Prima facie evidence of an arbitration agreement warrants appointment; forgery objections requiring evidence belong to the tribunal.

The Applicant, as developer, relied on a Development Agreement dated 18 December 2024 allegedly executed by Respondent No.1 and her late husband, under which he was granted exclusive and irrevocable redevelopment rights in “Patkar House” and possession of the property.

The Agreement contained an arbitration clause.

After the death of Respondent No.1’s husband, Respondent No.1 executed a Gift Deed dated 4 February 2026 in favour of Respondent No.2.

The Applicant alleged that this deed and Respondent No.2’s subsequent interference affected his redevelopment rights.

By notice dated 15 June 2026, the Applicant invoked arbitration and nominated a former Bombay High Court Judge as sole arbitrator.

The Respondents disputed the execution and genuineness of the Development Agreement, alleging forgery and fabrication; Respondent No.2 additionally claimed independent rights in Shops Nos. 1 and 2 under an earlier Gift Deed dated 23 January 2024 and denied being a signatory to the Development Agreement.

The Applicant therefore sought appointment of an arbitrator under Section 11(6) read with Section 11(12)(a) of the Arbitration and Conciliation Act, 1996.

Whether there was sufficient prima facie material to establish the existence of an arbitration agreement between the Applicant and Respondent No.1 despite Respondent No.1’s allegations that the Development Agreement and its arbitration clause were forged or fabricated.

Whether the allegations concerning execution, signatures, capacity, genuineness, stamping and enforceability of the Development Agreement were required to be finally decided by the Court at the Section 11 stage or left to the Arbitral Tribunal under Section 16.

Whether Respondent No.2, a non-signatory claiming independent rights under an earlier Gift Deed, was bound by the arbitration agreement and could be compelled to arbitrate disputes concerning Shops Nos. 1 and 2.

Whether the failure of the Respondents to agree to the arbitrator nominated by the Applicant justified appointment of a sole arbitrator by the Court.

The Court applied Sections 11(6) and 11(12)(a) of the Arbitration and Conciliation Act, 1996, under which the Court may appoint an arbitrator when the agreed appointment mechanism fails, subject to a limited examination of the existence of an arbitration agreement.

Under Rajia Begum, 2026 SCC OnLine SC 135, consent is foundational to arbitration; where an arbitration agreement is alleged to be forged or fabricated, the Court must examine whether there is at least a prima facie basis to conclude that the party agreed to arbitrate, although a mere allegation of fraud does not automatically defeat reference.

Under Ajay Madhusudan Patel v. Ramesh Kumar (2025) 2 SCC 147, objections concerning existence or validity that depend upon evidence should ordinarily be left to the Arbitral Tribunal under Section 16, and the Section 11 inquiry should not become a mini-trial.

In relation to non-signatories, the Court relied on Cox & Kings Ltd. v. SAP India (P) Ltd. and Ajay Madhusudan Patel, holding that the referral court may undertake a prima facie inquiry, while complex questions regarding whether a non-signatory is bound by the arbitration agreement may be determined by the Tribunal under Section 16.

Objections concerning registration, stamping, title, and enforceability were treated as distinct from the prima facie existence of the arbitration agreement.

Respondent No.1’s denial of execution, the alleged incapacity and ill-health of her late husband, the alleged absence of signatures, and the status of the attesting witnesses raised serious factual questions, but their determination would require evidence and could not be finally undertaken under Section 11.

The Court found prima facie corroborative material beyond the disputed Development Agreement, particularly the registered Will dated 11 April 2025, which allegedly referred to the redevelopment arrangement, and the subsequent Gift Deed dated 4 February 2026, which allegedly referred to the Will and related transaction.

Consequently, the non-existence of the arbitration agreement was not so clear as to justify refusing reference.

Respondent No.2’s earlier Gift Deed and asserted ownership of Shops Nos. 1 and 2 raised questions concerning title, the effect of the earlier transfer, whether she claimed through or under the contracting parties, and whether she was a proper party to the arbitration.

Those issues were not conclusively decided at the referral stage and were left for consideration by the Arbitral Tribunal under Section 16.

Since the Respondents did not agree to the Applicant’s nominated arbitrator, the contractual appointment mechanism had failed, warranting Court intervention.

The arbitrator was permitted to consider objections concerning the existence, execution, genuineness, validity, enforceability and stamping of the Development Agreement and arbitration clause.

The question whether Respondent No.2, as a non-signatory, was bound by the arbitration agreement and whether claims against her were arbitrable was expressly left open, including the effect of the Gift Deed dated 23 January 2024 and her alleged rights in Shops Nos. 1 and 2.

The connected Section 9 proceeding was converted into an application under Section 17 for consideration by the Arbitral Tribunal.

The parties were directed to bear arbitral costs and fees equally in the first instance, subject to the final award on costs, and the request for stay of the judgment was rejected.