.
59. In Shakti Bhog Foods Ltd. v. Kola Shipping Ltd.
[(2009) 2 SCC 134] , this Court held that from the
provisions made under Section 7 of the Arbitration and
Conciliation Act, 1996 thatSignature Not Verified
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“the existence of an arbitration agreement can be
inferred from a document signed by the parties, or an
exchange of letters, telex, telegrams or other means of
telecommunication, which provide a record of the
agreement” (SCC p. 142, para 14).
60. It is clear that in the absence of signed agreement
between the parties, it would be possible to infer from
various documents duly approved and signed by the
parties in the form of exchange of e-mails, letter,
telex, telegrams and other means of
telecommunication.” (emphasis supplied)
26. Applying the said law to the facts of this case, the signed and duly
filled copy of the GSA was supplied to the Respondent mentioning the
effective date, the price of the gas and the volume of the gas. The price,
volume and the effective date was virtually agreed upon by the parties while
accepting the RFP, as is clear from the e-mail dated 18.01.2023.
Immediately after conclusion of the contract. The signed and filled copy of
the GSA sent by the Petitioner to the Respondent was only to be formally
signed by the Respondent. The GSA had already been read, understood and
confirmed by the Respondent. The fact that the Respondent herein submitted
Forms C1 & C6 would mean that it agreed to the various terms and
conditions of the GSA, which also contained Arbitration clause. Form C1 &
C6 reads as under:-
Signature Not Verified
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”
Signature Not Verified
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Signature Not Verified
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27. Therefore, in the opinion of this Court, the necessary ingredients of
Section 7 of the Arbitration Act are fulfilled.
28. Section 11(6A) of the Arbitration Act provides that the Court
referring a dispute to the Arbitration is only to confine its examination to the
existence of an arbitration agreement. Section 11(6A) of the Arbitration Act
reads as under:-
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“11 (6A) 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, notwithstanding any judgment, decree or
order of any Court, confine to the examination of the
existence of an arbitration agreement.”
29. This Court, therefore, has to only see as to whether the parties had in-
principle agreed to refer the matter to Arbitration or not. The Apex Court in
Interplay Between Arbitration Agreements under Arbitration, 1996 & Stamp
Act, 1899, In re, (2024) 6 SCC 1, has observed as under:-
“163. We are of the opinion that the above premise of
the Court in Vidya Drolia [Vidya Drolia v. Durga
Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC (Civ)
549] is erroneous because the omission of Section
11(6-A) has not been notified and, therefore, the said
provision continues to remain in full force. Since
Section 11(6-A) continues to remain in force, pending
the notification of the Central Government, it is
incumbent upon this Court to give true effect to the
legislative intent.
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 ArbitrationSignature Not Verified
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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 Engg. [SBP & Co. v. Patel Engg. Ltd.,
(2005) 8 SCC 618] 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(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
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Tribunal under Section 16. We accordingly clarify
the position of law laid down in Vidya Drolia [Vidya
Drolia v. Durga Trading Corpn., (2021) 2 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
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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]
168. In Shin-Etsu [Shin-Etsu Chemical Co. Ltd. v. Aksh
Optifibre Ltd., (2005) 7 SCC 234] , this Court was
called upon to determine the nature of adjudication
contemplated by unamended Section 45 of the
Arbitration Act when the objection with regards to the
arbitration agreement being “null and void,
inoperative or incapable of being performed” is raised
before a judicial authority. Writing for the majority,
B.N. Srikrishna, J. held that Section 45 does not
require the judicial authority to give a final
determination. The Court observed that : (SCC p. 267,
para 74)
“74. There are distinct advantages in veering to the
view that Section 45 does not require a final
determinative finding by the Court. First, under the
Rules of Arbitration of the International Chamber of
Commerce (as in force with effect from 1-1-1998), as
in the present case, invariably the Arbitral Tribunal is
vested with the power to rule upon its own jurisdiction.
