Referral court's Section 11 jurisdiction is confined to prima facie examination of arbitration agreement existence.

The Petitioner, Hero Fincorp Limited, filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim measures against the Respondents, including the attachment of bank accounts and the furnishing of alternate security for an amount of ₹3,74,32,640.33

The Respondents admitted their liability subject to a reconciliation of accounts but failed to reach a settlement regarding a payment proposal

During the proceedings, both parties agreed (ad idem) to waive the Section 21 notice requirements and the need for a Section 11 petition, requesting the Court to appoint a Sole Arbitrator to resolve the disputes under the aegis of the Delhi International Arbitration Centre (DIAC)

1. Whether a Sole Arbitrator can be appointed by the Court in a Section 9 petition when parties mutually consent to arbitration and waive statutory procedural requirements under Sections 21 and 11

2. What is the standard of judicial scrutiny required at the stage of referring a matter to arbitration under the Act

The Court primarily applied Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures, and Section 11(6) regarding the appointment of arbitrators

It relied heavily on the precedent established by the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), which clarified that judicial interference under Section 11 is confined to a prima facie examination of the existence of an arbitration agreement

The Court also referenced Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re (2024), emphasizing the principle of arbitral autonomy and the "negative effect" of competence-competence, which reserves complex factual disputes for the Arbitral Tribunal

The Court observed that since the Facility Agreement dated 17.01.2025 contained a valid arbitration clause (Clause 20.1) and the parties had reached a consensus to arbitrate, the Court’s role was limited to facilitating the appointment

Following the mandate in Krish Spinning, the Court avoided adjudicating on the "accord and satisfaction" or the merits of the financial claims, noting that such "laborious enquiry" is the exclusive domain of the Arbitral Tribunal

By treating the Section 9 petition as an application under Section 17 for the Arbitrator’s future consideration, the Court upheld the legislative intent of minimal judicial interference while ensuring the Petitioner’s request for interim protection remained viable for the Tribunal to decide

It held that the Section 9 petition shall be treated as an application under Section 17 to be decided by the learned Arbitrator upon entering the reference

The Registry was directed to notify the Arbitrator, and the parties were granted liberty to raise all objections, including jurisdictional ones, before the Tribunal

The petition and pending applications were disposed of accordingly