ARB.P. 247/2026 & Other Connected Matter Page 1 of 16

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 15

th

May, 2026

Pronounced on: 26

th

May, 2026

+ ARB.P. 247/2026 & I.A. No. 11845/2026

M/S JIANGXI CONSTRUCTION ENGINEERING GROUP CO

LTD & ANR. .....Petitioners

Through: Mr. Sanjoy Ghose, Senior Advocate

with Dr. Farrukh Khan, Ms. Vidhi

Jain, Ms. Zainab Khan and Mr. Mohit

Garg, Advocates.

Mob: 8586080540

Email: vidhi@diwanadvocates.com

versus

M/S VARAHA INFRA LTD. .....Respondent

Through: Mr. Rajeev Sharma, Senior Advocate

with Mr. Abhishek Birthray, Mr.

Paras Choudhary, Mr. Nishant

Kandpal, Ms. Arunima Singh and Mr.

Kartikeya Tripathi, Advocates.

Mob: 8510018600

Email:

kartikeyatripathi@sarvagyalegal.com

+ O.M.P.(I) (COMM.) 23/2026 & I.A. Nos. 1536/2026 & 11844/2026

M/S JIANGXI CONSTRUCTION ENGINEERING GROUP CO

LTD. & ANR. .....Petitioners

Through: Mr. Sanjoy Ghose, Senior Advocate

with Dr. Farrukh Khan, Ms. Vidhi

Jain, Ms. Zainab Khan and Mr. Mohit

Garg, Advocates.

Mob: 8586080540

ARB.P. 247/2026 & Other Connected Matter Page 2 of 16

Email: vidhi@diwanadvocates.com

versus

M/S VARAHA INFRA LTD. .....Respondent

Through: Mr. Rajeev Sharma, Senior Advocate

with Mr. Abhishek Birthray, Mr.

Paras Choudhary, Mr. Nishant

Kandpal, Ms. Arunima Singh and Mr.

Kartikeya Tripathi, Advocates.

Mob: 8510018600

Email:

kartikeyatripathi@sarvagyalegal.com

CORAM:

HON'BLE MS. JUSTICE MINI PUSHKARNA

JUDGMENT

MINI PUSHKARNA, J.

1. ARB.P. 247/2026 has been filed under Section 11 of the Arbitration

and Conciliation Act, 1996 (“Arbitration Act”) seeking appointment and/or

grant of fresh mandate for the earlier Arbitrator, to adjudicate the disputes

between the parties, arising out of and in connection with the Settlement

Agreement dated 21

st

December, 2021 (“Settlement Agreement”), as

incorporated into the Consent Arbitral Award dated 23

rd

February, 2022

(“Consent Arbitral Award”) passed by the Arbitral Tribunal, including,

disputes arising from the alleged breach, non-compliance, revival of original

claims and other consequential and additional claims.

2. O.M.P.(I) (COMM.) 23/2026 has been filed under Section 9 of the

Arbitration Act, seeking interim measures for preservation of the subject

matter under the Consent Arbitral Award, read with the Settlement

ARB.P. 247/2026 & Other Connected Matter Page 3 of 16

Agreement, on the premise of the respondent’s persistent, wilful and

fundamental breach of the Settlement Agreement entered into between the

parties.

3. As per the facts, culled out from the pleadings and documents on

record, the petitioners entered into a Memorandum of Understanding

(“MoU”) with the respondent on 31

st

May, 2017, for the purposes of

forming a Joint Venture (“JV”) and for participating in tenders for various

construction works issued by the National Highways Authority of India

(“NHAI”) and State Governments.

4. By way of the aforesaid MoU, it was agreed between the parties that

the respondent shall arrange only the bid security/earnest money deposit,

and upon award of any project to the JV, the petitioners shall arrange the

following:

A. Performance Bank Guarantee.

B. Additional Performance Bank Guarantee (if required).

C. Retention Bank Guarantee.

D. Mobilization or Advance Bank Guarantee.

5. It was further agreed upon by the parties that if the petitioners failed

to submit the Bank Guarantee in terms of the aforesaid, then it shall not be

entitled to receive any fee or compensation.

