Scope of Section 11 Scrutiny is Limited to Prima Facie Examination of Arbitration Agreement's Existence

The Petitioner, Tata Capital Ltd., filed a petition under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator

The dispute arose from a Business Loan Agreement dated August 9, 2024, which contained an arbitration clause (Clause 9) providing for dispute resolution through various listed institutions

The Petitioner invoked arbitration via a statutory notice under Section 21 dated January 8, 2026

During proceedings, the Respondent expressed "no objection" to the referral of the matter to arbitration

1. Whether the court’s scope of scrutiny under Section 11 of the Act is restricted solely to the prima facie examination of the existence of an arbitration agreement

2. Whether the dispute between the parties, arising from the Business Loan Agreement, should be referred to a Sole Arbitrator

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

SBI General Insurance Co. Ltd. v. Krish Spinning (2024), which incorporated the findings of the seven-judge bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, establishing that judicial interference under Section 11 is confined to a prima facie examination of the existence of the arbitration agreement, leaving questions of validity, "accord and satisfaction," or frivolousness to the Arbitral Tribunal under the principle of competence-competence

The Court noted that the legislative intent of Section 11(6-A) is to facilitate the arbitral process with minimum judicial interference.

Reasoning from Krish Spinning, the Court emphasized that the referral court must "weed out non-existent arbitration agreements" but must not engage in a "laborious enquiry" into contested facts, which would infringe upon the Arbitral Tribunal’s jurisdiction under Section 16.

In the present case, the Court found that Clause 9 of the Agreement clearly embodied the arbitration agreement. Since the statutory notice under Section 21 was served and the Respondent concurred with the referral, the Court determined that the legal requirements for appointing an arbitrator were satisfied without a need to delve into the merits of the underlying dispute.

Finding no impediment to the referral, the Court appointed Ms. Meenal Duggal, Advocate, as the Sole Arbitrator to adjudicate the disputes valued at approximately Rs. 13 lakhs. The Court directed the arbitrator to be compensated as per the Fourth Schedule of the Act and to file a disclosure under Section 12(2). The petition was disposed of while keeping all rights and contentions on merits open for the tribunal's adjudication.