AXIS FINANCE LIMITED v. Mr. AGAM ISHWAR TRIMBAK

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. (6A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement. (6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be regarded as a delegation of judicial power by the Supreme Court or the High Court. (7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court is final and no appeal including Letters Patent Appeal shall lie against such decision. … (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case maybe, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party. [Emphasis supplied]

13. A bare perusal of the above-extracted provision would reveal that a Court’s scope of inquiry while examining an application under Section 11(6) has been legislatively curtailed through Section 11(6A) of the Act. Section 11(6A) was inserted through the Arbitration and Conciliation (Amendment) Act, 2015. The amendment sought to streamline the arbitral process by confining Courts’ scrutiny, expediting arbitral proceedings, and strengthening the efficiency of arbitration in India. The relevant portion of the Statement of Objects and Reasons of the said amendment read as under: “2. The Act [Arbitration and Conciliation Act, 1996] was enacted to provide for speedy disposal of cases relating to arbitration with least Court intervention. With the passage of time, some difficulties in the applicability of the Act have been noticed. Interpretation of the provisions of the Act by Courts in some cases have resulted in delay of disposal of arbitration proceedings and increase in interference of Courts in arbitration matters, which tend to defeat the object of the Act…

3. …The proposed amendments to the Act would facilitate and encourage Alternative Dispute Mechanism, especially arbitration, for settlement of disputes in a more user-friendly, cost effective and expeditious disposal of cases since India is committed to improve its legal framework to obviate in disposal of cases.

4. As India has been ranked at 178 out of 189 nations in the world in contract enforcement, it is high time that urgent steps are taken to facilitate quick enforcement of contracts, easy recovery of monetary claims and award of just compensation for damages suffered and reduce the pendency of cases in Courts and hasten the process of dispute resolution through arbitration, so as to encourage investment and economic activity.

6. It is proposed to introduce the Arbitration and Conciliation (Amendment) Bill, 2015…which inter alia, provides for the following, namely- …

(iii) an application for appointment of an arbitrator shall be disposed of by the High Court or Supreme Court, as the case may be, as expeditiously as possible and an endeavour should be made to dispose of the matter within a period of sixty days;

(iv) to provide that while considering any application for appointment of arbitrator, the High Court or the Supreme Court shall examine the existence of a prima facie arbitration agreement and not other issues;”

14. The impact of the Arbitration and Concilliation (Amendment) Act, 2015 on the pre-referral jurisdiction under Section 11(6) was comprehensively analysed by the Supreme Court in Vidya Drolia and Ors. v. Durga Trading Corporation[1]. Interpretting the expression “existence of an arbitration agreement” as it appears in Section 11(6A), the Supreme Court laid down the ‘Prima Facie Test’. This test aims at examining the existence and validity of an arbitration agreement, albeit on a prima facie basis, whilst simultaneously upholding the principles of competencecompetence as also recognising the primary jurisdiction of the arbitral tribunal. The material part of the judgement reads as under: “153. Accordingly, we hold that the expression “existence of an arbitration agreement” in Section 11 of the Arbitration Act, would include aspect of validity of an arbitration agreement, albeit the Court at the referral stage would apply the prima facie test on the basis of principles set out in this judgment. In cases of debatable and disputable facts, and good reasonable arguable case, etc., the Court would force the parties to abide by the arbitration agreement as the Arbitral Tribunal has primary jurisdiction and authority to decide the disputes including the question of jurisdiction and nonarbitrability. …

154.3. The general rule and principle, in view of the legislative mandate clear from Act 3 of 2016 and Act 33 of 2019, and the principle of severability and competence-competence, is that the Arbitral Tribunal is the preferred first authority to determine and decide all questions of non-arbitrability. The Court has been conferred power of “second look” on aspects of nonarbitrability post the award in terms of sub-clauses (i),

(ii) or (iv) of Section 34(2)(a) or sub-clause (i) of Section 34(2)(b) of the

154.4. Rarely as a demurrer the Court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non-existent, invalid or the disputes are non-arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably “non-arbitrable” and to cut off the deadwood. The Court by default would refer the matter when contentions relating to non-arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the Court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism.”

