JUDGMENT : Manindra Mohan Shrivastava, C.J. 1. By instant application under Section 11(5) read with Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996), the applicant has prayed for appointment of an Arbitrator for settlement of dispute between the parties on the pleadings, inter-alia, that the applicant, a partnership firm registered as micro scale industry under the provisions of Micro Small Medium Development Act, 2006, and engaged in the business of manufacturing of glassware, glass bottle, glass bangles and other glass items, submitted its offer pursuant to notice inviting E-bid for rate contract of new glass nips 180 ml and bottles 750 ml with/without corrugated boxes for country liquor and emerged as lowest bidder. A letter of acceptance dated 13.08.2021 was issued intimating that the bid of the applicant has been accepted. The applicant was directed to provide performance security guarantee of the amount equivalent to 2.50% of the cost of contract. It was also informed that terms and conditions, as mentioned under the bid document, shall be applicable over the said work. Thereafter, the applicant submitted performance guarantee for an amount of Rs.95,25,000/-. Thereafter, an agreement was entered into between the applicant and the respondent on 08.09.2021 for supply of new glass nips 180 ml and bottles 750 ml at various reduction centers of the respondent. The period of agreement was one year from the signing of the agreement, extendable for a further period of three months. 2. After execution of the agreement, the respondent issued several purchase orders for supply of the items in specified quantity to the referred reduction centers of respondent and the applicant started making supply. Vide letter dated 14.03.2022, the respondent required the applicant to meet supply schedule of the glass bottles for the month of March, 2022. It is the case of the applicant that owing to certain increase in the cost of manufacturing and the agreement being silent on the issue of variation in cost in case of increase, it became impossible for the applicant to perform its obligation and continue its supply. The applicant sent notices on 16.03.2022 and 25.03.2022, informing the reason for its inability to continue the supply. The applicant sent notices on 16.03.2022 and 25.03.2022, informing the reason for its inability to continue the supply. According to the applicant, it was on account of pandemic situation resulting in steep rise in cost of material including raw material required to be procured for manufacturing of glass bottles as well as nips. Because of the sudden and unforeseen inflation in price of the dominant raw material for manufacturing of bottles, it became impossible to continue supplies. The respondent did not respond to applicant's application and, therefore, the applicant was under belief that the request of the applicant has been acceded to. However, the respondent issued a letter on 16.05.2022 to the banker of the applicant requiring to revoke the bank guarantee furnished by the applicant owing to the fact that the applicant is not making supplies of bottles, which was informed to the applicant by its banker on 20.05.2022. In these circumstances, the applicant filed a suit praying for permanent injunction against its banker not to entertain any request for encashment of the bank guarantee, whereupon an interim order directing the parties to maintain status quo was passed by the Civil Court on 23.05.2022. The applicant also submitted an application under Section 9 of the Act of 1996 before the Commercial Court. The said application was however rejected on 18.07.2022, against which an appeal under Section 37 of the Act of 1996 was preferred and the same is pending. 3. During pendency of the aforesaid proceedings, the applicant received an office order dated 25.05.2022 intimating that the respondent has terminated the contract awarded to the applicant and it has also been blacklisted. Recovery of an amount of Rs.2,05,34,844/- was raised. Thereafter, another letter was issued on 04.07.2022, by which the respondent swelled the amount of recovery to the tune of Rs.4,21,56,882/-. Thus, a total recovery of Rs.6,26,91,726/- was demanded, which was protested by the applicant vide its letter dated 05.08.2022. 4. Since Clause 18 of the General Terms and Conditions of Bid and Contract provided for resolution of dispute through the process of arbitration, the present application has been filed stating that the dispute has arisen between the parties on account of termination of contract and imposition of penalty and blacklisting, which according to the applicant are illegal. It is the case of the applicant that due to frustration and impossibility, the contract could no longer be performed. It is the case of the applicant that due to frustration and impossibility, the contract could no longer be performed. Moreover, the respondent has raised exorbitant and illegal recovery of more than Rs.6 crores and has also blacklisted the applicant. Therefore, a prayer for appointment of an arbitrator has been made. 5. In reply, the respondent stated that under the agreement between the parties, it was mutually agreed, as per Clause 31 of the Special Terms and Conditions of the Contract, that rate quoted shall remain firm during currency of the supply contract and no escalation would be allowed. Therefore, the claim of escalation is beyond the subject matter of dispute under the agreement. According to the respondent, the claim is outside the scope of agreement and, therefore, it is not arbitrable. There is no tenable dispute with regard to contract where arbitration clause could be made applicable. 6. As against the applicant's claim that a dispute has arisen, which ought to be referred to an Arbitrator for adjudication of dispute through the process of arbitration, the respondent has come out with a case of non-arbitrability of the dispute. 