Judicial scrutiny under Section 11 is limited to the prima facie existence of an arbitration agreement.

The Petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”), seeking the appointment of a Sole Arbitrator to resolve disputes arising from Work Order No. BECIL/Event Management/Expression/2022-23 dated 27.03.2023

Clause 9 of the said agreement contained an arbitration clause stipulating that disputes be referred to a sole arbitrator appointed by the competent authority of the Respondent (BECIL)

The Petitioner invoked arbitration via a Section 21 notice dated 18.08.2025

The Respondent expressed no objection to the appointment of a Sole Arbitrator during the proceedings

1. Whether the Court should exercise its power under Section 11 of the Act to appoint a Sole Arbitrator in light of the limited scope of judicial scrutiny at the referral stage

The court primarily applied Section 11(6) and Section 11(6-A) of the Arbitration and Conciliation Act, 1996, which limits the court's role to the examination of the existence of an arbitration agreement

It relied heavily on the three-judge bench decision in SBI General Insurance Co. Ltd. v. Krish Spinning (2024) 12 SCC 1, which incorporated the findings of the seven-judge bench in In re: Interplay Between Arbitration Agreements under Arbitration Act, 1996 Stamp Act, 1899 (2024) 6 SCC 1

These precedents establish that the referral court must only perform a prima facie scrutiny of the agreement’s existence, leaving contested issues of fact, law, or "accord and satisfaction" to the Arbitral Tribunal under the principle of competence-competence

The Court observed that under the prevailing legal position, judicial intervention at the Section 11 stage is facilitative and procedural rather than adjudicatory

Citing Krish Spinning, the Court noted that Section 11(6-A) legislatively overruled previous standards that allowed courts to weed out "frivolous" disputes; instead, the court is now confined to a prima facie examination of the formal validity and existence of the written agreement

The Court emphasized that even complex questions like "accord and satisfaction" are within the exclusive domain of the Arbitral Tribunal

In the present case, since the existence of the arbitration clause was not in dispute and the Respondent consented to the appointment, the Court found it apposite to give effect to the parties' mutual intention to arbitrate without delving into the merits of the claims

The Court directed that the arbitration be conducted under the aegis of the Delhi International Arbitration Centre (DIAC), with fees governed by the DIAC Schedule of Fees

The Arbitrator was directed to file a disclosure under Section 12(2), and the parties were ordered to share costs equally

The Court clarified that all rights and contentions on merits remain open for the Arbitrator’s determination