High Court of Gujarat Dismisses Petition for Appointment of Arbitrator in Coal Mining Services Agreement Dispute — No Arbitration Agreement Exists Between Petitioner and Respondent. Court holds that a consortium agreement does not create privity of contract between the lead member and the employer, and the arbitration clause in the draft CMSA cannot be invoked before execution of the main agreement.

High Court: Gujarat High Court

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2026-05-19 01:04:51

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Case Note & Summary

The petitioner, Adani Enterprises Limited, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes arising from a bidding process for a coal mining project. The respondent, Gujarat State Electricity Corporation Limited, had issued an RFQ and RFP for selection of a Mine Developer and Operator for the Gare Pelma Sector-I Coal Block. The petitioner, as lead member of a consortium with Sainik Mining and Allied Services Limited, was declared the successful bidder. However, the Coal Mining Services Agreement (CMSA) was never executed due to disagreements over terms. The petitioner contended that the consortium agreement and the draft CMSA contained an arbitration clause, and thus an arbitrator should be appointed. The respondent argued that no arbitration agreement existed between the parties. The court analyzed the documents and held that the consortium agreement was only between the consortium members and did not create any privity of contract with the respondent. The draft CMSA was never signed, and its arbitration clause could not be invoked without the main agreement. The court dismissed the petition, finding no arbitration agreement under Section 7 of the Act.

Headnote

A) Arbitration Law - Existence of Arbitration Agreement - Section 7, Arbitration and Conciliation Act, 1996 - Requirement of written agreement signed by parties - The court examined whether a consortium agreement and draft CMSA constituted an arbitration agreement between the petitioner (lead member of consortium) and the respondent (employer). Held that no arbitration agreement existed as the consortium agreement was only between consortium members, and the draft CMSA was never executed. The arbitration clause in the draft CMSA could not be invoked without the main agreement being signed. (Paras 1-27)

B) Arbitration Law - Appointment of Arbitrator - Section 11, Arbitration and Conciliation Act, 1996 - Jurisdiction of court - The court held that in the absence of an arbitration agreement, the petition under Section 11 for appointment of arbitrator was not maintainable. The court dismissed the petition, noting that the dispute arose from pre-contractual negotiations and not from any concluded contract containing an arbitration clause. (Paras 28-30)

Issue of Consideration

Whether an arbitration agreement exists between the petitioner and the respondent under Section 7 of the Arbitration and Conciliation Act, 1996, so as to warrant appointment of an arbitrator under Section 11 of the Act.

Final Decision

The petition is dismissed. No order as to costs.

Law Points

Arbitration agreement must be in writing and signed by parties
Consortium agreement does not create privity of contract between lead member and employer
Arbitration clause in draft agreement not binding until main agreement is executed
Section 7 of Arbitration and Conciliation Act
1996 requires clear intention to arbitrate
Section 11 of Arbitration and Conciliation Act
1996 for appointment of arbitrator

Case Details

2026:GUJHC:7513

R/PETN. UNDER ARBITRATION ACT NO. 22 of 2024

2026-01-30

D.N. Ray

2026:GUJHC:7513

Mr. Shalin Mehta (senior advocate for Mr. Jaimin R. Dave) for Petitioner, Mr. Dipak R. Dave for Respondent

Adani Enterprises Limited

Gujarat State Electricity Corporation Limited

Nature of Litigation

Petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of arbitrator

Remedy Sought

Appointment of an arbitrator to resolve disputes arising from the bidding process for a coal mining project

Filing Reason

Disputes arose between the petitioner and respondent regarding the terms of the Coal Mining Services Agreement, which was never executed

Issues

Whether an arbitration agreement exists between the petitioner and respondent under Section 7 of the Arbitration and Conciliation Act, 1996 Whether the petition under Section 11 of the Act is maintainable in the absence of an arbitration agreement

Submissions/Arguments

Petitioner argued that the consortium agreement and draft CMSA contain an arbitration clause, and thus an arbitrator should be appointed Respondent argued that no arbitration agreement exists between the parties as the CMSA was never executed and the consortium agreement does not bind the respondent

Ratio Decidendi

For an arbitration agreement to exist under Section 7 of the Arbitration and Conciliation Act, 1996, there must be a written agreement signed by the parties or an exchange of communications demonstrating mutual consent to arbitrate. A consortium agreement between consortium members does not create privity of contract with the employer, and an arbitration clause in a draft agreement that is never executed cannot be invoked. Therefore, no arbitration agreement existed between the petitioner and respondent, and the petition under Section 11 is not maintainable.

Judgment Excerpts

Shorn of embellishments, the facts which lead to the present case are as follows:- The court held that no arbitration agreement existed between the parties.

Procedural History

The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 before the High Court of Gujarat. The court heard arguments and reserved judgment on 05/12/2025, pronouncing it on 30/01/2026.