Scope of Section 11(6) Examination is Limited Solely 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 Loan Agreement dated 08.03.2025

The agreement contained arbitration clauses (Clauses 18–20) designating New Delhi as the seat and venue

The Petitioner served the mandatory statutory notice under Section 21 on 17.03.2026

Despite being duly served and the matter being listed for appearance, the Respondents failed to appear or file a reply

1. Whether the Court should appoint an arbitrator under Section 11(6) of the Act when the Respondents fail to participate despite due service

2. What is the scope and standard of judicial scrutiny by a Referral Court at the pre-referral stage under Section 11 of the Act

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

SBI General Insurance Co. Ltd. v. Krish Spinning, which clarified that judicial intervention under Section 11(6-A) is confined strictly to the examination of the "existence" of an arbitration agreement

Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, establishing that the Referral Court must only conduct a prima facie scrutiny and leave contested issues like "accord and satisfaction" or "ex facie frivolity" to the Arbitral Tribunal under the principle of competence-competence

The Court observed that the Petitioner fulfilled all statutory requirements, including the execution of a valid arbitration agreement and the issuance of a Section 21 notice

Applying the principles from Krish Spinning, the Court reasoned that its role is purely "facilitative and procedural," intended to give effect to the parties' original intent to arbitrate

The Court noted that since the standard of scrutiny is restricted to a prima facie existence of the agreement, and because the Respondents chose not to contest the proceedings, there was no legal impediment to the referral

It emphasized that delving into deep factual enquiries at this stage would violate the legislative intent of minimum judicial interference and expediency

The Court allowed the petition and appointed Ms. Devika Mohan, Advocate, as the Sole Arbitrator to adjudicate the disputes

It directed the arbitrator to be compensated as per the Fourth Schedule of the Act and to provide the mandatory Section 12(2) disclosure

All rights and contentions regarding claims and counter-claims were left open for the Tribunal’s determination