7. It is also not in dispute that the agreement between the parties contains arbitration clause 18, which reads as under:- "In case of any dispute arising out of any matter related to the bid/contract/agreement, the matter will be referred to sole arbitrator appointed by Director in charge RSGSM whose decision shall be final and binding on both the parties. The seat of arbitration shall be Jaipur. The fee and other expenses of the arbitrator shall be borne by both the parties equally." 8. There is no dispute with regard to existence of agreement between the parties, but the issue raised by the respondent is with regard to non-arbitrability of the dispute. 9. This aspect is required to be considered keeping in forefront the legal position, as adumbrated in plethora of decisions of the Apex Court dealing with the aspect of non-arbitrability of the dispute. 10. A Larger Bench of the Hon’ble Supreme Court in the case of Vidya Drolia & Others Versus Durga Trading Corporation, (2021) 2 Supreme Court Cases 1, while deciding a reference made to it, has examined in great details the legal position with regard to scope of judicial review at the referral stage both on the aspects of existence of agreement and non arbitrability. Navigating through various provisions of the Act of 1996, amendments made from time to time and survey of earlier decisions dealing with the aforesaid aspects, the Hon’ble Supreme Court examined legal position as below:- “31. We are clearly bound by the dictum of the Constitutional Bench judgment in Patel Engineering Ltd. that the scope and ambit of court’s jurisdiction under Sections 8 or 11 of the Arbitration Act is similar. An application under Section 11 of the Arbitration Act need not set out in detail the disputes or the claims and may briefly refer to the subject matter or broad contours of the dispute. However, where judicial proceedings are initiated and pending, specific details of the claims and disputes are normally pleaded and, therefore, the court or the judicial authority has the advantage of these details. There is a difference between a non-arbitrable claim and non-arbitrable subject matter. Former may arise on account of scope of the arbitration agreement and also when the claim is not capable of being resolved through arbitration. Generally non-arbitrability of the subject matter would relate to non-arbitrability in law. Further, the decision in Sukanya Holdings (P) Ltd. has to be read along with subsequent judgment of this Court in Chloro Controls India Private Limited v. Severn Trent Water Purification Inc. (2013) 1 SCC 641 . 32. ……. 71. Complexity is not sufficient to ward off arbitration. In terms of the mandate of Section 89 of the Civil Procedure Code and the object and purpose behind the Arbitration Act and the mandatory language of Sections 8 and 11, the mutually agreed arbitration clauses must be enforced. The language of Sections 8 and 11 of the Arbitration Act are peremptory in nature. Arbitration Act has been enacted to promote arbitration as a transparent, fair, and just alternative to court adjudication. Public policy is to encourage and strengthen arbitration to resolve and settle economic, commercial and civil disputes. Amendments from time to time have addressed the issues and corrected the inadequacies and flaws in the arbitration procedure. It is for the stakeholders, including the arbitrators, to assure that the arbitration is as impartial, just, and fair as court adjudication. Public policy is to encourage and strengthen arbitration to resolve and settle economic, commercial and civil disputes. Amendments from time to time have addressed the issues and corrected the inadequacies and flaws in the arbitration procedure. It is for the stakeholders, including the arbitrators, to assure that the arbitration is as impartial, just, and fair as court adjudication. It is also the duty of the courts at the post-award stage to selectively yet effectively exercise the limited jurisdiction, within the four corners of Section 34(2)(b)(ii) read with Explanations 1 and 2 and check any conflict with the fundamental policy of the applicable law. We would subsequently refer to the ‘second look’ principle which is applicable in three specific situations dealing with arbitrability as per the mandate of Section 34 of the Arbitration Act. 72. Recently, the Supreme Court of Canada in TELUS Communications Inc. v. Avraham Wellman, (2019) SCC 19 while conceding that arbitration as a method of dispute resolution was met with “overt hostility” for a long time on public policy grounds as it ousts jurisdiction of courts, observed that the new legislation, the Arbitration Act of 1991, marks a departure as it encourages parties to adopt arbitration in commercial and other matters. By putting party autonomy on a high pedestal, the Act mandates that the parties to a valid arbitration agreement must abide by the consensual and agreed mode of dispute resolution. The courts must show due respect to arbitration agreements particularly in commercial settings by staying the court proceedings, unless the legislative language is to the contrary. The principle of party autonomy goes hand in hand with the principle of limited court intervention, this being the fundamental principle underlying modern arbitration law. Party autonomy is weaker in non-negotiated “take it or leave it” contracts and, therefore, the legislature can through statutes shield the weakest and vulnerable contracting parties like consumers. This is not so in negotiated agreements or even in adhesion contracts having an arbitration clause in commercial settings. Virtues of commercial and civil arbitration have been recognised and accepted and the courts even encourage the use of arbitration. 73. ……... 76. This is not so in negotiated agreements or even in adhesion contracts having an arbitration clause in commercial settings. Virtues of commercial and civil arbitration have been recognised and accepted and the courts even encourage the use of arbitration. 73. ……... 