15. Importantly, the ‘Prima Facie Test’ involves an examination relating to both (1) the existence and validity of the arbitration agreement; and (2) the arbitrability, or the lack thereof, of the dispute. The test was elucidated by their Lordships at para. 134 of Vidya Drolia, it reads as under:

134. Prima facie examination is not full review but a primary first review to weed out manifestly and ex facie non-existent and invalid arbitration agreements and nonarbitrable disputes. The prima facie review at the reference stage is to cut the deadwood and trim off the side branches in straightforward cases where dismissal is barefaced and pellucid and when on the facts and law the litigation must stop at the first stage. Only when the Court is certain that no valid arbitration agreement exists or the disputes/subject-matter are not arbitrable, the application under Section 8 would be rejected. At this stage, the Court should not get lost in thickets and decide debatable questions of facts. Referral proceedings are preliminary and summary and not a mini trial…

16. The Supreme Court in NTPC Ltd. v. M/s. SPML Infra Ltd.[2] whilst analysing the effect of Vidya Drolia, crystallised the prima facie test into two distinct inquiries. The first inquiry relates to the existence and validity of an arbitration agreement including issues pertaining to parties and privity to the agreement; and the second concerns itself with the arbitrability of the dispute. While the former were matters “that require a thorough examination”; the latter inquiry needed to be made on a prima facie basis. This limited scrutiny was, as per the Supreme Court, through the eye of the needle, the analysis underlying the same was termed as the ‘Eye of the Needle Test’. The material parts of the judgement read as under: “Eye of the needle

25. The abovereferred precedents crystallise the position of law that the pre-referral jurisdiction of the Courts under Section 11(6) of the Act is very narrow and inheres two inquiries. The primary inquiry is about the existence and the validity of an arbitration agreement, which also includes an inquiry as to the parties to the agreement and the applicant's privity to the said agreement. These are matters which require a thorough examination by the Referral Court. The secondary inquiry that may arise at the reference stage itself is with respect to the nonarbitrability of the dispute. …

27. The standard of scrutiny to examine the non-arbitrability of a claim is only prima facie. Referral Courts must not undertake a full review of the contested facts; they must only be confined to a primary first review [Vidya Drolia v. Durga Trading Corpn., (supra)] and let facts speak for themselves. This also requires the Courts to examine whether the assertion on arbitrability is bona fide or not. The prima facie scrutiny of the facts must lead to a clear conclusion that there is not even a vestige of doubt that the claim is non-arbitrable. On the other hand, even if there is the slightest doubt, the rule is to refer the dispute to arbitration.

28. The limited scrutiny, through the eye of the needle, is necessary and compelling. It is intertwined with the duty of the Referral Court to protect the parties from being forced to arbitrate when the matter is demonstrably non-arbitrable. It has been termed as a legitimate interference by Courts to refuse reference in order to prevent wastage of public and private resources…”

17. Thus a Court’s scope of inquiry under Section 11(6) and 11(6A), under Vidya Drolia’s ‘Prima Facie Test’ and NTPC Ltd.’s refined Eye of the Needle Test broadly pertained to existence of the arbitration agreement, the legality and validity of the arbitration agreement, and the arbitrability of the dispute.

18. This position of law underwent a sea-change after the decision of the Supreme Court in In Re: Interplay Between Arbitration Agreements Under Arbitration and Conciliation Act, 1966 and Stamp Act, 18993 (hereinafter “In Re: Interplay”). The said judgement rendered by a Constituion Bench of the Supreme Court strays away from the ‘Prima Facie Test’ and ‘Eye of the

19. In In Re: Interplay, the Supreme Court confined the analysis under Section 11 of the Act to the existence of an arbitration agreement and under Section 8 of the Act to the existence and validity of an arbitration agreement. Under both the provisions, examination was to be made at the touchstone of Section 7 of the Act. Further, issues pertaining to the arbitrability of the dispute fell outside the scope of both Section 11(6A) and Section 8 of the Act. The material part of the judgement of the Supreme Court in In Re: Interplay reads as under:

164. The 2015 Amendment Act has laid down different parameters for judicial review under Section 8 and Section 11. Where Section 8 requires the referral Court to look into the prima facie existence of a valid arbitration agreement. Section 11 confines the Court’s jurisdiction to the examination of the existence of an arbitration agreement. Although the object and purpose behind both Sections 8 and 11 is to compel parties to abide by their contractual understanding, the scope of power of the referral Courts under the said provisions is intended to be different. The same is also evident from the fact that Section 37 of the Arbitration Act allows an appeal from the order of an arbitral tribunal refusing to refer the parties to arbitration under Section 8, but not from Section 11. Thus, the 2015 Amendment Act has legislatively overruled the dictum of Patel Engineering (supra) where it was held that Section 8 and Section 11 are complementary in nature. Accordingly, the two provisions cannot be read as laying down a similar standard.

