Court’s Section 11 Jurisdiction is Confined to Prima Facie Examination of Arbitration Agreement’s Existence

The Petitioner, M/S Moneywise Financial Services Pvt Ltd, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator pursuant to Clause 10.1 of a Loan Agreement dated 02.11.2019

The Petitioner invoked arbitration via notice on 07.08.2025

Despite the Court recording that service was duly effected upon the Respondents on 13.03.2026, the Respondents failed to enter an appearance or file a reply

1. Whether the Court should appoint a Sole Arbitrator under Section 11 of the Act given the non-appearance of the Respondents and the existence of an arbitration clause

2. Whether the scope of judicial scrutiny under Section 11 is limited to a prima facie examination of the existence of the arbitration agreement

Section 11(6) of the Arbitration and Conciliation Act, 1996, concerning the appointment of arbitrators

The precedent set by the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), which streamlined the "competence-competence" principle and confined judicial intervention under Section 11 to the examination of the existence of the arbitration agreement only

Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re (2024) to emphasize that the Referral Court must not conduct a "laborious enquiry" into contested facts like "accord and satisfaction," leaving such determinations to the Arbitral Tribunal under Section 16

The Court observed that the statutory requirements under Section 21 for the invocation of arbitration were complied with by the Petitioner

Since the Respondents did not contest the petition despite service, the Court found no impediment to referring the matter to arbitration

Applying the Krish Spinning standard, the Court reasoned that its role is strictly "facilitative and procedural"

It held that the "eye of the needle" and "ex facie meritless" tests have been superseded by a preference for arbitral autonomy; therefore, any substantive disputes or contentions regarding the merits must be reserved for the Arbitrator

The Court confirmed the prima facie existence of a valid arbitration agreement in Clause 10.1 of the Loan Agreement to satisfy the Section 11(6-A) threshold

The Court allowed the petition and appointed Mr. Sandeep Pandey, Advocate, as the Sole Arbitrator to adjudicate the disputes

It directed the Arbitrator to provide disclosures under Section 12(2), fixed fees as per the Fourth Schedule, and ordered the parties to share costs equally

All rights and contentions on merits were left open for the Arbitrator's decision