76. In view of the above discussion, we would like to propound a four-fold test for determining when the subject matter of a dispute in an arbitration agreement is not arbitrable: 76.1 (1) when cause of action and subject matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem. 76.2 (2) when cause of action and subject matter of the dispute affects third party rights; have erga omnes effect; require centralized adjudication, and mutual adjudication would not be appropriate and enforceable. 76.3 (3) when cause of action and subject matter of the dispute relates to inalienable sovereign and public interest functions of the State and hence mutual adjudication would be unenforceable. 76.4 (4) when the subject-matter of the dispute is expressly or by necessary implication non-arbitrable as per mandatory statute(s). 76.5 These tests are not watertight compartments; they dovetail and overlap, albeit when applied holistically and pragmatically will help and assist in determining and ascertaining with great degree of certainty when as per law in India, a dispute or subject matter is non-arbitrable. Only when the answer is affirmative that the subject matter of the dispute would be non-arbitrable. 76.6. However, the aforesaid principles have to be applied with care and caution as observed in Olympus Superstructures (P) Ltd.: (SCC p.669, para 35) “35...Reference is made there to certain disputes like criminal offences of a public nature, disputes arising out of illegal agreements and disputes relating to status, such as divorce, which cannot be referred to arbitration. It has, however, been held that if in respect of fats relating to a criminal matter, say, physical injury, if there is a right to damages for personal injury, then such a dispute can be referred to arbitration (Keir v. Leeman). Similarly, it has been held that a husband and a wife may refer to arbitration the terms on which they shall separate, because they can make a valid agreement between themselves on that matter (Soilleux v. Herbst, Wilson v. Wilson and Cahill v. Cahill).” 77. Similarly, it has been held that a husband and a wife may refer to arbitration the terms on which they shall separate, because they can make a valid agreement between themselves on that matter (Soilleux v. Herbst, Wilson v. Wilson and Cahill v. Cahill).” 77. Applying the above principles to determine non-arbitrability, it is apparent that insolvency or intracompany disputes have to be addressed by a centralized forum, be the court or a special forum, which would be more efficient and has complete jurisdiction to efficaciously and fully dispose of the entire matter. They are also actions in rem. Similarly, grant and issue of patents and registration of trademarks are exclusive matters falling within the sovereign or government functions and have erga omnes effect. Such grants confer monopoly rights. They are non-arbitrable. Criminal cases again are not arbitrable as they relate to sovereign functions of the State. Further, violations of criminal law are offenses against the State and not just against the victim. Matrimonial disputes relating to the dissolution of marriage, restitution of conjugal rights etc. are not arbitrable as they fall within the ambit of sovereign functions and do not have any commercial and economic value. The decisions have erga omnes effect. Matters relating to probate, testamentary atter etc. are actions in rem and are a declaration to the world at large and hence are non-arbitrable. 78. ……….. 82. Issue of non-arbitrability can be raised at three stages. First, before the court on an application for reference under Section 11 or for stay of pending judicial proceedings and reference under Section 8 of the Arbitration Act; secondly, before the arbitral tribunal during the course of the arbitration proceedings; or thirdly, before the court at the stage of the challenge to the award or its enforcement. Therefore, the question – ‘Who decides non-arbitrability?’ and, in particular, the jurisdiction of the court at the first look stage, that is, the referral stage. 83. ……….. 84. Under the Arbitration Act, 1940, the jurisdiction to settle and decide non-arbitrability issues relating to existence, validity, scope as well as whether the subject matter was capable of arbitration, with possible exception in case of termination, novation, frustration and ‘accord and satisfaction’ when contested on facts, was determined and decided at the first or at the reference stage by the courts. The principle being that the court should be satisfied about the existence of a valid arbitration agreement and that the disputes have arisen with regard to the subject matter of the arbitration agreement. At this stage, the court would be, however, not concerned with the merits or sustainability of the disputes. Despite best efforts to contain obstructive tactics, adjudication and final decision of non-arbitrability issues at the reference stage would invariably stop, derail and thwart the proceedings in the courts for years. 85. ………… 132. The courts at the referral stage do not perform ministerial functions. They exercise and perform judicial functions when they decide objections in terms of Sections 8 and 11 of the Arbitration Act. Section 8 prescribes the courts to refer the parties to arbitration, if the action brought is the subject of an arbitration agreement, unless it finds that prima facie no valid arbitration agreement exists. Examining the term ‘prima facie’, in Nirmala J. Jhala v. State of Gujarat, (2013) 4 SCC 301 , this Court had noted: (SCC p.320, para 48) “48. ‘27…. A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the case were [to be] believed. While determining whether a prima facie case had been made out or not the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence.” 133. Prima facie case in the context of Section 8 is not to be confused with the merits of the case put up by the parties which has to be established before the arbitral tribunal. It is restricted to the subject matter of the suit being prima facie arbitrable under a valid arbitration agreement. Prima facie case means that the assertions on these aspects are bona fide. When read with the principles of separation and competence-competence and Section 34 of the Arbitration Act, the referral court without getting bogged-down would compel the parties to abide unless there are good and substantial reasons to the contrary. 134. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable disputes. 134. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and non-arbitrable disputes. The prima facie review at the reference stage is to cut the deadwood and trim off the side branches in straight forward cases where dismissal is barefaced and pellucid and when on the facts and law the litigation must stop at the first stage. Only when the court is certain that no valid arbitration agreement exists or the disputes/subject matter are not arbitrable, the application under Section 8 would be rejected. At this stage, the court should not get lost in thickets and decide debatable questions of facts. Referral proceedings are preliminary and summary and not a mini trial. This necessarily reflects on the nature of the jurisdiction exercised by the court and in this context, the observations of B.N. Srikrishna, J. of “plainly arguable” case in Shin-Etsu Chemical Co. Ltd. (Supra) are of importance and relevance. Similar views are expressed by this Court in Vimal Kishor Shah v. Jayesh Dinesh Shah (2016) 8 SCC 788 wherein the test applied at the pre-arbitration stage was whether there is a “good arguable case” for the existence of an arbitration agreement. 135. ……... 139. We would not like be too prescriptive, albeit observe that the court may for legitimate reasons, to prevent wastage of public and private resources, can exercise judicial discretion to conduct an intense yet summary prima facie review while remaining conscious that it is to assist the arbitration procedure and not usurp jurisdiction of the arbitral tribunal. Undertaking a detailed full review or a long-drawn review at the referral stage would obstruct and cause delay undermining the integrity and efficacy of arbitration as a dispute resolution mechanism. Conversely, if the court becomes too reluctant to intervene, it may undermine effectiveness of both the arbitration and the court. There are certain cases where the prima facie examination may require a deeper consideration. The court’s challenge is to find the right amount of and the context when it would examine the prima facie case or exercise restraint. The legal order needs a right balance between avoiding arbitration obstructing tactics at referral stage and protecting parties from being forced to arbitrate when the matter is clearly non-arbitrable. 140. …….. 143. We would now examine Section 11 of the Arbitration Act. The legal order needs a right balance between avoiding arbitration obstructing tactics at referral stage and protecting parties from being forced to arbitrate when the matter is clearly non-arbitrable. 140. …….. 143. We would now examine Section 11 of the Arbitration Act. As noticed above sub-section (6-A) was inserted by the Act 3 of 2016 with retrospective effect from 23-10-2015 and omitted by Act 33 of 2019. Section 11 (6) requires the court to appoint an arbitrator on an application made by a party. Section (6-A) to Section 11 stipulates that the court shall, at the stage of appointment under sub-sections (4), (5) or (6), confine itself to the examination of the existence of an arbitration agreement. Sub-section (6-A) was omitted by Act 33 of 2019, but the omission is in view of the introduction of a new regime of institutionalised arbitration as per the report of the committee headed by Justice B. N. Srikrishna, dated 30-07-2017 which records for the reason of recommending the omission as: “Thus, it can be seen that after the Amendment Act of 2019, Section 11 (6-A) has been omitted because appointment of arbitrators is to be done institutionally, in which case the Supreme Court or the High Court under the old statutory regime are no longer required to appoint arbitrators and consequently to determine whether an arbitration agreement exists.” 144. As observed earlier, SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 explains and holds that Sections 8 and 11 are complementary in nature as both relate to reference to arbitration. Section 8 applies when judicial proceeding is pending and an application is filed for stay of judicial proceeding and for reference to arbitration. Amendments to Section 8 vide Act 3 of 2016 have not been omitted. Section 11 covers the situation where the parties approach a court for appointment of an arbitrator. Mayavati Trading Private Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714 in our humble opinion, rightly holds that Patel Engineering Ltd. (Supra) has been legislatively overruled and hence would not apply even post omission of Sub-section (6-A) to Section 11 of the Arbitration Act. Mayavati Trading Private Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC 714 in our humble opinion, rightly holds that Patel Engineering Ltd. (Supra) has been legislatively overruled and hence would not apply even post omission of Sub-section (6-A) to Section 11 of the Arbitration Act. Mayavati Trading Private Ltd. (Supra) has elaborated upon the object and purposes and history of the amendment to Section 11, with reference to Sub-section (6-A) to elucidate that the Section, as originally enacted, was facsimile with Article 11 of the UNCITRAL Model of law of arbitration on which the Arbitration Act was drafted and enacted. Referring to the legislative scheme of Section 11, different interpretations, and the Law Commission’s Reports, it has been held that the omitted Sub-section (6-A) to Section 11 of the Arbitration Act would continue to apply and guide the courts on its scope of jurisdiction at stage one, that is, the pre-arbitration stage. 