6. The JV between the petitioners and the respondent was awarded the

following three contracts:

“

ARB.P. 247/2026 & Other Connected Matter Page 4 of 16

”

7. With respect to the aforesaid Engineering, Procurement and

Construction Contracts (“EPC Contracts”) mentioned at serial nos. (a) and

(b), upon issuance of a Letter of Acceptance dated 01

st

December, 2017 to

the JV by the Government of Gujarat, the petitioners and the respondent

executed two separate Joint Venture Agreements dated 31

st

December, 2017,

in respect of Package-3 and Package-5 of the Gujarat Projects. As per the

said JV Agreements, the petitioner no. 1 undertook to furnish the Bank

Guarantees, as envisaged in the EPC Contracts between the Joint Venture

and Government of Gujarat.

8. With regard to the EPC Contract at serial no. (c), a Letter of

Acceptance for the Vijayawada Project was issued on 01

st

October, 2019.

Pursuant thereto, a JV Agreement was executed between the petitioners and

respondent on 06

th

December, 2019. Under this JV Agreement also,

petitioner no. 1 undertook to furnish Bank Guarantees, as per the EPC

Contract executed between the NHAI and the JV.

9. Since the aforesaid three projects could not be completed within their

respective scheduled completion dates, the JV applied for extension of time,

which was duly granted by the concerned authorities.

10. During execution of the work, various disputes arose between the

ARB.P. 247/2026 & Other Connected Matter Page 5 of 16

parties to the present petitions, and the said inter se disputes were referred to

arbitration presided by a Sole Arbitrator, mutually appointed by the parties.

During the pendency of the arbitration, the parties resolved their disputes

vide the Settlement Agreement dated 21

st

December, 2021.

11. Under the Settlement Agreement, since the petitioners apprehended

that the respondent may not be able to complete the respective projects, and

the same would result in the encashment of Bank Guarantees submitted by

petitioner no. 1, the respondent executed a Mortgage Deed dated 06

th

May,

2022, in respect of plant and machinery worth Rs. 50 Crores, based on their

invoice value as well as a Corporate Guarantee to secure all the Bank

Guarantees submitted by the petitioners.

12. Based on the said Settlement Agreement, the Consent Arbitral Award

was passed by the learned Sole Arbitrator on 23

rd

February, 2022.

13. As per Clause 13 of the Settlement Agreement, the respondent had

undertaken to complete the Gujarat projects by end of June, 2022 or such

other time as may be allowed by the Government of Gujarat. However, due

to various factors, the work was delayed beyond June, 2022, and extensions

with regard thereto were granted by the Government of Gujarat from time to

time.

14. As regards the Vijayawada Project and Package-3 of Gujarat Project,

completion certificates have already been issued, and defect liability period

is in operation.

15. As regards Package-5 of the Gujarat Project, owing to non-

availability on the work-front and continuing hindrances, the respondent

requested for descoping of the Kuvadava Flyover and Toll Plaza works from

the scope of the EPC Contract with respect to Package-5. The said request

ARB.P. 247/2026 & Other Connected Matter Page 6 of 16

for descoping is currently the subject matter of a Dispute Resolution Notice

dated 12

th

September, 2023 in terms of Clause 26 of the EPC Contract

between the JV and the Government of Gujarat.

16. The respondent has already completed the work under Package-5 of

Gujarat Project, except to the extent of the work descoped. Further, the

respondent has applied for provisional completion certificate vide letter

dated 28

th

March, 2026.

