Scope of Section 11 Inquiry Confined to Prima Facie Existence of Valid Arbitration Agreement

The Petitioner, a transportation service provider, entered into a contract with the Respondent in April 2016 for hiring buses and M.U.V.s for ticket checking raids

The contract was valid until December 31, 2017

Following the expiry of the contract, disputes arose regarding the Respondent’s alleged failure to pay outstanding bills and refund the Earnest Money Deposit, Security Deposit, and Performance Guarantee, totaling approximately Rs. 4,66,421/-

The Petitioner invoked the arbitration agreement under Clause 42 of the contract via notice dated June 25, 2024

The Petitioner subsequently approached the High Court seeking the appointment of a Sole Arbitrator

1. Whether a Sole Arbitrator should be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996, to adjudicate the disputes arising from the 2016 Contract Agreement

The court applied Section 11(6) of the Arbitration and Conciliation Act, 1996, which governs the appointment of arbitrators by the Court

It relied on the principle established in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), holding that the judicial scope of enquiry under Section 11 is strictly confined to examining the prima facie existence of an arbitration agreement

Furthermore, the court adhered to Section 12(2) regarding the mandatory disclosures required of an arbitrator

The Court observed that the existence of a valid arbitration clause (Clause 42) within the Contract Agreement was undisputed by the parties

During the proceedings, the Respondent’s counsel expressly stated they had no objection to the appointment of a Sole Arbitrator

Given that the parties were ad idem (in agreement) regarding the reference of disputes to arbitration and the court's limited role at this stage was merely to verify the existence of the agreement, the Court found no legal impediment to granting the relief sought

The Court directed that the arbitration be conducted under the aegis of the Delhi International Arbitration Centre (DIAC) to ensure procedural regularity and standardized fees

The arbitrator is directed to enter the reference within two weeks and provide necessary disclosures under Section 12(2). The arbitration shall be conducted per DIAC rules. All pleas, including those regarding jurisdiction and arbitrability, are left open for the arbitrator to decide independently. The petition was disposed of accordingly