145. Omission of Sub-section (6-A) by Act 33 of 2019 was with the specific object and purpose and is relatable to by substitution of Sub-sections (12), (13) and (14) to Section 11 of the Arbitration Act by Act 33 of 2019, which, vide Sub-section (3A) stipulates that the High Court and this court shall have the power to designate the arbitral institutions which have been so graded by the Council under Section 43-I, provided where a graded arbitral institution is not available, the concerned High Court shall maintain a panel of arbitrators for discharging the function and thereupon the High Court shall perform the duty of an arbitral institution for reference to the arbitral tribunal. Therefore, it would be wrong to accept that post omission of Sub-section (6-A) to Section 11 the ratio in Patel Engineering Ltd. (Supra) would become applicable. 146. ……. 147.2. The court at the reference stage exercises judicial powers. ‘Examination’, as an ordinary expression in common parlance, refers to an act of looking or considering something carefully in order to discover something (as per Cambridge Dictionary). It requires the person to inspect closely, to test the condition of, or to inquire into carefully (as per Merriam-Webster Dictionary). It would be rather odd for the court to hold and say that the arbitration agreement exists, though ex facie and manifestly the arbitration agreement is invalid in law and the dispute in question is non-arbitrable. It requires the person to inspect closely, to test the condition of, or to inquire into carefully (as per Merriam-Webster Dictionary). It would be rather odd for the court to hold and say that the arbitration agreement exists, though ex facie and manifestly the arbitration agreement is invalid in law and the dispute in question is non-arbitrable. The court is not powerless and would not act beyond jurisdiction, if it rejects an application for reference, when the rbitration clause is admittedly or without doubt is with a minor, lunatic or the only claim seeks a probate of a will. 147.3 …… 147.4. Most jurisdictions accept and require prima facie review by the court on non-arbitrability aspects at the referral stage. 147.5. ….. 147.6. Exercise of power of prima facie judicial review of existence as including validity is justified as a court is the first forum that examines and decides the request for the referral. Absolute “hands off” approach would be counterproductive and harm arbitration, as an alternative dispute resolution mechanism. Limited, yet effective intervention is acceptable as it does not obstruct but effectuates arbitration. 147.7. Exercise of the limited prima facie review does not in any way interfere with the principle of competence– competence and separation as to obstruct arbitration proceedings but ensures that vexatious and frivolous matters get over at the initial stage. 147.8. ……. 147.9 Even in Duro Felguera, S.A. v. Gangavaram Port Ltd. (2017) 9 SCC 729 , Kurian Joseph, J., in para 52, had referred to Section 7(5) and thereafter in para 53 referred to a judgment of this Court in M.R. Engineers and Contractors (P) Limited v. Som Datt Builders Limited, (2009) 7 SCC 696 to observe that the analysis in the said case supports the final conclusion that the Memorandum of Understanding in the said case did not incorporate an arbitration clause. Thereafter, reference was specifically made to SBP & Co. v. Patel Engineering Ltd. (Supra) and National Insurance Co. Ltd. v. Boghara Polyfab (P) Limited (2009) 1 SCC 267 to observe that the legislative policy is essential to minimise court’s interference at the pre-arbitral stage and this was the intention of sub-section (6) to Section 11 of the Arbitration Act. Thereafter, reference was specifically made to SBP & Co. v. Patel Engineering Ltd. (Supra) and National Insurance Co. Ltd. v. Boghara Polyfab (P) Limited (2009) 1 SCC 267 to observe that the legislative policy is essential to minimise court’s interference at the pre-arbitral stage and this was the intention of sub-section (6) to Section 11 of the Arbitration Act. Paragraph 48 in Duro Felguera, S.A. (Supra) specifically states that the resolution has to exist in the arbitration agreement, and it is for the court to see if the agreement contains a clause which provides for arbitration of disputes which have arisen between the parties. Para 59 is more restrictive and requires the court to see whether an arbitration agreement exists – nothing more, nothing less. Read with the other findings, it would be appropriate to read the two paragraphs as laying down the legal ratio that the court is required to see if the underlying contract contains an arbitration clause for arbitration of the disputes which have arisen between the parties - nothing more, nothing less. Reference to decisions in Patel Engineering Ltd. (Supra) and Boghara Polyfab Private Limited (Supra) was to highlight that at the reference stage, post the amendments vide Act 3 of 2016, the court would not go into and finally decide different aspects that were highlighted in the two decisions. 147.10. In addition to Garware Wall Ropes Ltd. (Supra), this Court in Oriental Insurance Co. Ltd. v. Narbheram Power & Steel (P) Ltd. (2018) 6 SCC 534 and Hyundai Engg. & Construction Co. Ltd. (Supra), both decisions of three Judges, has rejected the application for reference in the insurance contracts holding that the claim was beyond and not covered by the arbitration agreement. The court felt that the legal position was beyond doubt as the scope of the arbitration clause was fully covered by the dictum in Vulcan Insurance Co. Ltd v. Maharaj Singh (1976) 1 SCC 943 . Similarly, in M/s. PSA Mumbai Investments PTE. Limited v. Jawaharlal Nehru Port Trust, (2018) 10 SCC 525 , this Court at the referral stage came to the conclusion that the arbitration clause would not be applicable and govern the disputes. Accordingly, the reference to the arbitral tribunal was set aside leaving the respondent to pursue its claim before an appropriate forum. 147.11. Limited v. Jawaharlal Nehru Port Trust, (2018) 10 SCC 525 , this Court at the referral stage came to the conclusion that the arbitration clause would not be applicable and govern the disputes. Accordingly, the reference to the arbitral tribunal was set aside leaving the respondent to pursue its claim before an appropriate forum. 