At the Section 11 stage, the court need only prima facie verify the arbitration agreement’s existence.

The petitioner, Triveni Pattern Glass Ltd., filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator under Article 24 of the Business Transfer Agreement dated 29 March 2019, read with Clause 15 of the Tripartite Assignment Agreement dated 8 May 2019.

The agreements provided for reference of unresolved disputes to a sole arbitrator, with New Delhi as the seat/place of arbitration.

The petitioner asserted claims amounting to Rs. 4,36,03,064/-.

Respondent No. 2 objected that he was not a party to either agreement and was therefore not a necessary party.

The parties were agreed regarding reference of disputes to arbitration insofar as Respondents Nos. 1 and 3 were concerned.

Whether the petition disclosed the prima facie existence of a valid arbitration agreement between the petitioner and Respondents Nos. 1 and 3 so as to warrant appointment of a sole arbitrator under Section 11(6) of the Act?

Whether Respondent No. 2, who claimed not to be a party to the relevant agreements, was required to be treated as a necessary party to the Section 11 proceedings?

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.

It reiterated that, at the Section 11 stage, the scope of judicial enquiry is confined to examining the prima facie existence of an arbitration agreement.

Article 24 of the Business Transfer Agreement and Clause 15 of the Tripartite Assignment Agreement required unresolved disputes arising under the agreements to be referred to arbitration before a sole arbitrator, with New Delhi as the seat/place of arbitration.

The Court also directed compliance with the disclosure requirement under Section 12(2) of the Act and preserved the parties’ right to raise objections concerning arbitrability and jurisdiction before the arbitral tribunal.

The Court found no dispute regarding the existence of the arbitration agreement between the petitioner and Respondents Nos. 1 and 3, and noted that the parties were ad idem on referring their disputes to arbitration.

Applying the limited prima facie review applicable under Section 11, the Court held that there was no impediment to appointing a sole arbitrator pursuant to the contractual arbitration clauses.

The objection of Respondent No. 2 was not finally adjudicated at this stage; instead, the Court permitted the petitioner to seek his impleadment before the appointed arbitrator.

All questions concerning arbitrability, jurisdiction, and the merits were left open for determination by the arbitral tribunal.

The arbitrator was directed to enter upon the reference within two weeks and furnish the disclosures required under Section 12(2) of the Act.

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.

The parties were permitted to raise all objections, including those relating to arbitrability and jurisdiction, before the arbitrator, and the petitioner was given liberty to move an impleadment application concerning Respondent No. 2 before the arbitral tribunal.