Section 11 scrutiny is confined to the prima facie existence of a valid arbitration agreement.

The Petitioner invoked Section 11 of the Arbitration and Conciliation Act, 1996 (“Act”) seeking resolution of disputes arising from the Fund Raising Services Agreements dated 8 July 2021 and 16 July 2021.

The Petitioner alleged that the Respondent failed to perform its contractual obligations despite receiving an advance payment of ₹6,14,500, and sought refund, compensation for loss, and legal costs.

The agreements contained an arbitration clause providing for arbitration by a sole arbitrator and conferring jurisdiction on the courts at New Delhi.

During the proceedings, the parties expressed willingness to explore an amicable settlement through mediation; they also agreed that, if mediation failed, the disputes could be referred to arbitration.

Whether a valid arbitration agreement existed between the parties so as to attract the jurisdiction of the Court under Section 11 of the Act.

Whether the disputes should be referred to mediation before appointment of an arbitral tribunal.

Whether, in the event of failure of mediation, a sole arbitrator should be appointed to adjudicate the disputes.

Section 11 of the Arbitration and Conciliation Act, 1996 requires the Court, at the referral stage, to examine primarily whether a valid arbitration agreement prima facie exists between the parties.

Where the parties are amenable to settlement, the Court may refer the matter to mediation before proceeding with arbitration.

Upon failure of mediation and where the parties are agreed to arbitration, the Court may appoint a sole arbitrator under Section 11.

The appointed arbitrator must furnish the disclosures contemplated by Section 12(2), and the arbitral proceedings may be conducted under the rules and aegis of the Delhi International Arbitration Centre.

The Court found no dispute regarding the existence of a valid arbitration agreement because Article 6 of the Service Agreement expressly provided for arbitration of disputes by a sole arbitrator, with New Delhi as the place of arbitration and the courts at New Delhi having exclusive jurisdiction.

Since the parties were willing to attempt an amicable resolution, the Court first referred the matter to the Delhi High Court Mediation and Conciliation Centre and directed the parties to participate in mediation within the prescribed period.

The Court further recorded that, if mediation failed, the parties were ad idem regarding arbitration.

Consequently, it found no impediment to appointing a sole arbitrator and appointed Mr. Kartikay Sharma, Advocate, subject to the statutory disclosure requirements and the DIAC framework.

The Court preserved the parties’ right to raise objections regarding arbitrability and jurisdiction before the arbitrator and clarified that its observations were confined to the Section 11 proceedings.

In the event mediation failed, Mr. Kartikay Sharma was appointed as the sole arbitrator to adjudicate the disputes, and was directed to enter upon the reference within six weeks and furnish the disclosures required under Section 12(2) of the Act.

The arbitration was directed to be conducted under the rules and aegis of DIAC, with fees payable under the DIAC Schedule of Fees.

All pleas, including objections to arbitrability and jurisdiction, were left open for determination by the arbitrator.