147.11. The interpretation appropriately balances the allocation of the decision-making authority between the court at the referral stage and the arbitrators’ primary jurisdiction to decide disputes on merits. The court as the judicial forum of the first instance can exercise prima facie test jurisdiction to screen and knockdown ex facie meritless, frivolous and dishonest litigation. Limited jurisdiction of the courts ensures expeditious, alacritous and efficient disposal when required at the referral stage. 148. …… 154. Discussion under the heading “Who decides Arbitrability?” can be crystallized as under: 154.1. Ratio of the decision in Patel Engineering Ltd. (Supra) on the scope of judicial review by the court while deciding an application under Sections 8 or 11 of the Arbitration Act, post the amendments by Act 3 of 2016 (with retrospective effect from 23 -10-2015) and even post the amendments vide Act 33 of 2019 (with effect from 09-08-2019), is no longer applicable. 154.2. Scope of judicial review and jurisdiction of the court under Section 8 and 11 of the Arbitration Act is identical but extremely limited and restricted. 154.3. The general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence-competence, is that the arbitral tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. The court has been conferred power of “second look” on aspects of non-arbitrability post the award in terms of sub-clauses (i), (ii) or (iv) of Section 34(2)(a) or sub-clause (i) of Section 34(2)(b) of the Arbitration Act. 154.4. Rarely as a demurrer the court may interfere at the Sections 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably ‘non-arbitrable’ and to cut off the deadwood. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably ‘non-arbitrable’ and to cut off the deadwood. The court by default would refer the matter when contentions relating to non-arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the arbitral tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism." In the case of Indian Oil Corporation Limited Versus NCC Limited, (2023) 2 Supreme Court Cases 539, the Hon’ble Supreme Court, after survey of its earlier judicial pronouncements, particularly the decision in the case of Vidya Drolia & Others (Supra), observed as below:- “73. In the recent decision of this Court in DLF Home Developers Ltd. v. Rajapura Homes (P) Ltd (2021) 16 SCC 743 ) in which this Court also had an occasion to consider Section 11(6-A) of the Arbitration Act and ultimately has observed, after referring to and considering the decision of the three-Judge Bench of this Court in Vidya Drolia (supra) that the jurisdiction of the Court under Section 11 of the Arbitration Act is primarily to find out whether there existed a written agreement between the parties for resolution of the dispute and whether the aggrieved party has made out a prima facie arguable case, it is further observed that limited jurisdiction, however, does not denude the Court of its judicial function to look beyond the bare existence of an arbitration clause to cut the deadwood. In the said decision, this Court had taken note of the observations made in the case of Vidya Drolia (supra) that with a view to prevent wastage of public and private resources, the Court may conduct ‘prima facie review’ at the stage of reference to weed out any frivolous or vexatious claims.” 12. In another decision in the case of NTPC Limited Versus SPML Infra Limited, (2023) 9 Supreme Court Cases 385, the Hon’ble Supreme Court considered the legal position with regard to the non-arbitrability of the dispute. It was explained by the Hon’ble Supreme Court as below:- “Position of Law 16. In another decision in the case of NTPC Limited Versus SPML Infra Limited, (2023) 9 Supreme Court Cases 385, the Hon’ble Supreme Court considered the legal position with regard to the non-arbitrability of the dispute. It was explained by the Hon’ble Supreme Court as below:- “Position of Law 16. In the present case, we are concerned with the pre-referral jurisdiction of the High Court under Section 11 of the Act and would like to underscore the limited scope within which an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 has to be considered. 17. The position of law with respect to the pre-referral jurisdiction, as it existed before the advent of Section 11(6-A) in the Act, was based on a well-articulated principle formulated by this Court in National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd (2009) 1 SCC 267 . In Boghara Polyfab, this Court held that the issue of non-arbitrability of a dispute will have to be examined by the Court in cases where accord and discharge of the contract is alleged. Following the principle in Boghara Polyfab, this Court in Union of India v. Master Construction Co. (2011) 12 SCC 349 observed that when the validity of a discharge voucher, no-claim certificate or a settlement agreement is in dispute, the Court must prima facie examine the credibility of the allegations before referring the parties to arbitration. Yet again in New India Assurance Co. Ltd. v. Genus Power Infrastructure Ltd. (2015) 2 SCC 424 , this Court observed that allegations of fraud, coercion, duress or undue influence must be prima facie substantiated through evidence by the party raising the allegations. 18. In a legislative response to these precedents, through the Arbitration and Conciliation (Amendment) Act 2015, sub-section (6-A) was added to Section 11 of the Act, which reads as follows: “11. (6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.” (emphasis supplied) 19. (6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.” (emphasis supplied) 19. Taking cognizance of the legislative change, this Court in Duro Felguera, SA Versus Gangavaram Port Ltd., (2017) 9 SCC 729 noted that post the 2015 Amendments, the jurisdiction of the Court under Section 11(6) of the Act is limited to examining whether an arbitration agreement exists between the parties-“nothing more, nothing less” 20. However, in the year 2019, in United India Insurance Co. Ltd. v. Antique Art Exports (P) Ltd. (2019) 5 SCC 362 , this Court had nevertheless accepted an objection of “accord and satisfaction” in opposition to an application for reference to arbitration. 