At the Section 11 referral stage, judicial inquiry is confined to the existence of a valid arbitration agreement.

The Petitioner, a supplier of electrical items to the Indian Railways since 2019, succeeded in an e-tender floated by the Respondent in September 2025 for a contract valued at approximately ₹2.62 crores. It furnished the requisite security deposit and performance bank guarantee and placed purchase orders in December 2025.

On 2 February 2026, the Respondent issued correspondence proposing termination on the ground of a discrepancy between the Petitioner’s firm name in the e-tender and its Electrical Contractor’s licence.

On 26 February 2026, the Respondent issued a termination notice alleging that the Petitioner had failed to commence work or demonstrate progress within 48 hours, thereby rescinding the contract under Clause 62 of the Standard General Conditions of Contract (“SGCC”).

The Petitioner invoked the arbitration clause contained in Clause 64(1) of the SGCC and served a notice under Section 21 of the Arbitration and Conciliation Act, 1996, dated 13 March 2026.

During the Section 11 proceedings, the Respondent stated that it had no objection to the appointment of a sole arbitrator.

Whether the parties had a valid arbitration agreement covering the disputes arising from the termination of the contract, warranting reference under Section 11 of the Arbitration and Conciliation Act, 1996.

Whether a sole arbitrator ought to be appointed in view of the arbitration provision in Clause 64(1) of the SGCC and the Respondent’s consent to the reference.

Whether questions concerning arbitrability, jurisdiction, and the merits of the parties’ claims should be determined at the referral stage.

The Court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, under which the referral court’s inquiry at the appointment stage is confined to examining the existence of a valid arbitration agreement.

Clause 64(1) of the SGCC provided for arbitration of disputes or differences concerning the construction or operation of the contract and the parties’ rights and liabilities, subject to specified exceptions.

The Court relied on SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754, for the principle that the Section 11 inquiry is limited to the existence of a valid arbitration agreement.

Issues of arbitrability, jurisdiction, claims, and counterclaims may be raised before and decided by the arbitral tribunal, and observations in a Section 11 order do not determine the merits.

Clause 64(1) of the SGCC constituted a valid arbitration agreement capable of covering the disputes arising from the Respondent’s termination of the contract.

The Petitioner had invoked the clause and served a Section 21 notice, while the Respondent expressly stated that it had no objection to the appointment of a sole arbitrator.

Since the statutory inquiry was limited to the existence of a valid arbitration agreement, the Court found no impediment to constituting the tribunal and did not adjudicate the validity of the termination, the alleged discrepancy in the Petitioner’s name, or the merits of the claims.

Those matters, including any objections to arbitrability or jurisdiction, were left open for determination by the arbitrator.

The arbitration was directed to be conducted under the rules and aegis of the Delhi International Arbitration Centre, with fees payable according to the DIAC Schedule of Fees.

The arbitrator was directed to furnish the disclosures required under Section 12(2) within three weeks of entering reference.

The parties were permitted to raise all pleas, including objections concerning arbitrability and jurisdiction, before the tribunal, and the petition was disposed of accordingly.