Delhi HC Appoints Sole Arbitrator In Moneywise–UP Money Dispute After Respondents Fail To Appear Despite Service

In brief

The question

1. Whether a valid arbitration agreement existed between the parties to warrant appointment of a sole arbitrator under Section 11 of the Act.

The court held

The Court allowed the appointment request and appointed Ms. Neeru Vaid, Advocate-on-Record, as sole arbitrator to adjudicate the parties’ disputes.

It also directed

The arbitration is to be conducted under the aegis of the Delhi International Arbitration Centre, with the arbitrator’s fees governed by its schedule; the arbitrator must provide the requisite disclosure under Section 12(2) of the Act.

The petition was disposed of accordingly.

01Facts

Moneywise Financial Services Pvt. Ltd. filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator in a dispute arising under a loan agreement containing an arbitration clause.

pp. 8–9

Although notice was duly served and the respondents were directed to file a reply, they neither appeared nor filed one.

p. 1

The clause provided for arbitration by a mutually appointed sole arbitrator, failing which appointment would be made in accordance with the Act; it specified Delhi as the seat and English as the language.

p. 8

02Issues

i.1. Whether a valid arbitration agreement existed between the parties to warrant appointment of a sole arbitrator under Section 11 of the Act.

pp. 8–9

ii.2. Whether the Court could proceed with the appointment despite the respondents’ non-appearance and failure to file a reply after due service.

p. 1

03Law Applied

Section 11 of the Arbitration and Conciliation Act, 1996, confines the Court’s enquiry to examining the prima facie existence of an arbitration agreement.

p. 9

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

p. 9

The arbitration clause in the parties’ agreement provided for reference of disputes to a sole arbitrator and for appointment under the Act if the parties could not agree.

p. 8

Provisions in the judgment · 2 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 11 Section 12

04Reasoning

The Court noted that the respondents had been duly served but had not appeared or filed a reply, and therefore proceeded to consider the petition.

p. 1

Applying the limited Section 11 enquiry, it found that a valid and binding arbitration agreement existed and that the clause provided a basis for appointment of a sole arbitrator.

pp. 8–9

The Court made clear that the parties could raise objections, including as to arbitrability and jurisdiction, before the arbitrator, and that its observations were confined to the Section 11 petition.

p. 10