165. The legislature confined the scope of reference under Section 11(6A) to the examination of the existence of an arbitration agreement. The use of the term “examination” in itself connotes that the scope of the power is limited to a prima facie determination. Since the Arbitration Act is a self-contained code, the requirement of “existence” of an arbitration agreement draws effect from Section 7 of the Arbitration Act. In Duro Felguera (supra), this Court held that the referral Courts only need to consider one aspect to determine the existence of an arbitration agreement – whether the underlying contract contains an arbitration agreement which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. Therefore, the scope of examination under Section 11(6A) should be confined to the existence of an arbitration agreement on the basis of Section 7. Similarly, the validity of an arbitration agreement, in view of Section 7, should be restricted to the requirement of formal validity such as the requirement that the agreement be in writing. This interpretation also gives true effect to the doctrine of competence-competence by leaving the issue of substantive existence and validity of an arbitration agreement to be decided by arbitral tribunal under Section 16. We accordingly clarify the position of law laid down in Vidya Drolia (supra) in the context of Section 8 and Section 11 of the Arbitration Act.

166. The burden of proving the existence of arbitration agreement generally lies on the party seeking to rely on such agreement. In jurisdictions such as India, which accept the doctrine of competencecompetence, only prima facie proof of the existence of an arbitration agreement must be adduced before the referral Court. The referral Court is not the appropriate forum to conduct a minitrial by allowing the parties to adduce the evidence in regard to the existence or validity of an arbitration agreement. The determination of the existence and validity of an arbitration agreement on the basis of evidence ought to be left to the arbitral tribunal. This position of law can also be gauged from the plain language of the statute.

167. Section 11(6A) uses the expression “examination of the existence of an arbitration agreement.” The purport of using the word “examination” connotes that the legislature intends that the referral Court has to inspect or scrutinize the dealings between the parties for the existence of an arbitration agreement. Moreover, the expression “examination” does not connote or imply a laborious or contested inquiry. On the other hand, Section 16 provides that the arbitral tribunal can “rule” on its jurisdiction, including the existence and validity of an arbitration agreement. A “ruling” connotes adjudication of disputes after admitting evidence from the parties. Therefore, it is evident that the referral Court is only required to examine the existence of arbitration agreements, whereas the arbitral tribunal ought to rule on its jurisdiction, including the issues pertaining to the existence and validity of an arbitration agreement. A similar view was adopted by this Court in Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd.”

20. The effect of In Re: Interplay was further explained by a Three Judge Bench of the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning[4] wherein the Court declared Vidya Drolia and NTPC Ltd.’s findings qua scope of inquiry under Section 8 and Section 11 of the Act to no longer be compatible with modern principles of arbitration. The material portions of the judgement read as under: “114. In view of the observations made by this Court in In Re: Interplay (supra), it is clear that the scope of enquiry at the stage of appointment of arbitrator is limited to the scrutiny of prima facie existence of the arbitration agreement, and nothing else. For this reason, we find it difficult to hold that the observations made in Vidya Drolia (supra) and adopted in NTPC v. SPML (supra) that the jurisdiction of the referral Court when dealing with the issue of “accord and satisfaction” under Section 11 extends to weeding out ex-facie non-arbitrable and frivolous disputes would continue to apply despite the subsequent decision in In Re: Interplay (supra). …

118. Tests like the “eye of the needle” and “ex-facie meritless”, although try to minimise the extent of judicial interference, yet they require the referral Court to examine contested facts and appreciate prima facie evidence (however limited the scope of enquiry may be) and thus are not in conformity with the principles of modern arbitration which place arbitral autonomy and judicial non-interference on the highest pedestal.”

21. Similarly, in BGM and M-RPL-JMCT (JV) v. Eastern Coalfields Ltd.[5] the Supreme Court succinctly explained the effect of In Re: Interplay on a Referral Court’s powers under Section 11 of the Act. The relevant part of the judgement is as under:

15. … (a) Section 11 confines the Court's jurisdiction to the examination regarding the existence of an arbitration agreement. (b) The use of the term “examination” in itself connotes that the scope of the power is limited to a prima facie determination.

(c) Referral Courts only need to consider one aspect to determine the

2025 SCC OnLine SC 1471 existence of an arbitration agreement — whether the underlying contract contains an arbitration agreement which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement. Therefore, the scope of examination under Section 11(6-A) should be confined to the existence of an arbitration agreement on the basis of Section 7. Such a legal approach will help the Referral Court in weeding out prima facie non-existent arbitration agreements.

