Existence of an arbitration agreement warrants appointment of an independent sole arbitrator under Section 11.

Tata Capital Ltd. filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (“A&C Act”) seeking appointment of an arbitrator to adjudicate disputes arising out of a Loan Agreement dated 29 June 2025.

Under the agreement, Puneet Gupta had borrowed ₹10,12,197 from the petitioner.

The agreement contained an arbitration clause, and Serial Nos. 8 and 9 of Annexure-1 identified Delhi as the place of arbitration and conferred jurisdiction on the courts at Delhi.

Following the respondent’s alleged failure to comply with the loan agreement, the petitioner issued a Loan Recall Notice on 18 January 2026, which went unanswered.

The petitioner thereafter issued a notice invoking arbitration on 11 February 2026; the notice also elicited no response.

Despite due service, the respondent did not appear before the Court.

Whether a valid arbitration agreement existed between the parties so as to justify appointment of an arbitrator under Section 11 of the A&C Act?

Whether the Court could appoint an independent sole arbitrator to adjudicate the disputes arising from the Loan Agreement?

Whether the respondent should be permitted to raise objections concerning arbitrability or jurisdiction before the arbitral tribunal?

The Court applied Section 11 of the A&C Act, under which the Court may appoint an arbitrator where the parties have agreed to arbitration and the appointment procedure has failed or has not been acted upon.

It relied on TRF Limited v. Energo Engineering Projects Ltd., (2017) 8 SCC 377, Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760, and Bharat Broadband Network Limited v. United Telecoms Limited, 2019 SCC OnLine SC 547, concerning the independence and impartiality of arbitral appointments and the invalidity of impermissible unilateral appointment mechanisms.

The Court also relied on SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532, and Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re, 2023 SCC OnLine SC 1666, in concluding that there was no legal impediment to constituting the arbitral tribunal in the circumstances of the case.

The tribunal remained competent to decide preliminary objections relating to arbitrability and jurisdiction.

The Court found that the Loan Agreement prima facie contained a valid arbitration agreement.

The petitioner had issued both a loan recall notice and a notice invoking arbitration, neither of which was answered by the respondent.

The contractual references to Delhi as the place of arbitration and the conferral of jurisdiction on Delhi courts supported the Court’s jurisdiction to entertain the Section 11 petition.

Applying the Supreme Court authorities concerning valid and independent arbitral appointments, the Court found no impediment to constituting the arbitral tribunal.

Since the respondent had not appeared despite service, the Court appointed an independent sole arbitrator while preserving the respondent’s right to raise jurisdictional or arbitrability objections before the tribunal.

The arbitration was directed to take place under the aegis of, and in accordance with, the Rules of the Delhi International Arbitration Centre (DIAC).

The respondent was expressly permitted to raise preliminary objections regarding arbitrability or jurisdiction before the arbitrator.

All rights and contentions concerning claims and counterclaims were kept open, and the petition was disposed of accordingly.