Introduction:

In M/s Triom Hospitality v. M/s J.S. Hospitality Services Pvt. Ltd. (FAO (COMM) 174/2024), decided on 24 November 2025, the Delhi High Court, through a Division Bench of Justice Om Prakash Shukla and Justice C. Hari Shankar, delivered a significant ruling reinforcing India’s strong pro-arbitration jurisprudence. The Court set aside an order of the Commercial Court, Dwarka, which had refused to refer the parties to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, in a dispute concerning the use of the well-known restaurant trademark “Pind Balluchi”. The appellant, M/s Triom Hospitality, a partnership firm operating a restaurant under the name “Pind Balluchi” at Dwarka, Delhi, challenged the dismissal of its Section 8 application, while the respondent, M/s J.S. Hospitality Services Pvt. Ltd., the registered proprietor of the “Pind Balluchi” trademark and operator of a nationwide chain of restaurants, alleged trademark infringement, passing off, and forgery of an alleged Memorandum of Understanding containing an arbitration clause. The High Court was called upon to decide whether mere allegations of forgery of the arbitration agreement justified denying reference to arbitration, and in doing so, it revisited foundational principles governing Sections 8 and 16 of the Arbitration and Conciliation Act, including the doctrine of kompetenz-kompetenz and the limited scope of judicial intervention at the referral stage.

Arguments:

On behalf of the appellant Triom Hospitality, senior counsel argued that Section 8(1) of the Arbitration and Conciliation Act casts a mandatory and positive obligation on the judicial authority to refer parties to arbitration once an arbitration agreement is shown to exist, unless the court finds, on a prima facie basis, that no valid arbitration agreement exists at all. It was submitted that the Commercial Court exceeded its jurisdiction by undertaking a detailed and roving inquiry into the authenticity of the Memorandum of Understanding dated 22.06.2022, which allegedly governed the relationship between the parties and contained a valid arbitration clause. The appellant contended that allegations of fraud, forgery, or fabrication, even if serious, do not automatically render a dispute non-arbitrable, particularly when the dispute arises out of a commercial relationship. Reliance was placed on authoritative Supreme Court precedents to argue that issues involving disputed facts, complex evidence, or alleged wrongdoing arising from contractual relationships are matters squarely within the domain of the arbitral tribunal. It was emphasized that the principle of kompetenz-kompetenz, embodied in Section 16 of the Act, mandates that the arbitral tribunal is the proper forum to rule on its own jurisdiction, including questions relating to the existence or validity of the arbitration agreement. The appellant further argued that the Commercial Court’s approach undermined the legislative intent of minimal judicial interference and threatened to derail arbitration at the very threshold by converting Section 8 proceedings into a full-fledged trial.

In contrast, the respondent J.S. Hospitality Services Pvt. Ltd., through its senior counsel, defended the impugned order and argued that a court dealing with a Section 8 application is not a mere rubber stamp and retains the power to examine the prima facie existence and validity of the arbitration agreement. It was contended that where the arbitration agreement itself is alleged to be forged and fabricated, the court is justified in refusing reference to arbitration. The respondent submitted that the Commercial Court had correctly evaluated the surrounding circumstances and evidence to conclude that the Memorandum of Understanding relied upon by Triom was not executed by J.S. at all. According to the respondent, an arbitration clause embedded in a forged document cannot confer jurisdiction on an arbitral tribunal, and even a prima facie absence of validity of the arbitration agreement is sufficient to hold the dispute to be non-arbitrable. It was also argued that the dispute was fundamentally one of trademark infringement and passing off, involving statutory rights and public interest, which justified judicial adjudication rather than private arbitration. The respondent thus urged the High Court to uphold the Commercial Court’s refusal to refer the matter to arbitration.

Court’s Judgment:

The Delhi High Court, after carefully considering the rival submissions and the legal position, allowed the appeal and set aside the impugned order of the Commercial Court, holding that the dispute ought to be referred to arbitration. The Bench identified the core issue as whether the mere allegation of forgery of the arbitration agreement justified a finding of non-arbitrability at the Section 8 stage. Relying on settled precedents, including Mayavati Trading Private Limited v. Pradyut Deb Burman (2019 SCC OnLine SC 1164), the Court reiterated that the scope of judicial scrutiny under Section 8 is extremely limited and confined to examining whether an arbitration agreement prima facie exists. The Court emphasized that refusal to refer a dispute to arbitration is warranted only in rare cases where the reference is ex-facie frivolous or where it is manifestly clear that the dispute is non-arbitrable. It held that allegations of fraud, forgery, or wrongdoing arising out of civil or contractual relationships do not, by themselves, oust the jurisdiction of the arbitral tribunal. The Bench was critical of the Commercial Court’s approach, observing that it had conducted an extensive examination of evidence and circumstances, which was impermissible at the Section 8 stage and contrary to both the letter and spirit of Sections 8 and 16 of the Act. Such an approach, the Court noted, undermines the principle of kompetenz-kompetenz and dilutes the arbitral tribunal’s authority to decide on its own jurisdiction. Importantly, the High Court observed that the existence of a pre-existing commercial relationship between the parties was undisputed, and that the question of whether the signatures on the Memorandum of Understanding were genuine required substantive evaluation of evidence, which could neither be conclusively decided nor brushed aside at the referral stage. The Court held that this inquiry squarely fell within the domain of the arbitral tribunal. Consequently, the High Court concluded that the dispute, arising from a commercial relationship and involving contested questions of fact, was arbitrable, set aside the impugned order, allowed the appeal, and referred the parties to arbitration, thereby reaffirming India’s pro-arbitration stance and the minimal-intervention philosophy of the Arbitration and Conciliation Act.