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2026 Supreme(Online)(Del) 6480

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
Moneywise Financial Services Pvt Ltd – Appellant
Versus
Shree Manibhadra Agency – Respondent
ARB.P. 280/2026



Advocates:
For the Appellants/Petitioners: Ranjil Kumar Dubey, Pankaj Kumar, Abhay Pandey
For the Respondents: None

The court's jurisdiction under Section 11 is strictly confined to a prima facie examination of the existence of an arbitration agreement. Contentious issues of law, fact, or merits of the controversy are outside the scope of such inquiry and must be adjudicated by the arbitral tribunal.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of an arbitrator - Scope and standard of judicial scrutiny - Referral court’s role is confined to prima facie examination of existence of an arbitration agreement - Contested factual and legal issues, including the merits of the dispute or questions of 'accord and satisfaction', fall within the exclusive jurisdiction of the arbitral tribunal - Procedural role of the court is to facilitate dispute resolution when the agreed mechanism fails - Statutory requirement of issuance of notice must be fulfilled. (Paras 6-9)

Facts of the case:
The petitioner requested the court's intervention to appoint a sole arbitrator for the resolution of disputes arising out of a commercial agreement. A legal notice invoking the dispute resolution mechanism was duly served upon the respondents, who failed to enter an appearance before the court despite being served through electronic and postal modes.

Findings of Court:
The court determined that since the existence of a valid arbitration agreement was established, and the statutory requirements for notice had been met, there was no legal impediment to the appointment of an arbitrator. The court emphasized that the scope of its inquiries at this stage is limited to the prima facie existence of the agreement.

Issues: The main issue was establishing the scope and standard of judicial review by a referral court when considering the appointment of an arbitrator, and determining whether the court should examine the merits of the controversy or the validity of the underlying disputes.

Ratio Decidendi: The court ruled that the referral process is strictly facilitative and procedural, intended for the purpose of removing obstacles in the appointment process. The court should not delve into contested factual or legal matters, as these are reserved for the arbitral tribunal to adjudicate in accordance with the principle of competenz-kompetenz.

Result: Petition allowed; the court appointed a sole arbitrator to adjudicate the disputes between the parties.

Table of Content
1. procedural facts, existence of arbitration clause, and service of notice established. (Para 1 , 2 , 3 , 4 , 5 , 10)
2. referral court's scope under section 11 is limited to prima facie existence of the arbitration agreement. (Para 6 , 7 , 8)
3. court finds valid agreement and service, warranting the appointment of an arbitrator. (Para 9)
4. formal appointment of the arbitrator with procedural directions for cost and conduct. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18)

% JUDGEMENT (ORAL)

1. The present Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 [“Act”], seeking appointment of a Sole Arbitrator to adjudicate upon the disputes inter se the parties, arising out of the Loan Agreement dated 29.02.2024 [“Agreement” executed between the parties.

2. The Agreement contains a dispute resolution mechanism, which contemplates adjudication of disputes, arising between the parties, by way of Arbitration. The relevant stipulation is contained as Clause 8.2 of the Agreement [“Arbitration clause”]. The same reads as follows:-

“8.2 Arbitration: Any disputes, differences, controversies and questions directly or indirectly arising at any time hereafter between the Parties or their respective representatives or assigns, arising out of or in connection with this Agreement (or the subject matter of this Agreement), including, without limitation, any question regarding its existence, validity, interpretation, construction, performance, enforcement, rights and liabilities of the Parties, or termination ("Dispute") thereof shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996, as amended ("Arbitration Act"). The Dispute shall be referred to a sole arbitrator duly appointed by the Parties with mutual consent failing which the sole arbitrator shall be appointed in accordance with the Arbitration Act. The language of the arbitration shall be English. The seat of the arbitration shall be at Delhi and the language of proceedings shall be English. The award rendered shall be in writing and shall set out the reasons for the arbitrator's decision. The costs and expenses of the arbitration shall be borne equally by each Party, with each Party paying for its own fees and costs including attorney fees, except as may be determined by the arbitration tribunal. Any award by the arbitration tribunal shall be final and binding.”

3. The material on record also reflects that the statutory requirement of addressing a Legal Notice under Section 21 of the Act, invoking the aforestated Arbitration clause, stands duly complied with by the Petitioner vide Legal Notice dated 07.06.2025 [“Section 21 Notice”].

4. This Court takes note of the fact that the Petitioner has placed on record, the Affidavit of service dated 10.03.2026 [“Affidavit” duly declaring that service has been effectuated upon the Respondent Nos. 1 and 2 through e-mail and Respondent No. 3 has been served through courier. The relevant documents, proving the effectuation of service upon the Respondents, is annexed with the said Affidavit.

5. Despite due service upon the Respondents, none has appeared on their behalf, either on the previous date of hearing i.e., 13.03.2026 or today.

6. At this juncture, it is apposite to note that the legal position governing the scope and standard of judicial scrutiny under Section 11(6) of the Act is no longer res integra. A three-Judge Bench of the Hon’ble Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning, (2024) 12 SCC 1, after taking into consideration the authoritative pronouncement of the seven-Judge Bench in Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re, (2024) 6 SCC 1, comprehensively delineated the contours of judicial intervention at the stage of Section 11 of the Act. The excerpt of Krish Spg (supra) reads as under:-

“(c) Judicial interference under the 1996 Act

110. The parties have been conferr

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