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

The Petitioner sought the appointment of a Sole Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, arising from a Distributor Agreement dated 28.03.2017

Clause 27 of the Agreement provided for dispute resolution via mutual discussion, followed by a mutually appointed Sole Arbitrator or a three-member Arbitral Tribunal

The Petitioner invoked arbitration via a Section 21 notice on 06.03.2025, which the Respondent resisted on 04.04.2025

The Respondent opposed the petition on the grounds of limitation and the existence of a "No Objection Certificate," claiming no arbitrable dispute remained

1. Whether the Court, under Section 11, should adjudicate on preliminary objections regarding limitation and "accord and satisfaction" (No Objection Certificate) or refer them to the Arbitral Tribunal.

2. Whether the Petitioner satisfied the requirements for the appointment of an arbitrator under the Act.

The Court primarily applied Section 11(6) and 11(6-A) of the Arbitration and Conciliation Act, 1996, which limits judicial scrutiny to the existence of an arbitration agreement

It relied on the Supreme Court’s Seven-Judge Bench decision in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re and the Three-Judge Bench decision in SBI General Insurance Co. Ltd. v. Krish Spinning, which established that the Referral Court must only perform a prima facie examination of the agreement's existence

The court underscored the principle of "competence-competence" under Section 16, which mandates that issues of "accord and satisfaction" or "ex-facie meritless" claims are within the exclusive domain of the Arbitral Tribunal

The Court reasoned that the standard of scrutiny under Section 11 is confined strictly to the existence of the arbitration agreement and does not involve a "laborious enquiry" into contested facts

Applying Krish Spinning, the Court held that objections regarding "accord and satisfaction" (such as the Respondent's claim regarding the NOC) are mixed questions of law and fact that must be decided by the Arbitrator to uphold arbitral autonomy

The Court found that since the arbitration clause existed in the Agreement and the Section 21 notice was served, the statutory requirements were met

By appointing an arbitrator while allowing the Respondent to raise maintainability objections before the tribunal, the Court ensured the legislative intent of minimal judicial interference was maintained

It appointed Ms. Chandrika Gupta as the Sole Arbitrator

The Court clarified that all rights and contentions, including preliminary objections regarding limitation and maintainability, are left open for the Arbitrator to decide on their merits

The parties were directed to share the arbitral costs and fees in accordance with the Fourth Schedule of the Act