Judicial scrutiny under Section 11(6) is confined to the examination of the existence of an arbitration agreement.

The Petitioner approached the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator based on Clause 12 of an "Agreement of Sell" dated 18.08.2018.

The Petitioner had previously invoked the arbitration clause via a statutory notice dated 02.04.2025.

The Respondent opposed the petition, contending that no cause of action existed as no amounts were due and that the claims were barred by limitation.

1. Whether the Court, at the stage of Section 11, should adjudicate preliminary objections regarding limitation and the existence of a cause of action.

2. Whether the Court should appoint an arbitrator given the limited scope of judicial scrutiny under Section 11(6) of the Act.

Section 11(6) of the Arbitration and Conciliation Act, 1996, which governs the appointment of arbitrators.

The principle established in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), integrating the seven-judge bench ruling in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, that judicial interference under Section 11 is confined strictly to a prima facie examination of the existence of an arbitration agreement.

Matters of "accord and satisfaction" or limitation are mixed questions of law and fact to be determined by the Arbitral Tribunal under the principle of competence-competence.

The Court observed that while the Respondent raised objections regarding limitation and the lack of outstanding dues, the legislative intent of Section 11(6-A) limits the Court’s role to verifying the formal existence of the arbitration agreement.

Referencing Krish Spinning, the Court noted that tests such as "eye of the needle" or "ex facie meritless" are no longer the standard, as they infringe upon arbitral autonomy.

The Court reasoned that the Arbitral Tribunal is better equipped to handle "laborious enquiries" and "frivolous disputes" through evidentiary appreciation.

Since a written agreement existed and the Section 21 notice was served, the Court held that the referral must be made, leaving all substantive objections to be decided by the arbitrator.

It held that all rights and contentions of the parties, including objections regarding limitation and cause of action, remain open to be adjudicated by the learned Arbitrator.

The court directed the arbitrator to file a disclosure under Section 12(2) and fixed the fee structure in accordance with the Fourth Schedule of the Act.