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M/s Andhra Pradesh Power Generation Corporation Limited (APGENCO) vs M/s Tecpro Systems Limited & Ors.

Not available · 2025 INSC 1447Decided 17 Dec 2025
Not available
Justice Pamidighantam Sri Narasimha · Justice Atul S. Chandurkar

Background

APGENCO had awarded an EPC contract for its Rayalseema Thermal Power Plant to a three-company Consortium (Tecpro Systems, VA Tech Wabag, and Gammon India), with Tecpro as the original lead member. After Tecpro ran into financial trouble, VA Tech took over as lead member, and Tecpro was later pushed into insolvency and then liquidation. A dispute arose over project delays and losses, and Tecpro invoked the arbitration clause individually, seeking roughly Rs. 1,951 crore in damages. APGENCO opposed the reference to arbitration, arguing that Tecpro alone (as opposed to the whole Consortium) had no standing to invoke the arbitration agreement, which existed only between APGENCO and the Consortium as a unit. The Telangana High Court nonetheless constituted an Arbitral Tribunal under Section 11(6), and APGENCO appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that at the Section 11 stage, a referral court's role is limited to a prima facie ("existence-based") examination of whether an arbitration agreement exists. It must not conduct a detailed, evidence-based inquiry into contested questions like whether a particular claimant had the individual standing to invoke arbitration, whether the Consortium still existed, or whether claims survived after liquidation. Those deeper questions fall squarely within the jurisdiction of the Arbitral Tribunal itself, under the "kompetenz-kompetenz" principle (the tribunal's power to rule on its own jurisdiction) and Section 16 of the Act. Since an arbitration agreement prima facie existed and was not seriously disputed, the High Court was right to constitute the tribunal, leaving all preliminary objections for the tribunal to decide on merits. The Supreme Court accordingly dismissed APGENCO's appeals and upheld the High Court's order.

Lesson Learnt

When a party goes to court merely to get an arbitrator appointed, the court's job is only to check that an arbitration agreement plausibly exists: deeper disputes over who can actually bring the claim, or whether the claim survives corporate insolvency, are for the arbitrator to decide, not the court at the appointment stage.

Official source (sci.gov.in)View Judgment (PDF)

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