A sole arbitrator may be appointed where parties consent and a valid arbitration agreement is undisputed.

Tata Capital Limited filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection against Katyayini Paper Mills Pvt. Ltd. and its connected respondents.

The reliefs sought included security or a bank guarantee for ₹2,53,29,762, restraint against alienation or encumbrance of assets, appointment of a receiver over leased goods and machinery, disclosure of assets and liabilities, and related protective orders.

The Petitioner alleged that the Respondents had defaulted in payment of lease rentals and other contractual dues under the Master Lease Agreement dated 21 October 2024.

The Petitioner issued a legal notice dated 23 March 2026 recalling the lease facility and invoking the arbitration clause under the Master Lease Agreement and the Letter of Guarantee.

A notice under Section 21 of the Act was also issued on 23 March 2026, but the Respondents disputed the proposed appointment of an arbitrator.

During the proceedings, the Respondents expressed no objection to reference of the disputes to arbitration through appointment of a sole arbitrator, and the parties became ad idem on the reference.

Whether the disputes arising between the parties should be referred to arbitration and a sole arbitrator appointed, given the parties’ agreement and the existence of an arbitration clause?

Whether the Petitioner’s Section 9 interim-relief claims should be adjudicated by the Court or pursued before the arbitral tribunal under Section 17 of the Act?

The Court considered the petition under Section 9 of the Arbitration and Conciliation Act, 1996, which enables the Court to grant interim measures before or during arbitral proceedings.

It applied the principle governing appointment of an arbitrator under Section 11 that the Court’s enquiry is confined to examining the prima facie existence of a valid arbitration agreement, relying on SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754.

The Court also directed compliance with the disclosure requirement under Section 12(2), provided liberty to seek interim measures under Section 17 before the tribunal, and directed that the arbitration be conducted under the aegis and rules of the Delhi International Arbitration Centre.

The Court found no dispute regarding the existence of a valid arbitration clause between the parties.

Since both sides agreed that the disputes could be referred to arbitration, and the Respondents did not oppose appointment of a sole arbitrator, the limited prima facie threshold for constitution of the tribunal was satisfied.

Consequently, rather than determining the merits of the Petitioner’s extensive Section 9 claims, the Court constituted the arbitral tribunal and left the parties free to seek appropriate interim measures under Section 17.

The Court also clarified that its observations were confined to the present proceedings and would not prejudice the arbitrator’s independent adjudication of the disputes, including any objections regarding arbitrability or jurisdiction.

The arbitration was directed to be conducted under the rules and aegis of DIAC, subject to the arbitrator furnishing the requisite disclosures under Section 12(2).

The parties were granted liberty to file applications under Section 17 before the arbitrator for interim relief.

The Section 9 petition was accordingly disposed of in those terms.

The order records that the arbitrator should enter upon the reference within two weeks of the order, while paragraph 17 separately records a period of three weeks.