At the Section 11 stage, judicial inquiry is confined to the prima facie existence of an arbitration agreement.

The Petitioner and the Respondent entered into an agreement dated 11 December 2018 for the work of “Sanitation, Expenses, Sh: Clearing and Sweeping of Palika Bazar”.

After completion of the work, the Respondent issued a completion certificate dated 27 May 2019, following which the Petitioner submitted its final bill.

Disputes arose concerning the alleged withholding of the balance final-bill amount, the GST component, and the security deposit.

The Petitioner invoked the dispute-resolution mechanism under Clause 25 of the agreement and sought constitution of the Dispute Redressal Committee through letters dated 15 January 2026 and 10 February 2026.

As the DRC was not constituted, the Petitioner issued a notice dated 6 April 2026 under Section 21 of the Arbitration and Conciliation Act, 1996, invoking arbitration; however, the parties failed to appoint an arbitrator.

In the Section 11(6) proceedings, the Respondent stated that it had no objection to the appointment of a sole arbitrator by the Court.

Whether a valid arbitration agreement existed between the parties so as to attract the jurisdiction of the Court under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Whether, in the circumstances—including failure to constitute the DRC and failure of the parties to appoint an arbitrator—the Court should appoint a sole arbitrator to adjudicate the disputes.

The Court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, under which the Court may appoint an arbitrator where the agreed appointment procedure has failed.

At the Section 11 stage, the judicial enquiry is confined to examining the prima facie existence of a valid arbitration agreement.

The Court relied on SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754, for this limited-scrutiny principle.

Clause 25 of the agreement required exhaustion of the specified dispute-resolution mechanism and provided for reference of unresolved disputes to arbitration by a sole arbitrator appointed by the Chairperson, NDMC, or the administrative head of NDMC.

The agreement contained Clause 25, which expressly contemplated arbitration of disputes arising out of or relating to the contract.

The Petitioner first invoked the contractual DRC mechanism, but the DRC was not constituted; it subsequently issued a Section 21 notice invoking arbitration, and no arbitrator was appointed by the parties.

Applying the limited scope of review under Section 11, the Court found no dispute regarding the existence of a valid arbitration clause.

Further, the Respondent expressly consented to the appointment of a sole arbitrator by the Court.

Since the parties were ad idem regarding reference of the disputes to arbitration, the Court found no impediment to making the appointment.

The arbitrator was required to furnish the disclosures under Section 12(2) of the Act within two weeks of entering upon the reference and was entitled to fees under the Fourth Schedule or such other mutually agreed fee.

The parties were directed to share the arbitrator’s fee and arbitral costs equally.

The Court preserved the parties’ right to raise all pleas, including objections to arbitrability and jurisdiction, before the arbitrator.

The petition was accordingly disposed of.