Jharkhand High Court Appoints Arbitrator In Hindustan Dorr Oliver-Uranium Corporation Contract Dispute

The Jharkhand High Court on 8 May held that while exercising jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996, a referral court is required to undertake only a prima facie examination of the existence of an arbitration agreement and cannot enter into disputed questions relating to limitation, maintainability or the effect of insolvency proceedings.

Chief Justice M.S. Sonak appointed former Andhra Pradesh High Court Judge Justice C. Praveen Kumar as the sole arbitrator to adjudicate disputes between Hindustan Dorr-Oliver Ltd. (HDOL) and Uranium Corporation of India Ltd. (UCIL) arising out of a contract dated 20 March 2009, while leaving all objections raised by UCIL open for consideration by the Arbitral Tribunal. The Bench observed:

“The Hon'ble Supreme Court pointed out that Section 11(6-A) uses the expression "examination of the existence of an arbitration agreement". The purport of using the word "examination" connotes that the legislature intends that the Referral Court has to inspect or scrutinise the dealings between the parties for the existence of an arbitration agreement. Moreover, the expression "examination" does not connote or imply a laborious or contested inquiry.”

The dispute arose from a contract executed on 20 March 2009 under which HDOL undertook certain works for UCIL, a public sector uranium mining company. On 4 October 2025, HDOL invoked the arbitration clause contained in the agreement and sought reference of its claims to arbitration.

By communication dated 1 November 2025, UCIL rejected the request, contending that the contract had become stale and that the claims were not maintainable. UCIL further argued that HDOL had undergone insolvency proceedings and had subsequently been sold as a going concern to Pan India Tubes Pvt. Ltd., rendering the arbitration request untenable.

Aggrieved by UCIL's refusal to appoint an arbitrator, HDOL approached the High Court under Section 11(6) of the Act seeking appointment of an arbitrator.

The Court noted that the existence of the arbitration agreement between the parties was undisputed. It held that objections relating to limitation, maintainability and the consequences of the insolvency proceedings required a deeper examination and were therefore matters for the Arbitral Tribunal to consider after its constitution.

Explaining the scope of Section 11(6A), the Court reiterated that the referral court's inquiry is confined to determining whether an arbitration agreement exists. Such examination, it said, is only prima facie in nature and does not contemplate a detailed adjudication of disputed issues.

The Court further observed that a prima facie opinion expressed by the referral court does not bind either the Arbitral Tribunal or the Court at the stage of enforcement of the arbitral award. It held:

“The Hon'ble Supreme Court further clarified that when the Referral Court renders a prima facie opinion, neither the Arbitral Tribunal, nor the Court enforcing the arbitral award will be bound by such a prima facie view. If the Referral Court takes a prima facie view of the existence of an arbitration agreement, it still allows the Arbitral Tribunal to examine the issue in depth. Such a legal approach will help the Referral Court in weeding out prima facie non-existent arbitration agreements.”

Accordingly, the High Court appointed Justice C. Praveen Kumar as the sole arbitrator and clarified that all objections and defences raised by UCIL would remain open for adjudication before the Arbitral Tribunal.