Authority: High Court of Jammu & Kashmir and Ladakh at Srinagar

Order Date: 21 August 2026

Case Overview

  • Parties: M/S ABRAQ INFRASTRUCTURES LLP (Petitioner/Appellant) vs. Union Territory of Jammu & Kashmir and others (Respondents).
  • Contract: Agreement dated 16‑08‑2018, executed pursuant to allotment dated 17‑11‑2017 for construction of National Institute of Fashion Technology (NIFT), Package‑III, Ompora, Budgam.
  • Financials: Allotted cost Rs 43,99,92,907/‑ against advertised cost Rs 59.92 crore.
  • Termination: Respondent Department terminated the contract by letter dated 05‑02‑2024 citing repeated interference, variation in quantities, and disputes.
  • Subsequent actions: Respondents issued NITs on 10‑02‑2024 and 21‑06‑2024 for balance work; these NITs were later withdrawn.
  • Prior litigation: Petitioner's challenges before Additional District Judge (Designated Commercial Court), Srinagar and before this Court in AA No. 08/2024, WP(C) Nos. 1434/2024, 2604/2024 and 873/2025. Orders dated 18‑04‑2026 withdrew WP(C) Nos. 1434/2024 and 2604/2024, granting petitioner liberty to invoke arbitration clause.
  • Arbitration petition: Notice dated 18‑12‑2025 under Section 21 of the Arbitration and Conciliation Act, 1996 invoking Clause 34 of the agreement; no reply from respondents.
  • Respondents' preliminary objections: (i) alleged default by petitioner leading to termination; (ii) claim of res judicata/estoppel due to repeated filings and withdrawals; (iii) assertion that petitioner, having been paid, lacks locus to seek arbitration; (iv) claim of a pending similar arbitration application before the Commercial Court.
  • Arbitration clause: Clause 34 mandates disputes be referred to a sole arbitrator after written notice; Clause 34(II) designates the Managing Director of SIDCO (or his nominee) as sole arbitrator.
  • Legal analysis: Court noted that at the Section 11(6) stage, only prima facie existence of a valid arbitration agreement is examined; merits, default, prior proceedings, limitation, etc., are for the arbitral tribunal under kompetenz‑kompetenz (Section 16).
  • Ineligibility of SIDCO Managing Director: Under Section 12(5) read with the Seventh Schedule (as inserted by the Arbitration and Conciliation (Amendment) Act, 2015), a person with an interest in the dispute cannot act as arbitrator nor nominate another; thus Clause 34(II) is rendered unworkable.

Final Outcome

  • Petition allowed.
  • Mr. Mehrajud‑Din Sofi, Retired District and Sessions Judge (Mobile No. 9419970965), appointed as Sole Arbitrator to adjudicate the disputes arising under the contract.
  • The appointed arbitrator shall issue notice to parties upon entering reference and conduct proceedings per the Arbitration and Conciliation Act, 1996, charging fees as per the Fourth Schedule.
  • Registry to communicate a copy of the order to the Sole Arbitrator.
  • The petition and all connected applications are disposed of.

Topics: Arbitration, Construction Contract, Judicial Appointment