17. On behalf of the petitioners, it is contended that owing to consistent

failure on the part of the respondent to complete the Gujarat project, the

Gujarat Authority vide Notice dated 31

st

July, 2025 has invoked Clause

11.13.2 of the EPC Contract, relating to completing the works on risk and

cost of the contractor, i.e., the JV between the petitioners and the

respondent. Thus, as per the case put forth by the petitioners, the very

invocation of the said Clause threatens the invocation of the aforesaid Bank

Guarantees, which have been submitted before the concerned Gujarat

Authority by the petitioner no. 1, on behalf of the JV.

18. Thus, the petitioners have filed the petition being O.M.P(I)(COMM.)

23/2026, thereby, seeking directions to the respondent to furnish its own

Bank Guarantees to the concerned Gujarat Authorities, and secure release of

the existing Bank Guarantees furnished by the petitioners, which are under

imminent threat of invocation.

19. Per contra, it is the case of the respondent that till the conciliation and

other contractual dispute resolution mechanisms have run their course, there

can be no crystalized or enforceable claim that could justify the interim

reliefs now sought by the petitioners. Further, no notice of invocation or

demand for payment has been issued by the concerned Gujarat Authority to

ARB.P. 247/2026 & Other Connected Matter Page 7 of 16

the petitioners or the respondent in respect of the Bank Guarantees, nor has

any quantified risk and cost claim been raised. Thus, as per the respondent,

the petition has been founded entirely on speculative apprehensions about

what the concerned Gujarat Authority may do at some uncertain future

point.

20. It is contended by the respondent that if the concerned Gujarat

Authority were to initiate action in future to encash any of the Bank

Guarantees, the petitioners would have an adequate and efficacious remedy

to challenge such action before the appropriate forum, including, by

invoking contractual dispute resolution mechanisms.

21. It is apparent that disputes have arisen between the parties with

respect to the execution of the work by the JV. On one hand, the petitioners

have alleged that the respondent has failed to honour the terms of the

Settlement Agreement and Consent Arbitral Award between the parties, in

not completing the work within the stipulated time period.

22. The respondent, on the other hand, has alleged that the petitioners are

in breach of their obligations under the Settlement Agreement and related JV

arrangements, in as much as they have failed to furnish Retention Bank

Guarantees required for release of retention money held by the concerned

Authority, despite repeated requests and follow-up by the respondent. It is

the case of the respondent that as on date, retention amounts of

approximately Rs. 2.62 Crores under Package-3 and Rs. 10.23 Crores under

Package-5, aggregating to Rs. 12.85 Crores, remain locked with the

concerned Authority, solely because the petitioners have not provided the

requisite Retention Bank Guarantees, thereby, aggravating the respondent’s

cash flow burden.

ARB.P. 247/2026 & Other Connected Matter Page 8 of 16

23. This Court notes the submission of the petitioner that the Gujarat

Authority vide letter dated 31

st

July, 2025 and other letters, has already

invoked the ‘Risk and Cost’ mechanism under Clause 11.13.1 of the EPC

Contract between the JV and the Government of Gujarat. Thus, the

petitioners have a genuine grievance that the Bank Guarantees deposited by

the petitioners are at an imminent risk of being invoked.

24. This Court also takes note of the submissions made on behalf of the

respondent that the petitioners are fully and adequately secured by the

Mortgage Deed dated 06

th

May, 2022 and the Corporate Guarantees.

However, it is the case of the petitioners that the live Bank Guarantees as

deposited by the petitioners amount to Rs. 106.71 Crores, whereas, the

Mortgage Deed secures only to the extent of Rs. 50 Crores. Further, the said

mortgage is with respect to plant and machinery, which are inherently

depreciating assets.

25. It is to be noted that the JV Agreements between the petitioners and

respondent provides for a dispute resolution mechanism through the process

of arbitration. The said Arbitration Clause, i.e., Clause 17 of the JV

Agreements, is reproduced as under:

“xxx xxx xxx

xxx xxx xxx”

ARB.P. 247/2026 & Other Connected Matter Page 9 of 16

26. The petitioners vide Legal Notice dated 19

th

December, 2025 have

already sent notice to the respondent bringing forth the various material

breaches in terms of the Settlement Agreement dated 21

st

December, 2021

read with the Consent Arbitral Award dated 23

rd

February, 2022, and for

proceeding in accordance with law, including, execution of the Consent

Arbitral Award under the Arbitration Act.

