Pendency of Section 8 application in civil court does not bar Section 11 petition for appointment of arbitrator.

The Petitioner (Tata Capital) and Respondents entered into a Loan-cum-Guarantee Agreement on November 28, 2023, which included an arbitration clause (Clause 12)

Following a dispute, the Petitioner invoked arbitration on May 19, 2025

The Respondents replied, denying they had physically signed the agreement

On July 15, 2025, the Petitioner filed the present Section 11 petition for the appointment of an arbitrator

Subsequently, on July 28, 2025, the Respondents filed a civil suit in Jammu seeking to declare the arbitration notice null and void

In response to the suit, the Petitioner filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference to arbitration

The Respondents opposed the Section 11 petition, arguing that the pendency of the Section 8 application before the Civil Court barred the present proceedings to avoid conflicting judgments

Whether the pendency of an application under Section 8 of the Act before a civil court bars or precludes the High Court from entertaining a petition under Section 11 for the appointment of an arbitrator.

Whether the Petitioner’s claim of the existence of an arbitration agreement was valid despite the Respondents' contention of lack of physical signatures.

Section 8(3) of the Arbitration and Conciliation Act, 1996, which explicitly provides that arbitration may be commenced or continued, and an award made, notwithstanding that an application under Section 8(1) is pending before a judicial authority

Supreme Court precedent in Vijay Kumar Sharma Alias Manju v. Raghunandan Sharma Alias Baburam and Ors. (2010) 2 SCC 486, which established that neither the filing of a suit nor a pending Section 8 application should obstruct or preclude a party from initiating Section 11 proceedings

Under Section 11, the court’s mandate is limited to a prima facie satisfaction regarding the existence of an arbitration agreement

The court rejected the Respondents' argument that the Section 11 petition must await the outcome of the Section 8 application in the Jammu Civil Court. Citing the non-obstante nature of Section 8(3) and the Vijay Kumar Sharma precedent, the court held that the legislature intended for arbitration proceedings to move forward independently of pending civil litigation

Regarding the Respondents' denial of the agreement's validity, the court observed that the Loan-cum-Guarantee Agreement was digitally signed, which satisfies the prima facie requirement of an existing arbitration agreement

The court distinguished the Respondents' reliance on JSW MG Motor India Pvt. Ltd. v. M/s. Tristar Auto Agencies, noting that in that case, a civil court had already rendered a finding that no arbitration agreement existed (triggering res judicata), whereas, in the present case, no such finding had been made by the Jammu court

The court found a prima facie arbitration agreement existed and referred the dispute to a sole arbitrator. Ms. Saumya Tandon, Advocate, was appointed as the arbitrator under the aegis of the Delhi International Arbitration Centre (DIAC), with a fixed fee of Rs. 3,00,000/-

All rights and contentions of the parties were left open for adjudication by the arbitrator