Two objections recur in almost every Section 11 petition against a public-sector employer: the contractor skipped the contractual escalation ladder, and the claims died with a full-and-final settlement. In M/s Asian Construction Company v. RITES Limited (ARB.P. 270/2026, decided on 5 October 2026), Justice Jyoti Singh of the Delhi High Court rejected both, appointed a sole arbitrator for disputes arising from a Delhi University construction contract, and restated the post-In Re: Interplay position: the referral court examines only the existence of the arbitration agreement; everything else — including accord and satisfaction — belongs to the tribunal.
The contract and the impasse
The petitioner contractor was engaged under a Letter of Acceptance of January 2026 for construction of a new academic block and extension of the science block at Shivaji College, University of Delhi, with RITES Limited as the employer. Disputes over dues followed. The contractor invoked the escalation route in Clause 25 — the Engineer-in-Charge first, the Appellate Authority next — and met silence at both rungs. When it then petitioned under Section 11(6) for appointment of a sole arbitrator, RITES raised the two standard shields: non-exhaustion of the pre-arbitral mechanism, and accord and satisfaction of all legitimate dues.
How each objection fared
Invoked by the contractor; ignored by the employer\'s own designated authorities. Held: an unanswered escalation cannot be wielded as a bar — the petitioner was entitled to proceed to arbitration.
A merits defence going to discharge of the contract, not to the existence of the arbitration agreement. Held: reserved wholly for the arbitrator, who will decide it in accordance with law.
The doctrinal line from Duro Felguera to Krish Spinning
The judgment strings together a decade of referral-stage law. Section 11(6-A) reduced the court\'s inquiry to the existence of the arbitration agreement; Duro Felguera and Mayavati Trading enforced that minimalism; the seven-judge decision in In Re: Interplay grounded it in kompetenz-kompetenz; and SBI General Insurance v. Krish Spinning applied it to the discharge context, holding that a contested full-and-final settlement is itself a dispute the clause survives to govern. Later decisions extended the principle to varied settlement scenarios. The referral court\'s role, in short, is a turnstile, not a tribunal — and this petition passed through it.
Practical architecture of the appointment
The order carries the standard protective fittings of modern Section 11 practice: a named sole arbitrator of technical background (a retired CPWD Special Director General), fee regulation under the Fourth Schedule to prevent unilateral fee disputes, a compulsory Section 12 disclosure of independence before entering the reference, liberty to the respondent to raise every defence including discharge, and an express invitation to counterclaim. Contractors should note the sequencing discipline the petitioner displayed — documented invocation of each escalation rung, then a notice invoking arbitration — because it is that paper trail which dissolved the exhaustion objection.
Section 11 petitions for contracts with a Delhi seat lie to the Delhi High Court, and limitation for invoking arbitration runs from the cause of action, not from the end of settlement talks. Public-sector standard forms frequently contain multi-tier clauses; parties should calendar each tier\'s response window and treat silence as a trigger, not an obstacle.
Frequently Asked Questions
What was the pre-arbitral mechanism objection?
Clause 25 of the General Conditions of Contract required escalation — first to the Engineer-in-Charge, then to the Appellate Authority under Schedule F — before arbitration. The petitioner had in fact written to both; neither responded. The Court held that a party cannot be locked out of arbitration by the other side's silence in its own escalation machinery, and treated the mechanism as exhausted.
Why does a full-and-final settlement not defeat a Section 11 petition?
Because of the kompetenz-kompetenz principle and the narrowed scope of Section 11(6-A). Following SBI General Insurance v. Krish Spinning, a dispute over whether a settlement truly discharged the contract is itself arbitrable — the arbitration clause survives the alleged discharge. Duro Felguera, Mayavati Trading and In Re: Interplay confine the referral court to confirming that an arbitration agreement exists.
Who was appointed, and on what terms?
A retired Special Director General of the CPWD was appointed sole arbitrator, with fees under the Fourth Schedule of the 1996 Act and a mandatory disclosure under Section 12 before entering the reference. The respondent remains free to press accord and satisfaction before the arbitrator and to file a counterclaim.
Does this mean settlement vouchers are worthless for employers?
No. A genuine, voluntary discharge voucher remains a complete defence — but on merits, before the arbitrator. What the employer loses is the ability to use the voucher as a gate at the appointment stage. Employers should therefore preserve evidence of voluntariness: payment trails, correspondence and the absence of protest.