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

The Petitioner had been appointed as a distributor of Indian Oil Corporation Limited under a Memorandum of Agreement dated 13 November 1996.

The Petitioner challenged the termination of that Agreement and sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”).

The Agreement contained an arbitration clause, Clause 37, providing for reference of disputes to arbitration.

The Respondents opposed the petition, principally on the ground of limitation.

Whether the Court, while exercising jurisdiction under Section 11 of the Act, was required to examine the Respondents’ objection that the claims were barred by limitation?

Whether a valid arbitration agreement existed between the parties so as to justify the appointment of a sole arbitrator?

The Court applied Section 11 of the Arbitration and Conciliation Act, 1996, under which the Court’s enquiry at the stage of appointment of an arbitrator is confined to examining the prima facie existence of a valid arbitration agreement.

The Court relied upon Clause 37 of the Agreement, which provided for arbitration of disputes arising out of or relating to the Agreement.

Questions concerning limitation, arbitrability, jurisdiction, and the merits of claims or counterclaims were left open for determination by the arbitral tribunal.

The Court found that there was no dispute regarding the existence of a valid arbitration clause in Clause 37 of the Agreement.

Since the Section 11 enquiry is limited to the prima facie existence of an arbitration agreement, the Respondents’ limitation objection did not constitute an impediment to appointment of an arbitrator at this stage.

The Court accordingly appointed an independent sole arbitrator, while expressly preserving the Respondents’ right to raise objections concerning limitation, arbitrability, and jurisdiction before the tribunal.

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 required to furnish the statutory disclosures under Section 12(2) of the Act.

The Respondents remained at liberty to raise objections regarding arbitrability, jurisdiction, and limitation before the arbitrator, who was directed to decide them in accordance with law.

The petition and pending application were disposed of accordingly.