Existence of Arbitration Agreement and Section 21 Notice Suffice for Section 11 Appointment

The Respondent availed a top-up salaried personal loan of ₹7,18,000/- from Bajaj Finance Limited on 11.09.2018

Following defaults in repayment by the Respondent, Bajaj Finance assigned the loan and all rights under the agreement to the Petitioner via a Deed of Assignment dated 30.09.2024

Settlement attempts failed over alleged non-compliance by the Respondent

The Petitioner invoked the arbitration clause (Clause 10) on 11.06.2025

Despite the court issuing notice and granting multiple extensions to the Respondent—who claimed to be residing outside India and cited medical/professional reasons—the Respondent failed to file a reply or enter a formal appearance

1. Whether a prima facie arbitration agreement exists between the parties to warrant the appointment of a Sole Arbitrator under Section 11(6) of the Act

2. Whether the Petitioner, as an assignee of the original lender, is entitled to invoke the arbitration clause

The court primarily applied Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the court’s power to appoint an arbitrator when a party fails to act under an agreed procedure

It relied on the principle established in SBI General Insurance Co. Ltd. v. Krish Spinning, which mandates that the scope of judicial inquiry under Section 11 is strictly confined to examining the prima facie existence of an arbitration agreement

Furthermore, the court applied Section 21 of the Act regarding the commencement of arbitral proceedings via notice

The Court observed that Clause 10 of the loan agreement explicitly provided for dispute resolution through arbitration at the lender's discretion in Pune, New Delhi, or the state capital of the borrower

The Court found that the Petitioner successfully "stepped into the shoes" of the original lender through the Deed of Assignment, thereby inheriting the right to enforce the arbitration clause

Despite the Respondent’s informal communications via email seeking adjournments, the Court determined that the Respondent was well aware of the proceedings but had failed to formally contest the petition despite "ample opportunities"

Since the arbitration agreement was found to exist prima facie and the Section 21 notice was duly issued, the statutory requirements for court intervention were met

The Court appointed Mr. Kartikay Sharma, Advocate, as the Sole Arbitrator to adjudicate the dispute involving a claim of ₹9,60,466.18/-

The arbitration is to be conducted under the aegis of the Delhi International Arbitration Centre (DIAC). The Court clarified that all objections regarding arbitrability, jurisdiction, and limitation remain open for the Arbitrator to decide. The petition was disposed of accordingly