Scope of Section 11 Judicial Scrutiny is Confined Solely to Prima Facie Existence of Arbitration Agreement

The Petitioner filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to resolve disputes arising from an Appointment Letter dated 17.01.2021

Clause 17 of the said agreement provided for binding arbitration under the Rules of the Indian Council of Arbitration, with exclusive jurisdiction vested in the courts of Delhi

The parties reached a consensus (*ad idem*) during the proceedings that the matter, involving claims of approximately Rs. 1.5 Lakhs, should be referred to arbitration

Whether the court should exercise its jurisdiction under Section 11(6) of the Act to appoint an arbitrator when the parties are in agreement regarding the reference of disputes

What is the permissible scope of judicial scrutiny by a Referral Court at the pre-referral stage under Section 11

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

It relied extensively on the Supreme Court judgments in *SBI General Insurance Co. Ltd. v. Krish Spinning* (2024) and the seven-judge bench decision in *Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re*, which established that judicial intervention under Section 11 is confined to a *prima facie* examination of the existence of an arbitration agreement

These precedents legislatively overrule the "eye of the needle" or "accord and satisfaction" tests, favoring the principle of "competence-competence" under Section 16, which allows the Arbitral Tribunal to rule on its own jurisdiction

The Court observed that its role under Section 11 is "facilitative and procedural," intended to give effect to the parties' mutual intention to arbitrate when the agreed mechanism fails

Following the mandate in *Krish Spinning*, the Court refrained from conducting a "laborious enquiry" into the merits or the validity of the claims, noting that such determinations are reserved for the Arbitral Tribunal

Since both the Petitioner and the Respondent were *ad idem* (in agreement) that the disputes should be referred to arbitration and the existence of the arbitration clause was not in dispute, the Court found it unnecessary to delve into contentious factual issues

The Court held that all rights and contentions remain open for adjudication by the Arbitrator and directed the Arbitrator to file the requisite disclosure under Section 12(2) of the Act

The petition was disposed of with a directive to the Registry to communicate the order to the appointed arbitrator