Once a valid arbitration agreement exists, arbitrability and entitlement objections fall to the arbitral tribunal.

The petitioners, former employees of M/s IOC Phinergy Private Limited, filed petitions under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a Sole Arbitrator under the arbitration clauses contained in their respective employment agreements.

Their claims concerned unpaid employment-related dues, including performance-linked incentive/variable pay, annual increments, and other consequential amounts, with the amounts varying across the petitions.

The Respondent opposed the petitions, contending that the petitioners’ termination was valid, performance-linked incentive/variable pay and annual increments were discretionary and neither vested nor guaranteed contractual entitlements, and that all contractual obligations had been discharged.

The existence and validity of the arbitration agreements were, however, undisputed.

Whether the existence of valid arbitration agreements justified appointment of a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Whether the Respondent’s objections concerning entitlement to variable pay, annual increments, termination, discharge of contractual obligations, and arbitrability should be adjudicated by the Court at the Section 11 stage or left for determination by the Arbitral Tribunal.

The Court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, which empowers the Court to appoint an arbitrator where the agreed appointment procedure has failed.

The governing principle applied was that, at the Section 11 stage, the Court’s enquiry is confined to examining the prima facie existence of a valid arbitration agreement.

Questions concerning the merits of the claims, the existence of amounts due, contractual entitlement, and the arbitrability of the disputes are ordinarily matters for the Arbitral Tribunal.

The appointed arbitrator was also required to furnish disclosures under Section 12(2) of the Act.

The Court found that the arbitration clauses in the respective employment agreements were valid and undisputed, and that the petitioners’ claims arose out of or in connection with those agreements.

The Respondent’s objections did not challenge the existence of the arbitration agreements; instead, they disputed the petitioners’ substantive entitlement and the arbitrability of their claims.

Applying the limited scope of review under Section 11, the Court held that it was not required to determine whether variable pay or annual increments were contractually payable, whether the terminations were valid, whether any amount remained due, or whether the disputes were ultimately arbitrable.

Those issues were left open for determination by the Arbitral Tribunal in accordance with law.

Mr. Pradeep Kumar, Advocate, was appointed as the Sole Arbitrator to adjudicate the disputes between the parties.

The appointment was subject to the arbitrator furnishing the disclosures required under Section 12(2) within three weeks of entering reference.

The arbitration was directed to be conducted under the rules and aegis of the Delhi International Arbitration Centre, with fees payable as per the DIAC Schedule of Fees.

The parties remained free to raise all objections, including those concerning jurisdiction and arbitrability, before the Tribunal, and the petitions were disposed of accordingly.