Even if the Court takes the view that the arbitral
agreement is not vitiated or that it is not invalid,
inoperative or unenforceable, based upon purely a
prima facie view, nothing prevents the arbitrator from
trying the issue fully and rendering a final decision
thereupon. If the arbitrator finds the agreement valid,
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there is no problem as the arbitration will proceed and
the award will be made. However, if the arbitrator
finds the agreement invalid, inoperative or void, this
means that the party who wanted to proceed for
arbitration was given an opportunity of proceeding to
arbitration, and the arbitrator after fully trying the
issue has found that there is no scope for arbitration.
Since the arbitrator’s finding would not be an
enforceable award, there is no need to take recourse to
the judicial intercession available under Section
48(1)(a) of the Act.”
169. When the Referral Court renders a prima facie
opinion, neither the Arbitral Tribunal, nor the Court
enforcing the arbitral award will be 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. Such a legal approach will
help the Referral Court in weeding out prima facie
non-existent arbitration agreements. It will also protect
the jurisdictional competence of the Arbitral Tribunals
to decide on issues pertaining to the existence and
validity of an arbitration agreement.”
30. The Apex Court in SBI General Insurance Co. Ltd. v. Krish Spinning,
2024 SCC OnLine SC 1754, has observed as under:-
“122. Once an arbitration agreement exists between
parties, then the option of approaching the civil court
becomes unavailable to them. In such a scenario, if the
parties seek to raise a dispute, they necessarily have to
do so before the arbitral tribunal. The arbitral
tribunal, in turn, can only be constituted as per the
procedure agreed upon between the parties. However,
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the duty of appointing the arbitral tribunal falls upon
the referral court under Section 11 of the Act, 1996. If
the referral court, at this stage, goes beyond the scope
of enquiry as provided under the section and examines
the issue of “accord and satisfaction”, then it would
amount to usurpation of the power which the parties
had intended to be exercisable by the arbitral tribunal
alone and not by the national courts. Such a scenario
would impeach arbitral autonomy and would not fit
well with the scheme of the Act, 1996.
*****
125. We are also of the view that ex-facie frivolity and
dishonesty in litigation is an aspect which the arbitral
tribunal is equally, if not more, capable to decide upon
the appreciation of the evidence adduced by the
parties. We say so because the arbitral tribunal has the
benefit of going through all the relevant evidence and
pleadings in much more detail than the referral court.
If the referral court is able to see the frivolity in the
litigation on the basis of bare minimum pleadings, then
it would be incorrect to doubt that the arbitral tribunal
would not be able to arrive at the same inference, most
likely in the first few hearings itself, with the benefit of
extensive pleadings and evidentiary material.”
31. This Court is of the opinion that on the conclusion of the RFP,
wherein the Respondent herein had made its bid 46 times after having read
and understood the RFP and the GSA, and after giving a declaration in form
C1 & C6 that they would start the offtake of the natural gas volume
allocated at the end of the e-auction as per the terms and conditions set out
in the RFP and the GSA, and after one party having signed the GSA and
only a mere formality being left for the other party to sign the GSA, this
Court is of the opinion that there is a prima facie existence of an Arbitration
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Agreement between the parties which is sufficient for this Court to refer the
parties to Arbitration in terms of the GSA.
32. The Petitioner has already appointed Justice L. N. Rao, former Judge
of the Supreme Court of India, as its nominee Arbitrator. This Court
appoints Justice Ravinder P. Bhatt, former Judge of the Supreme Court of
India, as the nominee Arbitrator of the Respondent. The nominee Arbitrators
are requested to proceed further and appoint the Presiding Arbitrator.
33. The learned Arbitrators shall be entitled to fees as per the Fourth
Schedule of the Arbitration & Conciliation Act, 1996.
34. The learned Arbitrators are also requested to file the requisite
disclosure under Section 12(2) of the Arbitration & Conciliation Act, 1996
within a week of entering on reference.
35. All rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned
Arbitrators on their merits, in accordance with law.
36. Needless to say, nothing in this order shall be construed as an
expression of this Court on the merits of the contentions of the parties.
37. With these directions and observations, the Petition is disposed of,
along with the pending applications, if any.
SUBRAMONIUM PRASAD, J
JULY 28, 2025
Rahul
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