Section 11 Scope And Post-Termination Non-Compete Enforcement: Key Takeaways From Neosky India Ltd. v. Nagendran Kandasamy

Introduction

The Delhi High Court's decision in Neosky India Ltd. & Anr. v. Nagendran Kandasamy & Ors. Dated 11 August 2025 addresses two commercially significant questions: the scope of judicial intervention at the pre-arbitral stage under Section 11 of the Arbitration and Conciliation Act, 1996, and the enforceability of contractual non-compete obligations post-termination, particularly in the context of interim relief under Section 9.

On May 25.2022, Neosky India Limited (“Neosky”), invested in Throttle Aerospace Systems Private Limited (“TAS”), acquiring 60% under a Share Subscription & Shareholders Agreement (“SSHA”), alongside a Non-Compete Agreement (“NCA”) and employment contracts with the original promoters who together held 40% shares and were the respondents in the proceedings. Under SSHA and NCA, the respondents were restrained from engaging in any competing business for 3 years. The dispute arose when Respondents 1-3 resigned from TAS and shortly