Back
2026 Supreme(Online)(Del) 6486
IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
Tata Capital Limited – Appellant
Versus
Black Pearl Automotive Solutions Private Limited – Respondent
ARB.P. 84/2026
For the Appellants/Petitioners: Varun Kumar, Ragini Kapoor
For the Respondents: None
Under Section 11(6) of the Arbitration and Conciliation Act, the power of a court is restricted to a prima facie examination of the existence of an arbitration agreement. Judicial scrutiny is limited and should not extend to resolving contested factual or legal issues, which remain within the arbitrator's jurisdiction.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 11(6) and 11(6-A) - Appointment of Arbitrator - Scope of judicial intervention - Referral court’s scrutiny is limited to a prima facie examination of the existence of an arbitration agreement - Once the existence of an arbitration clause is established and notice for invocation is complied with, the court is obligated to appoint an arbitrator to resolve the deadlock - Contested issues pertaining to facts or legal contentions should be left for the arbitral tribunal to adjudicate as matters within its exclusive domain. (Paras 3, 5, 8, 9, 10)
(B) Arbitration and Conciliation Act, 1996 - Section 11(6) - Procedure for appointment - Where parties fail to agree on a sole arbitrator despite a clear mechanism provided in the agreement, the court is empowered to step in to prevent a breakdown in the dispute resolution process - Such appointment is purely procedural and facilitative to uphold party autonomy. (Paras 7, 13)
Facts of the case:
An application was filed seeking the appointment of an arbitrator following a dispute arising out of an agreement between the parties. Despite notice invoking the arbitration clause and the failure of the respondent to participate, the petitioner approached the court for the appointment of a sole arbitrator as per the procedure set out in the agreement. The respondent did not appear despite service.
Findings of Court:
The court observed that the statutory requirement for notice had been fulfilled and the arbitration agreement existed between the parties. Following the law established by the Supreme Court, the court noted that its role at the stage of the appointment of an arbitrator is limited to a prima facie examination of the existence of an arbitration agreement and it should not delve into contentious factual or legal issues that are reserved for the arbitral tribunal.
Issues: The main issue was whether the court should exercise its power to appoint an arbitrator under the provided mechanism when one party fails to respond, and the extent of the court's jurisdiction to examine the merits of the dispute at the appointment stage.
Ratio Decidendi: The court held that the referral power at the appointment stage is narrowly circumscribed to a prima facie examination of the existence of an arbitration agreement. Contentions concerning the merits of the dispute or issues of fact are exclusively within the jurisdiction of the arbitral tribunal. Intervention by the court is limited to giving effect to the parties' agreement when the appointed process faces a deadlock, ensuring that arbitral autonomy is preserved.
Result: Petition allowed. Arbitrator appointed to adjudicate disputes.
| Table of Content |
|---|
| 1. establishing the factual background, arbitration agreement, and procedural service. (Para 1 , 2 , 3 , 5 , 6 , 12) |
| 2. petitioner's contentions regarding jurisdiction and arbitrator qualification requirements. (Para 4 , 11) |
| 3. court affirmation of authority to appoint arbitrator due to respondent's non-appearance. (Para 7 , 10) |
| 4. referral court's power under section 11 is strictly limited to prima facie existence of arbitration agreement. (Para 8 , 9) |
| 5. final orders appointing the arbitrator, setting fees, and disposing of the petition. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
O R D E R
% 25.04.2026
1. In view of Notification No. 64/G-4/Genl.-I/DHC dated 27.02.2026, the present matter which was previously listed on 03.03.2026, has been listed today.
2. The present Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an Arbitrator for adjudication of disputes inter se the parties arising out of the Loan-cum-Guarantee Agreement dated 26.09.2024.
3. The dispute resolution clause, which contemplates an Arbitration Agreement between the parties, is stated to be Clause 12 of the Agreement, which reads as follows:
“12. Arbitration
If any dispute, difference or claim arises between any of the Obligors and the Lender in connection with the Facility or as to the interpretation, validity, implementation or effect of the Facility Documents or as to the rights and liabilities of the parties under these T&Cs or alleged breach of the Facility Documents or anything done or omitted to be done pursuant to the Facility Documents, the same shall be settled by arbitration by a sole arbitrator to be appointed as per the procedure below and to be held at such place as agreed by the Parties in Serial No. 17 of Annexure 1 hereto of the Agreement. The Party invoking the arbitration (“Claimant”) shall address a notice to the other Party (“Respondent”) suggesting the names of not more than three arbitrators, all of whom shall be either retired judges of the District Court, High Court or the Supreme Court or a lawyer having minimum 10 years relevant experience. The Respondent shall either:
(i) Confirm in writing acceptance of one amongst the proposed names as the sole arbitrator to the Claimant within a period of ten (10) days from the date of notice (“Notice Period”); or
(ii) Convey objection, if any, in writing to the Claimant, against the proposed names of the sole arbitrator within the said Notice Period. However, if the Claimant does not receive any response from the Respondent within the said Notice Period, the Claimant shall be entitled to nominate any one person from amongst the proposed three names as the sole arbitrator and such arbitrator shall be deemed to be appointed by both the Parties.
In the event, the Respondent conveys its objection as per (ii) above then the sole arbitrator will be appointed by a Court having jurisdiction. The arbitration shall be conducted under the provisions of the Arbitration and Conciliation Act, 1996 together with its amendments, any statutory modifications or re-enactment thereof for the time being in force. The arbitration proceeding shall be conducted in English language. The award of the arbitrator shall be final and binding on all Parties concerned. The cost of arbitration shall be borne by the Obligors.”
4. Learned counsel appearing on behalf of the Petitioner draws the attention of this Court to Annexure-I of the said Agreement, and in particular to Clause nos. 17 and 18 thereof, which stipulate that the place of arbitration shall be Delhi and that the Courts at Delhi shall have exclusive jurisdiction.
5. The material on record further reflects that the statutory requirement of notice under Section 21 of the A&C Act, invoking the aforesaid arbitration clause, stands duly complied with by the Petitioner vide legal notice dated 30.10.2025.
6. The record also indicates that service stands effected upon the Respondents. However, n