(d) The purport of using the word “examination” connotes that the legislature intends that the Referral Court has to inspect or scrutinise the dealings between the parties for the existence of an arbitration agreement. However, the expression “examination” does not connote or imply a laborious or contested inquiry. (e) The burden of proving the existence of arbitration agreement generally lies on the party seeking to rely on such agreement. Only prima facie proof of the existence of an arbitration agreement must be adduced before the Referral Court. The Referral Court is not the appropriate forum to conduct a mini-trial by allowing the parties to adduce the evidence in regard to the existence or validity of an arbitration agreement. The determination of the existence and validity of an arbitration agreement on the basis of evidence ought to be left to the Arbitral Tribunal. (f) Section 16 provides that the Arbitral Tribunal can “rule” on its jurisdiction, including the existence and validity of an arbitration agreement. A “ruling” connotes adjudication of disputes after admitting evidence from the parties. Therefore, when the Referral Court renders a prima facie opinion, neither the Arbitral Tribunal, nor the Court enforcing the arbitral award is bound by such a prima facie view. If a prima facie view as to the existence of an arbitration agreement is taken by the Referral Court, it still allows the Arbitral Tribunal to examine the issue in depth.

22. Thus from the above-mentioned authorities it is clear that a Court’s scope of inquiry under Section 11 of the Act has been limited to a prima facie examination of the existence of an arbitration agreement while the adjudication under Section 8 is to be made for both existence and validity. Further, the examination so undertaken under both the said provisions must be within the confines of Section 7 of the Act. Objections relating to arbitrability of disputes are not to be entertained by a referral Court acting under Section 8 or 11 of the Act.

MEANING OF AN ARBITRATION AGREEMENT

23. The next part of this Court’s analysis shall deal with Section 7 of the Act, through the lens of which, an examination of the existence and validity of an arbitration agreement is to be made. The said section, for ease of analysis, is reproduced as under:

7. Arbitration agreement.—(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in— (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

24. According to para. 164-165 of In Re: Interplay (reproduced above), an analysis of validity for the purposes of Section 8 is to be restricted to formal validity such as the requirement that the agreement be in writing. It is noteworthy to mention that since the Supreme Court in the said case drew a sharp distinction between a Court’s scope of inquiry under Section 8 and Section 11, and resultantly between existence and validity of an arbitration agreement, it is plausible to infer that formal validity requirements such as that the agreement be in writing is not to be considered by the referral Court under Section 11.

25. Since the requirement of the arbitration agreement to be in writing, as contained in Section 7(3), falls within the analysis of validity, it naturally follows that Sections 7(2), 7(4) and 7(5) also fall outside the scope of a Court’s referral jurisdiction under Section 11. It is therefore the case that stripped from questions of formal validity, the inquiry into the existence of an arbitration agreement under Section 11(6A) may be made through the means of Section 7(1) of the Act. It is needless to repeat that this examination is to be made on a prima facie basis.

26. Thus a Court acting under Section 11(6) of the Act while exercising its referral jurisdiction need only satisfy itself that prima facie an arbitration agreement as per Section 7(1) of the Act exists.

27. This Court finds it appropriate to deal with a few relevant judgements of the Supreme Court pertaining to the meaning and existence of an arbitration agreement. In Bihar State Mineral Development Corporation and Anr v. Encon Builders (I) (P) Ltd.6, the Supreme Court in para. 13, laid down 4 essentials of an “arbitration agreement”, them being: (1) There must be a present or a future difference in connection with some contemplated affair.

(2) There must be the intention of the parties to settle such difference by a private tribunal. (3) The parties must agree in writing to be bound by the decision of such tribunal. (4) The parties must be ad idem.

28. In Jagdish Chander v. Ramesh Chander[7] the Supreme Court summarized the principles which emerge from the case-law on the issue of what constitutes an arbitration agreement. The material part of the judgement reads as under:

Authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the Authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement.

29. Further in Cox and Kings Ltd. v. SAP India Pvt. Ltd.,[8] a Constitution bench of the Supreme Court explained the import of an arbitration agreement in the following words:

30. Thus, from the above-narrated conspectus it is clear that an arbitration agreement under Section 7(1) of the Act consists of parties agreeing, and resultantly considering it as a mutual obligation, that when a dispute or a category of disputes arise between them, the same shall be decided by a private adjudicator/tribunal whose decision shall bind the parties so reaching an agreement. Under Section 11(6) of the Act, a Court need only be prima facie satisfied that such an agreement exists.

