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Kerala High Court25 March 20262025:KER:15667

M/S. INKEL LIMITED v. M/S. MANSIONS

Single judge · Justice Syam Kumar V.M.

Why it matters

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Advocates handling multi-party construction disputes should note that a co-contracting entity without an arbitration clause in its agreement cannot be dragged into Section 11 proceedings unless the *Ajay Madhusudan Patel* dual test is expressly pleaded and established; the judgment also reaffirms that unilateral arbitrator-appointment clauses remain invalid post-*Central Organisation for Railway Electrification*.

Summary

M/S. INKEL LIMITED filed an Arbitration Request under Section 11 of the Arbitration and Conciliation Act, 1996 before the Kerala High Court seeking appointment of an Arbitrator to resolve disputes arising out of a construction contract (Annexure A4) executed with the 1st respondent, M/S. MANSIONS, for the "Extension of Cancer Specialty Block for General Hospital, Ernakulam" under the Smart City Mission. The 2nd respondent, Cochin Smart Mission Ltd., was the project owner with whom the petitioner held a separate consultancy contract (Annexure A1). Disputes between the petitioner and the 1st respondent were first referred to a Dispute Redressal Committee, whose award (Annexure A5) was not accepted by the 1st respondent, prompting invocation of Clause 25 of the construction agreement. The petitioner approached the Court because Clause 25 envisaged a unilateral appointment of the Arbitrator by the Managing Director — a mechanism rendered invalid by the Supreme Court in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) [2024 SCC Online SC 3219].

The Court allowed the Arbitration Request in part. Since both the petitioner and the 1st respondent were ad idem on the existence of a binding arbitration clause and its due invocation, Sri. S. Jagadees (retired District Judge) was appointed as sole Arbitrator to adjudicate all disputes under Annexures A2 and A4, including questions of arbitrability, jurisdiction, and limitation.

As regards the 2nd respondent, the Court declined to compel its joinder. The consultancy contract (Annexure A1) between the petitioner and the 2nd respondent contained no arbitration clause. More critically, the Court held that the dual test for compelling a non-signatory to arbitration proceedings, as laid down by the Supreme Court in Ajay Madhusudan Patel v. Jyotrindra S Patel [(2025) 2 SCC 147], was not satisfied on the facts. The 1st respondent had produced a tripartite agreement and a separate notice of invocation addressed to the 2nd respondent, but had not itself invoked Section 11 — a prerequisite the Court found unmet. Accordingly, arbitration was confined to the petitioner and the 1st respondent.

Key principle

A non-signatory cannot be compelled to join arbitration proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 unless the dual test for binding non-signatories, as laid down in *Ajay Madhusudan Patel v. Jyotrindra S Patel* [(2025) 2 SCC 147], is satisfied; and a party seeking to rope in a non-signatory must itself invoke Section 11 for that purpose.

Holding

Allowed in part — sole Arbitrator appointed for disputes between petitioner and 1st respondent under the construction contract; 2nd respondent excluded from arbitration as the dual test for compelling a non-signatory laid down in *Ajay Madhusudan Patel v. Jyotrindra S Patel* was not satisfied and no independent Section 11 invocation was made against it.

Statutes invoked

  • Arbitration and Conciliation Act, 1996 · 11
  • Arbitration and Conciliation Act, 1996 · 11(8)
  • Arbitration and Conciliation Act, 1996 · 12(1)

Practice areas

arbitrationcommercial
AI-generated summary, written by Claude Sonnet 4.6 from the court's published judgment. Always verify the original before relying on the summary in court. Generated on 21 May 2026.