Scope of judicial scrutiny under Section 11 is limited to prima facie existence of arbitration agreement.

The Petitioner, M/S Elan Fashion, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator.

The dispute arose from two Tax Invoices (dated 19.12.2023 and 28.12.2023) issued to the Respondent, M/S Vinayak Embroidery, for unpaid amounts.

The invoices contained a "Declaration" clause stating that defaults in payment would be referred to arbitration in Delhi.

The Petitioner invoked arbitration via a Section 21 notice on 27.12.2024, which the Respondent failed to acknowledge.

Despite being served notice of the court proceedings via courier and WhatsApp, the Respondent failed to appear.

1. Whether a Sole Arbitrator should be appointed under Section 11(6) of the Act given the existence of an arbitration clause in the tax invoices and the Respondent's failure to join the appointment process.

2. What is the permissible scope of judicial scrutiny by a Referral Court at the stage of Section 11 of the Arbitration and Conciliation Act.

The court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the court's power to appoint arbitrators.

SBI General Insurance Co. Ltd. v. Krish Spinning (2024) 12 SCC 1, which incorporated the seven-judge bench ruling in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re (2024) 6 SCC 1.

Judicial intervention under Section 11 is confined strictly to a prima facie examination of the "existence" of an arbitration agreement, leaving issues of "validity," "accord and satisfaction," or "frivolity" to the Arbitral Tribunal under the principle of competence-competence.

The court observed that its jurisdiction is "extremely circumscribed" and "facilitative" rather than adjudicatory.

Following the Krish Spinning mandate, the court limited its inquiry to the prima facie existence of the arbitration agreement found in the "Declaration" on the Tax Invoices.

The court found that the Petitioner had successfully complied with the statutory requirement of the Section 21 notice.

Since the arbitration clause existed and the Respondent remained ex-parte despite due service, the court determined there was no legal impediment to appointing an arbitrator.

The court emphasized that all contested factual and legal issues, including the merits of the claims, are reserved for the arbitrator's determination.

The court allowed the petition and appointed Ms. Ananya Sikri, Advocate, as the Sole Arbitrator to adjudicate the disputes under the aegis of the Delhi International Arbitration Centre (DIAC).

The Arbitrator was directed to provide statutory disclosures under Section 12(2) and fees would be governed by the DIAC schedule.

The petition was disposed of with all rights and contentions of the parties kept open for the arbitral proceedings.