Judicial scrutiny under Section 11 is limited to a prima facie examination of the arbitration agreement's existence.

The Petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("the Act"), seeking the appointment of a Sole Arbitrator to adjudicate disputes arising from a Business Development Agreement dated 01.03.2025.

Clauses 17.1 and 17.2 of the Agreement provided for amicable settlement and, failing which, resolution by a sole arbitrator seated in Delhi.

The Petitioner invoked the arbitration clause via a legal notice dated 18.11.2025.

The dispute involves claims and counter-claims aggregating to approximately ₹8.5 crores and ₹8 crores, respectively.

During the proceedings, both parties consented to the appointment of a sole arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC).

1. Whether the scope of judicial scrutiny under Section 11(6) of the Act is limited to the prima facie examination of the existence of an arbitration agreement.

2. Whether a Sole Arbitrator should be appointed to resolve the disputes inter se the parties under the aegis of DIAC.

Section 11(6) of the Arbitration and Conciliation Act, 1996, which empowers the Court to appoint an arbitrator when the agreed procedure fails.

Three-judge bench decision in SBI General Insurance Co. Ltd. v. Krish Spinning (2024).

Seven-judge bench ruling in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re.

These precedents establish that judicial intervention at the Section 11 stage is confined strictly to the prima facie existence of an arbitration agreement and formal validity (e.g., being in writing), leaving issues such as "accord and satisfaction" or "frivolity" to the Arbitral Tribunal under the principle of competence-competence.

The Court observed that its role under Section 11(6) is facilitative and procedural, intended to give effect to the parties' mutual intention to arbitrate.

Referring to Krish Spinning, the Court noted that it must not embark upon a contested or laborious enquiry into the merits or arbitrability of the dispute, as such functions are reserved for the Arbitral Tribunal under Section 16.

The Court highlighted that the "eye of the needle" or "ex facie meritless" tests have been superseded by a standard of minimal judicial interference to uphold arbitral autonomy.

Since the material on record established the existence of an arbitration clause within the Business Development Agreement and the parties reached a consensus on the forum (DIAC), the Court found no impediment to the appointment.

The Court directed that the arbitration be conducted under the aegis of DIAC in accordance with its rules and fee schedule.

The arbitrator was requested to furnish disclosure under Section 12(2) of the Act within one week.

All rights and contentions regarding the merits of the claims were left open for the Arbitral Tribunal’s determination.