An invoked arbitration clause warrants appointment of a sole arbitrator to resolve the parties’ disputes.

The petitioner, an RBI-registered non-banking financial company, stated that respondent No. 1 had borrowed under a Loan Agreement dated 23 February 2024 and defaulted, giving rise to disputes.

The agreement provided for arbitration before a mutually appointed sole arbitrator, with proceedings in Bengaluru and in English.

The petitioner invoked the arbitration clause by notice dated 13 May 2025 under Section 21 of the Arbitration and Conciliation Act, 1996; receiving no response, it petitioned under Section 11(5) for appointment of an arbitrator.

The respondents raised no objection to the appointment and asked that all contentions be left open.

1. Whether the Court should appoint a sole arbitrator to adjudicate the disputes arising under the Loan Agreement.

2. Whether the parties’ claims and contentions should remain open for determination in arbitration.

Section 11(5) of the Arbitration and Conciliation Act, 1996 provides the basis for court appointment of an arbitrator where the agreed appointment procedure requires mutual appointment and the parties do not make that appointment. Section 21 concerns commencement of arbitral proceedings upon receipt of a request to refer the dispute to arbitration.

The Court also applied the parties’ arbitration agreement, which referred disputes to a mutually appointed sole arbitrator and specified Bengaluru as the place of proceedings.

The Court found that the Loan Agreement contained arbitration clauses covering disputes between the parties and that the petitioner had invoked those clauses by issuing a Section 21 notice.

In light of those circumstances—and the respondents’ stated lack of objection to appointment—the Court concluded that a sole arbitrator should be appointed. It left the parties’ substantive claims and contentions for determination in arbitration.

All claims and contentions were left open; the parties were directed to appear before the Centre’s Director on 12 November 2026 at 11:30 a.m.