WHETHER ALLEGATIONS OF FRAUD AND FORGERY ARE TO

BE CONSIDERED UNDER SECTION 11(6) OF THE ACT

31. From the discussion above, it is apparent that objections pertaining to a dispute not being arbitrable owing to fraud or forgery cannot be considered by a Court under Section 11(6) of the Act. Further, claims of a concerned arbitration agreement not existing under Section 7(1) owing to fraud or forgery, in an overwhelming majority of cases, require determination through the means of evidence tendered by the parties.

32. This examination of evidence by a Court, and the application of judicial mind to it, usually causes a Court to traverse beyond the Lakshman Rekha set forth under Section 11(6A). The review of contested evidence, and the reaching of conclusions on the basis of it, no longer remains a prima facie inquiry and is also against the legislative intent of Section 11(6A) as discussed above.

33. The arbitration tribunal evidently is better placed to review the entire record, evidence within it, and thereafter come to a conclusion. A similar view has been taken by the Supreme Court in SBI General Insurance Co. Ltd. v. Krish Spinning where the Supreme Court, after declaring the scope of inquiry under Section 11 of the Act to be narrow, at para. 125 notes the arbitral tribunal to be better equipped to deal with objections of frivolity and dishonesty. The material part of the judgement is as follows:

34. In Goqii Technologies Pvt. Ltd. v. Sokrati Technologies Pvt. Ltd.,[9] the petitioner therein prayed for the appointment of an arbitrator to resolve 2024 SCC OnLine Bom 3530 the dispute which had allegedly arisen between the petitioner and the respondent therein. The dispute as agitated in the petition related to the respondent engaging in, inter alia, fraudulent activities, the same being allegedly confirmed by an independent external audit report, and the petitioner resultantly withholding certain payments it had to make to the respondent therein under a particular contract.

35. The Bombay High Court in Goqii analysed and appreciated the contents of the report of the external auditor/consultant and found that it did not support the submissions made by the petitioner therein. The claim of the petitioner was further found to be dishonest. Material part of the judgement is reproduced as under:

19.1. A manifestly dishonest claim or a contest, which is sought to be raised to a lawful demand of the money due and payable under the MSA, particularly, when, while availing the services, at no point of time, any deficiency in services is pointed out, but only by way of defence to the invoices raised, an independent agency's report is being projected, as a support to canvass the deficiency in service, by attributing fraudulent acts to the respondent which, in fact, is not the finding of the independent auditor.

36. A Three Judge Bench of the Supreme Court in Goqii Technologies Pvt. Ltd. v. Sokrati Technologies Pvt. Ltd.10 applying the dicta of Krish Spinning and In Re: Interplay reversed the judgement of the High Court, finding it to be erroneous. The Supreme Court further reiterated the scope of Section 11 to be narrow, limited, and not extending to a detailed examination of the factual matrix. The material part of the judgement reads as under: “19. The scope of inquiry under Section 11 of the 1996 Act is limited to ascertaining the prima facie existence of an arbitration agreement. In the present case, the High Court exceeded this limited scope by undertaking a detailed examination of the factual matrix. The High Court erroneously proceeded to assess the auditor's report in detail and dismissed the arbitration application. In our view, such an approach does not give effect to the legislative intent behind the 2015 Amendment to the 1996 Act which limited the judicial scrutiny at the stage of Section 11 solely to the prima facie determination of the existence of an arbitration agreement.

20. As observed in Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., 2024 SCC OnLine SC 1754], frivolity in litigation too is an aspect which the referral Court should not decide at the stage of Section 11 as the arbitrator is equally, if not more, competent to adjudicate the same.”

37. In a recent decision, the Supreme Court in Bihar State Food and Civil Supply Corporation Ltd. and Anr. v. Sanjay Kumar11 dealt with the scope of Section 11(6) of the Act and objections to a petition on grounds of criminality involving, inter alia, serious fraud. The issue VI of the judgement as formulated by their Lordships in the judgement reads:

“VI. Re: Issue No. 6: Scope of enquiry by the referral Court when an application under Section 11(6) of the Act is opposed on the grounds of serious fraud.”

38. The Supreme Court relying upon In Re: Interplay affirmed the judgement of the High Court which allowed the petition of the respondent therein for the appointment of an arbitrator under Section 11(6) of the Act. In eloquent words their Lordships held that the scope of inquiry under Section 11(6) of the Act is to be confined to an examination of the existence of an arbitration agreement. The material portion of the judgement reads as under:

27. The curtains have fallen. Courts exercising jurisdictions under Section 11(6) and Section 8 must follow the mandate of sub-section (6A), as interpreted and mandated by the decisions of this Court and their scrutiny must be “confine(d) to the examination of the existence of the arbitration agreement”.

