A prima facie arbitration agreement suffices for appointing a sole arbitrator under Section 11.

Moneywise Financial Services Pvt. Ltd. filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator under Clause 8.2 of a Loan Agreement dated 29 July 2024.

The Court recorded that Respondent No. 1 had been served and that Respondent Nos. 2 and 3 had refused service; the respondents did not participate in the proceedings.

Clause 8.2 provided for arbitration of disputes arising out of or connected with the agreement, with a mutually appointed sole arbitrator or, failing mutual agreement, appointment in accordance with the Act; the seat was Delhi.

1. Whether the Court should appoint a sole arbitrator under Section 11 of the Act where the agreement contains an arbitration clause and the respondents did not participate in the petition.

2. Whether the parties’ disputes, including any objections to impleadment, arbitrability, or jurisdiction, should be left for determination by the arbitrator.

Section 11 of the Arbitration and Conciliation Act, 1996, requires the Court, at the appointment stage, to confine its enquiry to the prima facie existence of an arbitration agreement.

Under Clause 8.2 of the Loan Agreement, disputes connected with the agreement were to be referred to a sole arbitrator, appointed by mutual consent or, failing that, in accordance with the Act.

The appointed arbitrator was also required to furnish disclosures under Section 12(2) of the Act.

The Court found no dispute regarding the existence of a valid arbitration clause and concluded that there was no impediment to appointing a sole arbitrator.

The respondents’ non-participation did not prevent the Court from deciding the petition on the material before it.

Consistent with the limited scope of Section 11 review, the Court left questions concerning impleadment, arbitrability, and jurisdiction to the arbitrator.

The petition was disposed of by appointing Ms. Rajni Anand, Advocate, as sole arbitrator. The arbitration is to be conducted under the rules and aegis of the Delhi International Arbitration Centre (DIAC), with fees as per its schedule; the arbitrator is to enter upon the reference within three weeks and furnish the requisite disclosure under Section 12(2).

The parties may raise their pleas before the arbitrator, who must decide independently and uninfluenced by the Court’s observations.