The Kerala High Court on 14 August held that questions concerning pending proceedings before the National Company Law Tribunal (NCLT) and limitation must be considered by the Arbitral Tribunal at the stage of arbitration, observing that a Court's enquiry under Section 11 of the Arbitration and Conciliation Act, 1996 is primarily confined to the existence of an arbitration agreement.

Justice S. Manu allowed an arbitration request arising from a dispute over 117 equity shares in Tharakan Web Innovations Private Limited and directed the Kerala High Court Arbitration Centre to nominate a sole Arbitrator to resolve the dispute between the parties. He held:

“Section 11(6A) mandates that the referral court shall confine to the examination of the existence of an arbitration agreement.”

Avira Tharakan and Cyriac Njavally entered into an agreement dated 17 September 2019 for the transfer of 1,803 equity shares in Tharakan Web Innovations Private Limited. Njavally later acknowledged receipt of the full consideration and stated that he had no right, title or interest in the transferred shares. He subsequently claimed ownership of 117 shares and initiated proceedings before the NCLT.

Tharakan invoked the arbitration clause by notice dated 30 January 2026, but received no response. Tharakan thereafter approached the High Court. Njavally opposed the arbitration request, contending that the disputes fell outside the arbitration clause, were pending before the NCLT and were barred by limitation. He also contended that the agreement had been fully performed and that the disputes were non-arbitrable.

Referring to the Supreme Court's decision in SBI General Insurance Company Limited v. Krish Spinning, the Court noted that the enquiry under Section 11 is limited to a prima facie examination of whether an arbitration agreement exists, while detailed disputes are to be decided by the Arbitral Tribunal. It held:

“The jurisdiction of this Court in an original petition under Article 227 filed against an order of the arbitral tribunal and that under Section 11 of the Arbitration and Conciliation Act are incomparable. As noted above, inquiry by the Court under Section 11 is of a very limited ambit. The only aspect that can be examined is regarding existence of an arbitration agreement.”

On the pending NCLT proceedings, the Court held that the Arbitral Tribunal is the appropriate authority to decide the issue under Section 16 of the Arbitration Act and therefore left the question for consideration by the Tribunal.

On limitation, the Bench held that determining whether the claims were time-barred would require a detailed examination of the facts and therefore left the issue to the Arbitral Tribunal.

Accordingly, the High Court allowed the arbitration request and directed the Kerala High Court Arbitration Centre to nominate a sole Arbitrator to resolve the dispute between the parties.

For Petitioner: Advocates Paul Jacob, Sheru Joseph, Mathew Thomas, Nikitta Tressy George, Dipak Cherian Abraham and Karan Jose Thayamkeril

For Respondent: Advocates Harikumar G (Gopinath Nair), Irene Babu and Jayasankar R

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Case Title :  Avira Tharakan v. Cyriac NjavallyCase Number :  AR No. 60 of 2026CITATION :  2026 LLBiz HC(KER) 166
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