Judicial Scrutiny Under Section 11 is Confined to Prima Facie Examination of Arbitration Agreement's Existence

The Petitioner (Oyo Hotels) and the Respondent entered into a Management Service Agreement on 10.06.2024

In response to a Section 21 invocation notice dated 16.01.2026, the Respondent contested the appointment of a Sole Arbitrator and the seat of arbitration (New Delhi) via email

Despite being served with the petition via courier, Speed Post, and email, the Respondent failed to appear before the High Court

The Petitioner sought the appointment of a Sole Arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996, to adjudicate disputes valued at approximately Rs. 1.5 crores

1. Whether the Court should appoint a Sole Arbitrator under Section 11 when a party contests the seat and appointment procedure despite an express contractual agreement?

2. What is the scope of judicial scrutiny by a Referral Court at the stage of a Section 11 application?

Section 11(6) and 11(6-A) of the Arbitration and Conciliation Act, 1996, which limits judicial intervention to the examination of the existence of an arbitration agreement

SBI General Insurance Co. Ltd. v. Krish Spinning (2024), which clarified that the Referral Court must only conduct a prima facie scrutiny of the agreement’s existence and leave contested facts—such as "accord and satisfaction" or "ex facie meritless" claims—to the Arbitral Tribunal

The Seven-Judge Bench decision in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, which emphasizes arbitral autonomy and minimal judicial interference

The Court observed that Article 8.1 of the Agreement explicitly provided for a sole arbitrator with the seat of arbitration in New Delhi

Applying the "facilitative and procedural" standard established in Krish Spinning, the Court determined that its role was confined to verifying the existence of the arbitration clause and ensuring statutory compliance under Section 21

The Court found that the Respondent's objections regarding the seat and the DIAC's appointment procedure ran contrary to the express terms of the contract

Since the arbitration agreement's existence was undisputed and the Section 21 notice was duly served, the Court held that any substantive objections or contested facts must be "ruled" upon by the Arbitrator under Section 16, rather than being litigated at the referral stage

The Court held that the Respondent is at liberty to raise all legal objections before the Arbitrator

The Arbitrator was directed to file a disclosure under Section 12(2) within one week of the reference

The petition was disposed of with the clarification that the Court expressed no opinion on the merits of the underlying controversy