28. We have examined the matter in detail. There is an arbitration agreement. The matter must end here. While we agree with Mr. Ranjit Kumar submissions that his client has much to say, let all that be said before the arbitral tribunal. It is, as we have said elsewhere, just as necessary to follow a precedent as it is to make one.

29. All the issues raised by Mr. Ranjit Kumar, senior counsel are kept open for being raised and contested before the arbitral tribunal. The issues that we have not taken up and left it to the arbitral tribunal are jurisdictional issues, involving barring of the arbitral proceedings due to limitation or for the reason that they are non-arbitrable. These issues shall be taken up as preliminary issues and the arbitral tribunal will consider them after giving opportunity to all the parties.”

V. APPLICATION TO FACTS

39. In the instant case, Clause 14 of the Personal Loan Agreement (Petitioner’s Document 2) which contains the arbitration clause reads as under:

40. The above-extracted clause falls under the category of cases mentioned in para. 8(iii) of Jagdish Chander. The clause provides that the disputes/differences of the the parties to the agreement are to be settled through arbitration which is to be held in accordance with the Act. A conclusion as to the prima facie existence of the arbitration agreement can therefore be reached by the Court. Material part of the judgement in Jagdish Chander reads as under:

8. … …

(iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration

41. Even otherwise, the terms of the said clause are sufficient to reach a prima facie conclusion that the parties to the agreement intend to submit their disputes before a private adjudicator/tribunal and to be bound by it.

42. The said loan agreement bears signatures which appear to the Court to be of the respondent. Prima facie they appear to match with the signatures of the respondent appended to respondent’s annexure R[2] and R[3].

43. While the respondent has claimed the said signature to be forged, an examination of whether the respondent did in fact sign the loan agreement containing the concerned arbitration clause would fall outside the scope of Section 11(6) and breach the ‘Lakshman Rekha’ of Section 11(6A). An examination on this issue may be made, if at all it is found relevant, by the arbitral tribunal.

CONCLUSIONS

44. The conclusions reached by this Court are as under: a. The scope of inquiry under Section 11 and Section 8 of the Act are fundamentally different. While the former is concerned with the existence of an arbitration agreement; the latter involves an examination of the validity and existence of an arbitration b. The scope of inquiry under Section 11(6) of the Act is legislatively curtailed by Section 11(6A), which serves as the Laksham Rekha, beyond which a Court must not traverse. c. The validity and existence of an arbitration agreement are to be examined at the touchstone of Section 7 of the Act where issues pertaining to arbitrability of the dispute have no place. d. To meet the existence requirement of Section 11(6A) a Court must prima facie be satisfied that an agreement exists between parties that when a dispute or a category of disputes arise between them, the same shall be decided by a private adjudicator/tribunal whose decision shall bind the parties so reaching an agreement. Once this requirement is met, the Court concerned must refer the parties to arbitration. e. In the facts of the instant case this Court is satisfied that there exists an arbitration agreement between the petitioner and the respondent. The requirements of Section 11(6A) have been satisfied and resultantly this Court is inclined to appoint an Arbitrator to adjudicate upon the disputes between the parties.

45. Accordingly, Mr. Siddhant Singh, Advocate (Mobile No- 9654422804; and email ID- singhsiddhant.adv@gmail.com) is appointed as the sole Arbitrator.

46. The Sole Arbitrator may proceed with the arbitration proceedings, subject to furnishing to the parties the requisite disclosures as required under Section 12 of the Arbitration and Conciliation Act.

47. The Sole Arbitrator shall be entitled to fee in accordance with the IVth Schedule of the Arbitration and Conciliation Act or as may otherwise be agreed to between the parties and the learned Sole Arbitrator.

48. The parties shall share the arbitrator’s fee and arbitral costs, equally.

49. All rights and contentions of the parties in relation to the claims/counterclaims are kept open, to be decided by the Sole Arbitrator on their merits, in accordance with law.

50. Needless to state, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the controversy. All rights and contentions of the parties in this regard are reserved. Let the copy of the said order be sent to the appointed Arbitrator through electronic mode as well.

51. Accordingly, the instant petition stands disposed of.

JUDGE AUGUST 8, 2025 aks/sph