27. This Court rejects the submission of the respondent that no notice

under Section 21 of the Arbitration Act has been issued by the petitioner. It

is to be noted that the petitioner had issued a formal notice of arbitration on

06

th

August, 2020, pursuant to which the earlier arbitration proceedings were

conducted. Hence, a fresh notice under Section 21 of the Arbitration Act is

not needed. In this regard reference may be made to the judgment in the case

of Sriram Cables Pvt. Ltd. Versus Union of India, 2024 SCC OnLine Del

5794, wherein, it has been categorically held that the law does not envisage

repeated notices under Section 21 of the Arbitration Act. Thus, it was held

as under:

“xxx xxx xxx

14. There can be no cavil with this proposition as the 1996 Act does

not envisage repeated notices under Section 21. In the present case the

notice dated 18 May 2017 was clearly a notice under Section 21 of the

1996 Act inviting the respondent to refer the dispute to arbitration. That

being so, no fresh notice under Section 21 is required to be issued by the

petitioner.

xxx xxx xxx”

(Emphasis Supplied)

28. In any event, as noted above, a further notice was issued by the

petitioners on 19

th

December, 2025, wherein, the essential elements of notice

under Section 21 are fully envisaged and covered. Furthermore, it is to be

noted that the Supreme Court in the case of Bhagheeratha Engineering Ltd.

ARB.P. 247/2026 & Other Connected Matter Page 10 of 16

Versus State of Kerala, 2026 SCC OnLine SC 5, has held that a notice

under Section 21 of Arbitration Act is not a mandatory pre-condition in all

arbitration contexts. Thus, it has been held as under:

“xxx xxx xxx

16. Secondly, the object of Section 21 of A&C Act, is only for the

purpose of commencement of arbitral proceedings is also well settled.

Section 21 is concerned only with determining the commencement of the

dispute for the purpose of reckoning limitation. There is no mandatory

prerequisite for issuance of a Section 21 notice prior to the

commencement of Arbitration. Issuance of a Section 21 notice may

come to the aid of parties and the arbitrator in determining the limitation

for the claim. Failure to issue a Section 21 notice would not be fatal to a

party in Arbitration if the claim is otherwise valid and the disputes

arbitrable. …

xxx xxx xxx”

(Emphasis Supplied)

29. Further, this Court takes note of the submission made on behalf of the

respondent that by way of an E-mail dated 06

th

May, 2026, the respondent

has also invoked Clause 12.1 of the Mortgage Deed dated 06

th

May, 2022,

which contains the Arbitration Clause for referring the disputes between the

parties for arbitration. The related portions from the reply of the respondent

in O.M.P.(I) (COMM) 23/2026, are extracted as below:

“xxx xxx xxx

ARB.P. 247/2026 & Other Connected Matter Page 11 of 16

xxx xxx xxx

xxx xxx xxx”

30. Clause 12.1 of the Mortgage Deed dated 06

th

May, 2022 between the

petitioner and respondent containing the Arbitration Clause, is reproduced as

under:

ARB.P. 247/2026 & Other Connected Matter Page 12 of 16

“

”

31. Thus, the respondent has already invoked the Arbitration Clause

under the Mortgage Deed dated 06

th

May, 2022 vide E-mail dated 06

th

May,

2026.

32. This Court notes that the parties has initially entered into a Mortgage

Deed dated 21

st

December, 2021, and the same forms an integral part of the

Settlement Agreement, and was placed before the earlier Arbitral Tribunal,

and expressly recorded as Annexure-B to the Settlement Agreement in the

Consent Arbitral Award.

