Referral Court’s Section 11 jurisdiction is limited to prima facie examination of arbitration agreement existence.

The Petitioner sought the appointment of a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, based on a 2015 Hypothecation/Loan Agreement.

In a previous round of litigation, an arbitral award dated 10.07.2019 was set aside due to the unilateral appointment of the arbitrator.

The Delhi High Court Division Bench subsequently granted the Petitioner liberty to take steps for appointment in accordance with law.

When the Petitioner filed a second Section 11 petition (ARB.P 1862/2024) without a fresh Section 21 notice, the Court disposed of it on 01.04.2025, directing the Petitioner to first invoke arbitration under Section 21.

Following this, the Petitioner issued a Section 21 notice on 06.05.2025.

The Respondents contested the present petition, alleging that the invocation was invalid, the original notice was never received, and the claims were barred by limitation as the cause of action arose in 2017.

Whether the Court, in a Section 11 petition, should adjudicate on the validity of the invocation and the bar of limitation when the existence of the arbitration agreement is not in dispute.

Whether the scope of judicial inquiry under Section 11(6) is limited to the prima facie existence of the arbitration agreement.

The court primarily applied Section 11(6) and 11(6-A) of the Arbitration and Conciliation Act, 1996.

It relied heavily on the precedent of the three-judge bench in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), which incorporated the seven-judge bench ruling in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re.

These cases established that the Referral Court's mandate is strictly confined to a "prima facie examination of the existence of the arbitration agreement".

The "competence-competence" principle under Section 16 ensures that issues of "accord and satisfaction," limitation, or mixed questions of law and fact are reserved for the Arbitral Tribunal.

The Court observed that the Respondents' objections regarding the validity of the Section 21 notice and the bar of limitation were fresh contentions not raised in earlier proceedings.

Applying the standard set in Krish Spinning, the Court reasoned that its role is purely facilitative and procedural.

It noted that delving into "contested or laborious inquiry" regarding limitation or the merits of the dispute would infringe upon the jurisdictional competence of the Arbitral Tribunal.

The Court found that since the existence of the arbitration clause (Clause 20) was evident and the Section 21 notice had been issued as per the Court's previous directions, the "limited scope of examination" under Section 11 was satisfied.

Any further adjudication on whether the claims are "ex facie barred" was deemed a matter for the arbitrator to "rule" upon under Section 16.

It appointed Hon’ble Ms. Justice Shailender Kaur as the Sole Arbitrator.

The Court directed that all rights and contentions, including those regarding the merits and limitation, remain open for adjudication by the arbitrator.

The parties were directed to share costs equally and the arbitrator was required to file disclosures under Section 12.