Punjab & Haryana High Court Refuses Appointment of Arbitrator; Holds Clause Referring Disputes to Government Committee Is Not an Arbitration Agreement

Case Name: All India Society for Electronics and Computer Technology (AISECT) v. Haryana State Rural Livelihoods Mission and Others
Citation: ARB-260-2025
Bench: Hon’ble Mr. Justice Jasgurpreet Singh Puri

Held: The Punjab and Haryana High Court dismissed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator. The Court held that a clause merely titled “Arbitration and Applicable Laws”, which provides for resolution of disputes by an Empowered Committee of the Government, does not constitute an arbitration agreement in the absence of a clear and mandatory intention to refer disputes to arbitration and be bound by the decision of an arbitral tribunal.

Summary: The petitioner sought appointment of a sole arbitrator by relying on Clause 8 of a Memorandum of Understanding executed with the respondent authorities. Although the clause carried the heading “Arbitration and Applicable Laws”, its substantive part provided that disputes which could not be resolved amicably would be referred to the Empowered Committee for Aajeevika Skills in the Ministry of Rural Development, whose decision would be final and binding.

The respondents opposed the petition by contending that the clause did not evince any intention to arbitrate and merely contemplated administrative dispute resolution through a government committee. Reliance was placed on earlier decisions of the Supreme Court and a coordinate Bench of the High Court dealing with similarly worded clauses involving the same respondent authority.

The High Court undertook a detailed analysis of the clause and reiterated the settled legal position that the existence of an arbitration agreement depends on the substance of the clause and not its heading. Relying on authoritative precedents including K.K. Modi v. K.N. Modi, Jagdish Chander v. Ramesh Chander, Mahanadi Coalfields Ltd. v. IVRCL AMR JV, and Alchemist Hospitals Ltd. v. ICT Health Technology Services India Pvt. Ltd., the Court held that mere use of the word “arbitration” is insufficient unless the clause reflects a clear obligation to submit disputes to a private arbitral tribunal and an intention to be bound by its decision.

Applying these principles, the Court found that Clause 8 only envisaged reference to a departmental committee and excluded the essential attributes of an arbitration agreement under Section 7 of the Act. Consequently, the jurisdiction under Section 11 could not be invoked.

Decision: The arbitration petition was dismissed. The High Court held that Clause 8 of the agreement did not qualify as an arbitration agreement and, therefore, no arbitrator could be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.