Delhi High Court, in Surender Bajaj v Dinesh Gupta & Ors (2025), addressed an intricate question regarding the maintainability of successive applications seeking arbitral reference when prior judicial determinations had categorically rejected such attempts. The court dismissed the petition under section 11 of the Arbitration and Conciliation Act, 1996.
This dispute originated in November 2018, when Surender Bajaj (the petitioner) entered into a collaboration agreement with multiple respondents for construction on a property. According to this agreement, the petitioner would carry out extensive work on the property and, in return, acquire ownership and possession rights over the second floor of the constructed structure.
Despite completing the construction work as stipulated, the respondent denied the petitioner his contractual rights. The respondent initiated a civil suit before the district court seeking a permanent injunction against the petitioner, claiming ownership through a registered sale deed.
The petitioner invoked the arbitration clause of the collaboration agreement by applying section 8 of the Arbitration and Conciliation Act.
The court’s analysis revealed that the petitioner had failed to comply with the mandatory requirements of section 8(2) of the act, specifically the submission of the original collaboration agreement, or its duly certified copy.
However, the court upheld the trial court’s order and observed that referring only the petitioner to arbitration would result in splitting of parties and fragmenting the subject matter, which contravenes the scheme of the act.
After successive dismissals of applications, the petitioner filed a fresh petition under section 11 of the act before Delhi High Court to circumvent the earlier judicial decisions by seeking direct appointment of an arbitrator, rather than requesting referral from ongoing civil proceedings.
The respondent contended that, under these circumstances, where identical arbitration clauses and parties had been judicially examined and rejected, the present section 11 petition was not maintainable and would amount to res judicata (a matter already decided).
The petitioner submitted that the controversy in the present petition was distinct from the civil suit proceedings. While the civil suit sought a permanent injunction, the instant petition concerned possession rights. He further contended that the section 8 application was rejected on technical grounds only, and such rejection would not bar recourse under section 11 of the act.
Delhi High Court found that the appellate court’s finding in paragraph 11 of the order, dated 18 April 2024, clearly established that referring parties to arbitration would lead to impermissible splitting of parties and subject matter, contravening the scheme of the act.
Consequently, the court dismissed the petition under section 11, and held that the present application seeking appointment of an independent arbitrator was barred by the principle of res judicata, as identical prayers for arbitral reference involving the same parties and arbitration clause had already been judicially rejected by both the trial court and the appellate court.
The decision serves as a significant reminder that judicial determinations regarding arbitrability carry finality and cannot be circumvented through successive applications in different forums.
The judgment underscores the doctrine of res judicata’s application in arbitration contexts. While the court preserved the petitioner’s right to pursue alternative legal remedies, it firmly established that repeated attempts to invoke arbitral jurisdiction through different procedural mechanisms would not be entertained when the underlying issues had been judicially determined.
The dispute digest is compiled by Numen Law Offices, a multidisciplinary law firm based in New Delhi & Mumbai. The authors can be contacted at support@numenlaw.com. Readers should not act on the basis of this information without seeking professional legal advice.
