Delhi High Court Appoints Sole Arbitrator to Resolve Disputes Arising from Distribution Agreement; Reiterates Limited Scope of Judicial Examination Under Section 11 of Arbitration Act

Case Note | Arbitration and Conciliation Act, 1996 | Appointment of Sole Arbitrator | Existence of Arbitration Agreement | Arbitrability and Jurisdiction

Court: High Court of Delhi at New Delhi
Coram: Hon’ble Mr. Justice Om Prakash Shukla
Case: ARB.P. 1099/2026
Date of Decision: 05 November 2026
Provision Involved: Section 11 of the Arbitration and Conciliation Act, 1996
Nature of Decision: Petition for appointment of Sole Arbitrator
Outcome: Petition disposed of; Sole Arbitrator appointed.

Introduction

The Delhi High Court, while exercising its jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Arbitration Act), has reiterated that the scope of judicial examination at the stage of appointment of an arbitrator is limited primarily to determining the prima facie existence of a valid arbitration agreement.

In the present matter, the Court considered a petition arising out of disputes concerning non-payment of contractual dues under a Distribution Agreement dated 19 April 2018. Since both parties agreed that their disputes could be referred to arbitration and the existence of the arbitration clause was undisputed, the Court proceeded to appoint a Sole Arbitrator.

The judgment is significant in reaffirming the principle that the Section 11 proceedings are not intended to become a forum for adjudicating the substantive contractual disputes between the parties. Questions concerning impleadment, arbitrability and jurisdiction were expressly left open for determination by the Arbitral Tribunal.

Factual Background

The petitioner approached the Delhi High Court by filing a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator for resolution of disputes arising out of a Distribution Agreement executed between the parties on 19 April 2018.

The grievance of the petitioner was that the respondent had allegedly failed to make payment of contractual dues arising under the said Distribution Agreement. The alleged non-payment resulted in disputes between the parties, necessitating invocation of the arbitration mechanism contemplated under the agreement.

During the proceedings, learned counsel appearing on behalf of both parties submitted that they were ad idem, namely, in agreement that the disputes could be referred to arbitration for adjudication.

The Court, therefore, proceeded to examine the arbitration clause contained in Clause M of the Distribution Agreement.

Arbitration Clause: Clause M of the Distribution Agreement

The arbitration agreement was incorporated in Clause M, titled Governing Law and Competent Courts, which provided that:

“Any dispute arising from or in connection with this Agreement shall be referred to and finally resolved by arbitration by a sole arbitrator nominated by Managing Director of adidas.”

The clause further stipulated that:

1. The agreement would be governed by Indian law.
2. The arbitration proceedings would be governed by the Arbitration and Conciliation Act, 1996, including amendments or re-enactments.
3. The place of arbitration would be New Delhi.
4. The High Court of Delhi alone would have jurisdiction.
5. The language of arbitration would be English.
6. Courts at New Delhi would have sole and exclusive jurisdiction.

The Court noted that there was no dispute between the parties regarding the existence of a valid arbitration clause.

Issues Before the Court

The principal question before the Delhi High Court was whether, in view of the existence of an undisputed arbitration agreement and the consent of both parties to refer their disputes to arbitration, a Sole Arbitrator could be appointed under Section 11 of the Arbitration Act.

The proceedings also raised an important question concerning the limited scope of judicial scrutiny at the stage of appointment of an arbitrator, particularly when substantive disputes relating to the contractual relationship remained unresolved.

Court’s Observations and Legal Analysis

1. Limited scope of examination under Section 11

The Court observed that the legal position governing the exercise of jurisdiction under Section 11 of the Arbitration Act was well settled.

The scope of enquiry at this stage is confined to examining the prima facie existence of an arbitration agreement.

In the present case, the arbitration clause was expressly incorporated in Clause M of the Distribution Agreement dated 19 April 2018. Further, neither party disputed the existence or validity of the arbitration clause.

Consequently, the Court found no impediment to appointing a Sole Arbitrator for adjudication of the disputes.