21. It did not take much time for this Court to reverse the approach in Antique Art Exports (P) Ltd. (Supra). A three-Judge Bench in Mayavati Trading (P) Ltd. Versus Pradyuat Deb Burman (2019) 8 SCC 714 expressly overruled the abovereferred decision in Antique Art Exports, observing that: (Mayavati Trading case, SCC pp. 724-25, Para-10) “10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgment, as Section 11(6-A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera, SA." (emphasis in original) Having navigated through various judicial pronouncements and the common thread of prima-facie test, it was authoritatively held as below:- “24. Following the general rule and the principle laid down in Vidya Drolia (Supra) this Court has consistently been holding that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. In Pravin Electricals (P). Ltd. v. Galaxy Infra and Engg. (P). Following the general rule and the principle laid down in Vidya Drolia (Supra) this Court has consistently been holding that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. In Pravin Electricals (P). Ltd. v. Galaxy Infra and Engg. (P). Ltd. (2021) 5 SCC 671 , Sanjiv Prakash v. Seema Kukreja (2021) 9 SCC 732 and Indian Oil Corporation Ltd. v. NCC Ltd (2023) 2 SCC 539 ., the parties were referred to arbitration, as the prima facie review in each of these cases on the objection of non-arbitrability was found to be inconclusive. Following the exception to the general principle that the Court may not refer parties to arbitration when it is clear that the case is manifestly and ex facie non-arbitrable, in BSNL v. Nortel Networks (India) (P) Ltd. (2021) 5 SCC 738 (hereinafter “Nortel Networks”) and Secunderabad Cantonment Board v. B. Ramachandraiah & Sons (2021) 5 SCC 705 , arbitration was refused as the claims of the parties were demonstrably time-barred. Eye of the needle 25. The above-referred precedents crystallise the position of law that the pre-referral jurisdiction of the courts under Section 11(6) of the Act is very narrow and inheres two inquiries. The primary inquiry is about the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to the agreement and the applicant’s privity to the said agreement. These are matters which require a thorough examination by the referral court. The secondary inquiry that may arise at the reference stage itself is with respect to the non-arbitrability of the dispute. 26. As a general rule and a principle, the arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. As an exception to the rule, and rarely as a demurrer, the Referral Court may reject claims which are manifestly and ex-facie non-arbitrable. Explaining this position, flowing from the principles laid down in Vidya Drolia & Others (supra), this Court in a subsequent decision in Nortel Networks (Supra) held: (Nortel Networks case, SCC p.764, para 45) “45. ..45.1. … While exercising jurisdiction under Section 11 as the judicial forum, the court may exercise the prima facie test to screen and knockdown ex facie meritless, frivolous, and dishonest litigation. Limited jurisdiction of the courts would ensure expeditious and efficient disposal at the referral stage. ..45.1. … While exercising jurisdiction under Section 11 as the judicial forum, the court may exercise the prima facie test to screen and knockdown ex facie meritless, frivolous, and dishonest litigation. Limited jurisdiction of the courts would ensure expeditious and efficient disposal at the referral stage. At the referral stage, the Court can interfere “only” when it is “manifest” that the claims are ex facie time-barred and dead, or there is no subsisting dispute.” 27. The standard of scrutiny to examine the non-arbitrability of a claim is only prima facie. Referral courts must not undertake a full review of the contested facts; they must only be confined to a primary first review and let facts speak for themselves. This also requires the Courts to examine whether the assertion on arbitrability is bona fide or not. The prima facie scrutiny of the facts must lead to a clear conclusion that there is not even a vestige of doubt that the claim is non-arbitrable. On the other hand, even if there is the slightest doubt, the rule is to refer the dispute to arbitration”. 13. In yet another recent judicial pronouncement in the case of Magic Eye Developers Private Limited Versus M/s. Green Edge Infrastructure Private Limited & Others, (2023) 8 Supreme Court Cases 50, following pertinent observations were made by the Hon’ble Supreme Court:- “8. While considering the aforesaid issue, Section 11(6-A) of the Arbitration Act which has been added through the Arbitration and Conciliation Amendment Act, 2015 is required to be read, which reads as follows: “11. (6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement” (emphasis supplied) 9. Thus, post Arbitration and Conciliation Amendment Act, 2015, the jurisdiction of the court under Section 11(6) of the Act is limited to examining whether an arbitration agreement exists between the parties-“nothing more, nothing less”. Thus, as per Section 11(6-A) of the Act, it is the duty cast upon the Referral Court to consider the dispute/issue with respect to the existence of an arbitration agreement. 10. Thus, as per Section 11(6-A) of the Act, it is the duty cast upon the Referral Court to consider the dispute/issue with respect to the existence of an arbitration agreement. 10. At this stage, it is required to be noted that as per the settled position of law, pre-referral jurisdiction of the court under Section 11(6) of the Arbitration Act is very narrow and inheres two inquiries. The primary inquiry is about the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to the agreement and the applicant’s privity to the said agreement. The said matter requires a thorough examination by the Referral Court. (para 25 of the decision in NTPC). The Secondary inquiry that may arise at the reference stage itself is with respect to the non-arbitrability of the dispute. Both are different and distinct.” 