Delhi High Court: Arbitrator To Make Final Determination On Question Of Arbitrability

Delhi High Court: Arbitrator To Make Final Determination On Question Of Arbitrability

The Delhi High Court has ruled that the arbitrator should make the final determination regarding the arbitrability of the dispute and the subject matter. The court emphasized that its role under Section 11 of the Arbitration and Conciliation Act (A&C Act) is confined to a preliminary assessment of the agreement's existence.

Justice Prateek Jalan has emphasized that the Court may intervene only if the dispute is evidently not arbitrable. It stated that an agreement is prima facie established when it bears the signatures of the parties and is attested by a notary.

The parties executed an agreement to sell on 02.01.2008, wherein Clause 7 stipulated arbitration as the method for resolving disputes. Subsequently, a dispute emerged between the parties, prompting the petitioner to invoke arbitration through a letter dated 15.09.2022, proposing the appointment of a sole arbitrator.

Following the parties' inability to mutually appoint an arbitrator, the petitioner submitted an application under Section 11(6) of the Act, requesting the High Court to appoint an arbitrator.

The respondent objects to the appointment of the arbitrator, asserting that there is no arbitration agreement between the parties due to the disputed nature of the documents relied upon by the petitioner. Specifically, the respondent contends that he never signed the agreement referenced by the petitioner.

The court held that at the stage of adjudicating a petition under Section 11 of the Act, it is not necessary to delve into contentions regarding the existence of an arbitration agreement or the arbitrability of claims. The court emphasizes that its jurisdiction is limited to determining the prima facie existence of an arbitration agreement. The final adjudication, including on arbitrability issues, is to be left to the arbitral tribunal chosen by the parties.

The Court observed that it may intervene only when the dispute is evidently not arbitrable. It emphasized that an agreement is prima facie established when it bears the signatures of the parties and is attested by a notary. Consequently, the Court granted the petition and appointed a arbitrator.