M/s Eminent Colonizers Pvt. Ltd. v. Rajasthan Housing Board & Ors

 Under the pre-2015 SBP regime, once a Section 11 court appoints an arbitrator, the existence and validity of the arbitration agreement attain finality inter partes and cannot be reopened in Section 34 proceedings.

 

Background

Construction contracts executed in 2007–2009 with the Rajasthan Housing Board contained Clause 23, providing for dispute resolution by an “empowered Standing Committee”. On disputes regarding escalation and penalties, Section 11 applications were allowed in 2014 and retired High Court Judges were appointed as sole arbitrators. Awards were passed in 2015–2016. In Section 34 proceedings, the Commercial Court and the High Court set aside the awards holding that Clause 23 was not an arbitration clause.

 

Issues Framed

Whether, where arbitrators were appointed under s. 11(6) of the Arbitration and Conciliation Act, 1996 prior to the 2015 Amendment, courts in Section 34 proceedings could re-examine and invalidate the arbitration clause.

 

Court’s Reasoning

1. Applicable legal regime:
The arbitral proceedings commenced prior to 23.10.2015; hence the law declared in SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 governed. Under this regime, the Section 11 court exercised judicial power and was required to decide existence and validity of the arbitration agreement.
2. Finality of Section 11 determination:
Once an arbitrator is appointed by a competent Section 11 court and the order attains finality (not appealed), the determination—express or implied—on the existence/validity of the arbitration agreement binds the parties at all subsequent stages, including before the arbitral tribunal and in Section 34 proceedings.
3. Error of courts below:
The Commercial Court and the High Court erred in treating the Section 11 order as lacking binding effect and in re-opening the question whether Clause 23 constituted an arbitration agreement. The distinction between precedentand res judicata was overlooked; while Section 11 orders may not be precedents in rem, they operate as res judicata inter partes.
4. Post-2015 contrast:
The Court clarified that after the 2015 Amendment (s. 11(6A)), courts examine only the existence of an arbitration agreement prima facie, leaving validity to Section 16; however, this regime did not apply to the present cases.
 

Decision 

The appeals were allowed. The High Court judgments setting aside the awards were quashed. The matters were remitted to the Commercial Court to consider other Section 34 objections excluding the issue of existence/validity of the arbitration clause, with directions for expeditious disposal. 

 

Ratio 

In arbitral proceedings governed by the pre-2015 law, an order under s. 11(6) A&C Act appointing an arbitrator conclusively determines—expressly or by necessary implication—the existence and validity of the arbitration agreement between the parties, and such determination cannot be reopened in Section 34 proceedings.

 

Case Details

• Citation: 2026 INSC 116
• Decided on: 04 February 2026
• Case Title: M/s Eminent Colonizers Pvt. Ltd. v. Rajasthan Housing Board & Ors. (with M/s Eminent Colonizers Pvt. Ltd. v. Rajasthan Housing Board & Ors. – connected appeal)
• Court: Supreme Court of India
• Bench: J.B. Pardiwala J. and K.V. Viswanathan J.

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