Section 11 jurisdiction is limited to the prima facie existence of an arbitration agreement.

The Petitioner, Grow Indigo Private Limited, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator.

The dispute arose from two Product Sale Purchase Agreements dated 22.03.2022 and 02.12.2022 regarding the refund of outstanding money.

Both agreements contain an identical arbitration clause (Clause 11.2) designating Delhi as the seat of arbitration.

The Petitioner invoked the arbitration clause via a legal notice dated 27.09.2024.

The claims are valued at approximately Rs. 18 lakhs.

During the proceedings, both parties consented to the appointment of a Sole Arbitrator by the Court.

1. Whether the Court, while exercising jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996, is required to limit its scrutiny to the prima facie existence of the arbitration agreement.

2. Whether a Sole Arbitrator should be appointed to resolve the disputes arising from the Product Sale Purchase Agreements.

Section 11 of the Arbitration and Conciliation Act, 1996, which governs the appointment of arbitrators.

The scope of judicial inquiry under Section 11 is confined to a prima facie examination of the existence of the arbitration agreement and its formal validity (e.g., being in writing), leaving contested issues such as "accord and satisfaction" or the merits of the dispute to the Arbitral Tribunal under the principle of competence-competence.

Precedent established by the three-judge bench of the Supreme Court in 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 (2024).

The Court noted that its role under Section 11 is facilitative and procedural rather than adjudicatory.

Citing Krish Spinning, the Court observed that legislative intent behind Section 11(6-A) was to minimize judicial interference and ensure the autonomy of the arbitral process.

The Court emphasized that it must only "weed out" non-existent agreements and should not engage in a "laborious enquiry" into the merits, as the Arbitral Tribunal is better equipped to appreciate evidence and decide on "ex facie frivolity".

Since Clause 11.2 clearly provided for arbitration and both parties were ad idem (in agreement) regarding the referral of the dispute to a Sole Arbitrator, the Court found no impediment to the appointment.

The Court clarified that the appointment does not reflect an opinion on the merits of the controversy, which remains within the exclusive domain of the arbitrator.

The Arbitrator was requested to file a mandatory disclosure under Section 12(2) within one week.

The Court directed that arbitration costs and fees be shared equally by the parties.

All rights and contentions of the parties were kept open for the Arbitrator’s determination, and the Court expressly stated it had not formed an opinion on the merits of the case. The petition and pending applications were disposed of accordingly.