14. Keeping in forefront the above settled legal position with regard to existence of an arbitration agreement, non-arbitrability and the scope of judicial review at the referral stage while dealing with the application under Section 11 (6) of the Act of 1996 seeking appointment of an arbitrator, I shall now deal with the issues raised in the present application. 15. In the present case, the main plank of the submissions of the respondent is that the parties mutually agreed and Clause 31 of the Special Terms and Conditions of the Contract clearly provided that rate quoted shall remain firm during supply of contract and no escalation would be allowed. Therefore, it is clear that parties had mutually consented that the rate shall be fixed. The case of the applicant has been that because of impossibility on his part of contract caused by the unforeseen and exceptional circumstances due to surge of Covid, the applicant could not complete supplies in terms of the contract. Therefore, to the extent the applicant's claim of escalation is clearly not tenable and outside the scope of agreement between the parties. 16. Apparently, the respondent terminated the contract on account of failure on the part of the applicant to continue supplies as per the terms and conditions of the contract. 17. However, apart from challenge to termination of contract being illegal, the applicant has also disputed the amount recoverable against it on account of its failure to supply balance quantity for the remaining period of contract. 17. However, apart from challenge to termination of contract being illegal, the applicant has also disputed the amount recoverable against it on account of its failure to supply balance quantity for the remaining period of contract. Therefore, even for the argument sake, if it is accepted that the termination of contract was valid for the reason that the applicant failed to ensure supply of balance quantity, as per schedule, during the period of contract, a serious issue with regard to amount recoverable against the applicant has been raised. The respondent has issued recovery letter for recovery of an amount to the tune of Rs.6,26,91,726/-, which is clear from letter dated 04.07.2022 of the respondent. That, according to the respondent, is calculated according to clause 8 dealing with risk and cost value as also the claim loss of Rs.2,05,34,844/- under clause 7 of the supply order. According to the applicant, calculation has not been made in accordance with the terms of the contract. The respondent has not demonstrated whether any supply of balance quantity was being placed. The respondent has failed to show that supply of balance quantity was procured at higher rates and further it has not been pointed out by the respondent that the order dated 16.05.2022 was for the balance quantity allegedly not supplied by the applicant. Further, the applicant has been blacklisted also. The bank guarantee has also been invoked, which is clear from respondent's letter dated 25.05.2022. 18. As per the settled legal position, as adumbrated in plethora of decisions referred to above, when it is manifestly and expressly certain that the dispute is not-arbitrable, prayer for appointment of arbitrator may be rejected. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably ‘non-arbitrable’ and to cut off the deadwood. The court by default would refer the matter when contentions relating to non-arbitrability are plainly arguable. At the referral stage, it is not for the Court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the arbitral tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism. The court, at the reference stage, exercises judicial powers. At the referral stage, it is not for the Court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the arbitral tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism. The court, at the reference stage, exercises judicial powers. When it appears that prima facie review would be inconclusive, or on consideration inadequate as it requires detailed examination, the matter should be left for final determination by the arbitral tribunal selected by the parties by consent. In such cases, a full review by the court at the referral stage would encroach on the jurisdiction of the arbitral tribunal and violate the legislative scheme allocating jurisdiction between the courts and the arbitral tribunal. It has been consistently held that centralisation of litigation with the arbitral tribunal as the primary and first adjudicator is beneficent as it helps in quicker and efficient resolution of dispute. 19. Importantly, it has been held in decisions, referred to hereinabove, that while dealing with petition under Section 11, the Court by default would refer the matter when contentions relating to non-arbitrability are plainly arguable. In such case, arbitration is left open for decision by the Arbitral Tribunal. It is only in a very limited category of cases when there is no doubt that claim is expressly time barred and/or that the dispute is non-arbitrable that the Court may decline to make reference. However, if there is even slightest doubt, the rule is to refer the dispute to arbitration, otherwise it would encroach upon jurisdiction of the arbitral tribunal. 20. In view of above considerations, the legal position and its application to the factual details of the dispute between the parties, this Court is inclined to refer the dispute between the parties for adjudication through the process of arbitration as per arbitration clause. Hon'ble Mr. Justice Prakash Gupta (Retd.), 41, Mahadev Nagar, Nandpuri, Hawa Sadak, Jaipur, is appointed as the Sole Arbitrator to adjudicate upon the dispute and pass an award. The Sole Arbitrator shall be entitled to fee, as provided under Fourth Schedule appended to the Act of 1996. 21. The Registry of this Court shall inform Hon'ble Mr. Justice Prakash Gupta (Retd.) regarding his appointment as Sole Arbitrator. The parties shall also duly inform the Arbitrator towards commencement of arbitral proceedings in accordance with law. 22. The application stands allowed.