33. Reference may be made to the relevant terms of the Mortgage Deed

dated 21

st

December, 2021, executed between petitioner no. 1 and

respondent, which read as under:

ARB.P. 247/2026 & Other Connected Matter Page 13 of 16

“xxx xxx xxx

xxx xxx xxx”

34. Reference is also made to the relevant terms of the Mortgage Deed

dated 06

th

May, 2022, which read as under:

“xxx xxx xxx

ARB.P. 247/2026 & Other Connected Matter Page 14 of 16

xxx xxx xxx”

35. Reference to the aforesaid Mortgage Deeds, makes it evident that the

execution of the Mortgage Deed dated 06

th

May, 2022 was in terms of the

earlier Mortgage Deed dated 21

st

December, 2021, and the former also

forms an essential part of the larger settlement between the parties.

36. Thus, the disputes as raised by the petitioners with regard to non-

compliance of the terms of the Settlement Agreement and Consent Arbitral

Award and the disputes with regard to the Mortgage Deed dated 06

th

May,

2022, are intertwined.

37. Accordingly, all the disputes raised by the petitioners in terms of the

JV Agreements between the parties, for violation of the terms of the

Settlement Agreement and Consent Arbitral Award and all the disputes in

terms of the Mortgage Deed between the parties, in terms of the invocation

of the Arbitration Clause by the respondent, are to be referred for

adjudication before an Arbitral Tribunal.

38. While the petitioners seek reference of the disputes to the same

Arbitrator as earlier, however, learned Senior Counsel appearing for the

respondent has expressed reservations for reference of the disputes to the

same arbitrator. Nonetheless, learned Senior Counsel appearing for the

respondent submits that all disputes between the parties can be referred to

ARB.P. 247/2026 & Other Connected Matter Page 15 of 16

some other Arbitrator.

39. Though this Court finds no reason to not refer the disputes that have

arisen between the parties, to the same Arbitrator who had earlier

adjudicated the disputes between them, however, considering the

submissions made by learned Senior Counsel appearing for the respondent,

this Court proceeds to appoint another Arbitrator.

40. Accordingly, considering the detailed discussion hereinabove, the

following directions are issued:

I. Justice (Retired) Jayant Nath, Former Judge of this Court,

(M:8527959494), is appointed as Sole Arbitrator to adjudicate

disputes between the parties.

II. All the disputes between the parties under the JV Agreements, the

Mortgage Deed, the Settlement Agreement, and the Consent Arbitral

Award, are referred to the learned Arbitrator.

III. The petition under Section 9 of the Arbitration Act is referred before

the learned Arbitrator to be taken up as an application under Section

17 of the Arbitration Act.

IV. The remuneration of the Arbitrator shall be in terms of Schedule IV of

the Arbitration Act.

V. The Arbitrator is requested to furnish a declaration in terms of Section

12 of the Arbitration Act prior to entering into the reference. In the

event there is any impediment to the Arbitrator’s appointment on that

count, the parties are given liberty to file an appropriate application

before this Court.

VI. It shall be open to the respondent to raise counter-claims, if any, in the

arbitration proceedings.

ARB.P. 247/2026 & Other Connected Matter Page 16 of 16

VII. It is made clear that all the rights and contentions of the parties,

including, the arbitrability of any of the claims and/or counter-claims,

any other preliminary objection, as well as claims on merits of the

dispute of either of the parties, are left open for adjudication by the

learned Arbitrator.

VIII. The parties shall approach the Arbitrator within two (2) weeks from

today.

41. It is made clear that this Court has not expressed any opinion on the

merits of the case.

42. Accordingly, the present petitions, along with the pending

applications, are disposed of in the aforesaid terms.

43. The Registry is directed to send a copy of this order to the learned

Arbitrator, for information and compliance.

MINI PUSHKARNA

(JUDGE)

MAY 26, 2026/ak