The court's authority during an arbitration appointment petition is limited to a prima facie verification of the existence of an arbitration agreement. Contentious issues concerning the underlying agreement's validity, including objections regarding non-registration, must be decided by the arbitral tribunal.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 9, 11(6), 17, 21 - Scope of judicial inquiry - The role of the court at the stage of appointment of an arbitrator is strictly facilitative and confined to a prima facie examination of the existence of the arbitration agreement - Arguments regarding the validity of an agreement, such as those arising from non-registration, fall within the exclusive jurisdiction of the arbitral tribunal to adjudicate. (Paras 5, 7, 8)

(B) Arbitration and Conciliation Act, 1996 - Section 9 - Interim relief - Once a dispute is referred to an arbitrator, an application seeking interim measures shall be treated as an application under section 17 of the act to be adjudicated by the arbitral tribunal upon entering into the reference. (Paras 16, 17)

Facts of the case:
A petition was filed requesting the appointment of a sole arbitrator to resolve disputes stemming from agreements to sell. The opposing side objected to the maintainability of the petition on the ground that the agreements were unregistered and thus the contained arbitration clause was unenforceable. The petitioner also sought interim relief to protect the property in question.

Findings of Court:
The court held that the objection concerning the lack of registration does not preclude the court from appointing an arbitrator, as the referral jurisdiction is limited to a prima facie finding of existence. Further, the petition for interim measures was directed to be adjudicated by the appointed arbitrator as an application for interim relief under the governing act.

Issues: Whether the non-registration of agreements containing an arbitration clause prevents the court from exercising its power to appoint an arbitrator, and how pending interim relief applications are to be processed after the initiation of arbitration.

Ratio Decidendi: The court affirmed that judicial interference at the stage of appointing an arbitrator must be minimal, restricted to a prima facie determination of the existence of the arbitration agreement. Merits of the case, including contractual validity issues arising from non-registration, are to be determined through a detailed inquiry by the arbitral tribunal.

Result: Petition allowed; arbitrator appointed and interim application referred to the tribunal.

Table of Content
1. initiation of section 11 arbitration proceedings. (Para 1 , 2 , 3)
2. maintainability of arbitration despite unregistered agreements. (Para 4 , 5 , 6)
3. scope of section 11 judicial interference limited. (Para 7 , 8)
4. court appointment of independent sole arbitrator. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15)
5. conversion of section 9 to section 17. (Para 16 , 17 , 18 , 19 , 20)

JUDGMENT :

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, [Act], seeking the appointment of a Sole Arbitrator for adjudication of disputes inter se the parties arising out of the Agreements to Sell dated 05.08.2024 and 04.09.2024, [Agreements].

2. Material on record reflects that the Agreements envisage a dispute resolution clause, being Clause 15, which reads as under:

"15. That in case any dispute arises between the parties regarding the sale of the said property in future, then the parties shall appoint an ARBITRATOR solely at the discretion of SECOND PARTY / BUYER, who will decide the disputed matter and whose decision shall be final and binding on both the parties as per provision of Indian Arbitration act, as amended up to date."

3. Material on record further indicates that the Notice under Section 21 of the Act came to be issued by the Petitioner on 11.12.2025.

4. Learned counsel appearing on behalf of the Respondents objects to the maintainability of the present Petition, contending that the Agreements are unregistered documents and, therefore, the arbitration clause contained therein is unenforceable.

5. This Court is of the view that the objection raised on behalf of the Respondents with respect to the requirement of registration of the Agreements would not, prima facie, affect the enforceability of the arbitration clause contained herein and the Respondent is not precluded from raising the said objection before the learned Arbitral Tribunal.

6. This Court is therefore of the opinion that there exists no further impediment in referring the disputes raised in the present Petition to arbitration.

7. 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 Spinning (supra) reads as under:-

“(c) Judicial interference under the 1996 Act

110. The parties have been conferred with the power to decide and agree on the procedure to be adopted for appointing arbitrators. In cases where the agreed upon procedure fails, the courts have been vested with the power to appoint arbitrators upon the request of a party, to resolve the deadlock between the parties in appointing the arbitrators.

111. Section 11 of the 1996 Act is provided to give effect to the mutual intention of the parties to settle their disputes by arbitration in situations where the parties fail to appoint an arbitrator(s). The parameters of judicial review laid down for Section 8 differ from those prescribed for Section 11. The view taken in SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and affirmed in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 that Sections 8 and 11, respectively, of the 1996 Act are complementary in nature was legislatively overruled by the introduction of Section 11(6-A) in 2015. Thus, although both these provisions intend to compel parties to abide by their mutual intention to arbitrate, yet the scope of powers conferred upon the courts under both the sections are different.

112. The difference between Sections

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2026 Supreme(Del) 937

Cases Referred (2)