Arbitration clause interpretation in linked contracts: construction disputes went to one sole arbitrator, not the share sale forum.

At the Section 11 stage, the Court held that only a limited prima facie review is required to confirm a written arbitration agreement and an arbitrable dispute, while screening out deadwood. Construing the share purchase agreements and construction management services agreements harmoniously, it found that the completion notice, construction obligation and fee disputes arose under the construction agreements, not the share sale transaction, so the India-seated arbitration clause applied and the SIAC objection failed. Because the two construction contracts were linked and separate tribunals risked duplication and inconsistent awards, the disputes were referred to one common sole arbitrator.

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Issues: (i) Whether the disputes concerning completion notices, construction obligations and fee entitlement arose under the Construction Management Services Agreements so as to be referable to arbitration in India, or were confined to the Share Purchase Agreements and the SIAC mechanism at Singapore; (ii) whether the two connected disputes should be referred to a common sole arbitrator rather than separate arbitral tribunals.

Issue (i): Whether the disputes concerning completion notices, construction obligations and fee entitlement arose under the Construction Management Services Agreements so as to be referable to arbitration in India, or were confined to the Share Purchase Agreements and the SIAC mechanism at Singapore.

Analysis: The Court held that the referral inquiry under Section 11 is limited to the existence of a written arbitration agreement and a prima facie arbitrable dispute, while still permitting a limited scrutiny to weed out deadwood. Reading the two sets of agreements harmoniously, it found that the Share Purchase Agreements governed the share sale and ownership transfer, whereas the Construction Management Services Agreements operationalised the construction obligations and the fee payable on completion. The disputes raised in the petitions concerned rejection of completion notices and non-payment of the contractual fee under the Construction Management Services Agreements, and not any breach of the share sale transaction. The arbitration clause in the Share Purchase Agreements was not treated as overriding or wide enough to absorb these disputes.

Conclusion: The dispute was held to be referable under the arbitration clause in the Construction Management Services Agreements, and the petitions under Section 11 were maintainable; the contention that only the SIAC clause in the Share Purchase Agreements applied was rejected.

Issue (ii): Whether the two connected disputes should be referred to a common sole arbitrator rather than separate arbitral tribunals.

Analysis: The Court noted that the two construction agreements were separate contracts, but the fee computation mechanism linked the projects and raised a risk of duplication and inconsistent awards if different arbitrators were appointed. To avoid wastage of time and resources, and to reduce the possibility of conflicting determinations, the matters were directed to proceed before one sole arbitrator, leaving it open to the arbitrator to decide whether the matters should be heard together or otherwise dealt with in a composite manner.

Conclusion: The disputes were directed to be referred to a common sole arbitrator.

Final Conclusion: The petitions succeeded, the Court appointed a sole arbitrator to adjudicate the disputes arising from the two construction agreements, and the forum objection based on the share purchase agreements was rejected.

Ratio Decidendi: At the Section 11 stage, the Court may undertake a limited prima facie review to determine whether the dispute actually falls within the invoked arbitration agreement, and where two related contracts contain distinct arbitration clauses, the clause governing the substantive dispute must be identified by harmoniously construing the agreements rather than by treating the later dispute as automatically governed by the broader commercial transaction.

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