Referral Court's Scrutiny Under Section 11 is Confined Exclusively to Prima Facie Existence of Arbitration Agreement

The Petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to resolve disputes arising from a License Agreement dated 22.05.2024 and an Addendum dated 10.02.2025.

The Petitioner issued a statutory notice under Section 21 of the Act on 24.11.2025.

The Respondent contested the maintainability of the petition on the grounds that a further agreement had been entered into between the parties.

The court previously noted that the Respondent’s reply dated 22.12.2025 to the Section 21 notice did not dispute the existence of the arbitration clause.

Despite being granted time, the Respondent’s counsel failed to provide further instructions.

1. Whether the Court should appoint a Sole Arbitrator under Section 11(6) when the existence of the arbitration agreement is not disputed but maintainability is challenged based on subsequent agreements.

2. Whether the scope of judicial scrutiny under Section 11 is limited to a prima facie examination of the existence of the arbitration agreement.

The court applied Section 11(6) and Section 11(6-A) of the Arbitration and Conciliation Act, 1996, emphasizing that judicial interference is confined to examining the existence of the arbitration agreement.

It relied on the Supreme Court’s three-judge bench decision in SBI General Insurance Co. Ltd. v. Krish Spg. (2024), which integrated the seven-judge bench ruling in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re.

These precedents established that the "Referral Court" must adopt a "facilitative" role, leaving contested facts, "accord and satisfaction," and issues of "ex facie frivolity" to the Arbitral Tribunal under the principle of competence-competence.

The Court observed that the Respondent did not dispute the existence of the arbitration clause in their initial response to the Section 21 notice.

Applying the standard set in Krish Spg., the Court held that its jurisdiction under Section 11 is limited to a prima facie determination of the existence of the agreement and does not extend to a "laborious enquiry" into the merits or subsequent agreements, which are matters for the Arbitral Tribunal to decide under Section 16.

The Court reasoned that referring the matter ensures arbitral autonomy and minimizes judicial interference at the nascent stage.

Given the lack of instructions from the Respondent and the undisputed existence of Clause "G," there was no legal impediment to referring the dispute.

The Court held that since the existence of the arbitration agreement was prima facie established, all other contentions regarding maintainability and merits are to be decided by the Arbitrator.

The Arbitrator’s fee shall be governed by the Fourth Schedule of the Act, and the mandatory disclosure under Section 12(2) must be filed within one week.