At the Section 11 stage, the court need only prima facie establish an arbitration agreement.

The petitioner filed a petition under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 (“Act”) seeking appointment of a sole arbitrator.

The parties’ Franchise Agreement contained an arbitration clause providing for reference of disputes to a sole arbitrator, with New Delhi as the place of arbitration and Delhi courts having jurisdiction.

Notice of the petition was duly served on the respondents, but they neither filed a reply nor appeared despite being given an opportunity to do so.

The petitioner relied on the arbitration clause and proof of service to seek constitution of the arbitral tribunal.

Whether the Court should appoint a sole arbitrator under Sections 11(5) and 11(6) of the Act when the respondents, despite due service, failed to appear or file a reply.

Whether a prima facie arbitration agreement existed between the parties so as to justify appointment of an arbitrator.

Whether the petitioner’s disputes should be referred to arbitration notwithstanding the contractual provision that the sole arbitrator would be appointed by the Master Franchisee.

The Court applied Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996, which empower the Court to appoint an arbitrator where the agreed appointment procedure has not resulted in constitution of the tribunal.

The Court reiterated that, at the stage of exercising jurisdiction under Section 11, its enquiry is confined to examining the prima facie existence of an arbitration agreement, relying on SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754.

The Court also gave effect to the arbitration clause in Clause 19 of the Franchise Agreement, which covered disputes arising out of or relating to the agreement and provided for arbitration by a sole arbitrator at New Delhi.

The Franchise Agreement expressly contained a broad arbitration clause covering disputes relating to its performance, breach, termination, invalidity and interpretation.

Since the respondents were duly served but failed to participate in the proceedings or contest the petition, there was no opposition to the petitioner’s request for appointment.

Applying the limited Section 11 standard, the Court found a prima facie arbitration agreement and no impediment to appointing a sole arbitrator.

The Court appointed an independent arbitrator and preserved the respondents’ right to raise objections regarding arbitrability and jurisdiction before the tribunal.

He was directed to enter upon the reference within three weeks and furnish the disclosures required under Section 12(2) of the Act within three weeks of entering reference.

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

The parties were left free to raise all pleas, including objections concerning arbitrability and jurisdiction, before the arbitrator.

The petition was accordingly disposed of.