This approach reflects the legislative objective of ensuring that arbitration proceedings are not unnecessarily delayed by extensive judicial examination at the referral stage.

2. Appointment of Sole Arbitrator

Taking into consideration the existence of the arbitration agreement and the consensus between the parties, the Court appointed Ms. Iram Majid, Advocate, as the Sole Arbitrator to adjudicate the disputes arising between the parties.

The learned Arbitrator was directed to enter upon the reference within three weeks from the date of the judgment.

The appointment was made to facilitate the commencement of arbitral proceedings in accordance with the agreed dispute-resolution mechanism.

3. Disclosure under Section 12(2) of the Arbitration Act

The Court further directed that the learned Sole Arbitrator would proceed with the arbitration proceedings subject to furnishing the requisite disclosures contemplated under Section 12(2) of the Arbitration Act within three weeks of entering upon the reference.

This direction reinforces the importance of transparency, impartiality and independence in arbitral proceedings.

The statutory disclosure requirements enable parties to assess whether any circumstances exist that may give rise to justifiable doubts regarding the independence or impartiality of the arbitrator.

4. Arbitration under the aegis of DIAC

The Court directed that the arbitration proceedings would be conducted under the rules and aegis of the Delhi International Arbitration Centre (DIAC).

It was further directed that the learned Arbitrator would be entitled to fees in accordance with the Schedule of Fees maintained by DIAC.

The reference to an institutional arbitration framework provides procedural structure and facilitates the efficient conduct of arbitral proceedings.

5. Liberty to raise objections before the Arbitral Tribunal

One of the important aspects of the judgment is the liberty expressly granted to the parties to raise all permissible pleas before the learned Arbitrator.

The Court clarified that the parties would remain at liberty to raise objections, including:

• Objections concerning impleadment of necessary or proper parties.
• Objections relating to the arbitrability of the disputes.
• Objections concerning the jurisdiction of the Arbitral Tribunal.
• Any other permissible legal or factual pleas arising from the disputes.

The learned Arbitrator was directed to consider such objections in accordance with law.

This observation is particularly relevant because the appointment of an arbitrator does not amount to a final determination of the jurisdictional or substantive issues arising between the parties.

6. Appointment does not prejudge the merits of the dispute

The Court specifically clarified that its observations were confined to deciding the petition under Section 11 of the Arbitration Act.

The learned Arbitrator was required to adjudicate the disputes independently and on their own merits, without being influenced by any observations made in the judgment.

Thus, the Court maintained a clear distinction between the limited judicial function of appointing an arbitrator and the adjudicatory function of the Arbitral Tribunal.

Operative Directions

The Delhi High Court accordingly passed the following directions:

1. Ms. Iram Majid, Advocate, was appointed as the Sole Arbitrator.
2. The Arbitrator was directed to enter upon the reference within three weeks.
3. The requisite disclosures under Section 12(2) of the Arbitration Act were to be furnished within three weeks of entering upon the reference.
4. The arbitration proceedings were to be conducted under the rules and aegis of DIAC.
5. The Arbitrator’s fees would be governed by the DIAC Schedule of Fees.
6. The parties were granted liberty to raise objections concerning impleadment, arbitrability, jurisdiction and other permissible issues before the Arbitral Tribunal.
7. The Arbitrator was directed to decide the disputes independently and uninfluenced by the observations made in the Section 11 proceedings.

The petition was accordingly disposed of.

Legal Significance and Commentary

A. Section 11 is not a forum for adjudication of contractual claims

The judgment underscores the distinction between the jurisdiction exercised by the High Court under Section 11 and the jurisdiction exercised by an Arbitral Tribunal while adjudicating the underlying disputes.

In a petition under Section 11, the Court is not required to undertake a detailed examination of the alleged breach of contract, the liability of the respondent or the quantum of outstanding contractual dues.

Such matters fall within the domain of the Arbitral Tribunal, subject to the terms of the arbitration agreement and applicable law.

The petitioner’s allegation of non-payment of contractual dues was, therefore, appropriately left for adjudication in arbitration.

B. Reinforcement of the kompetenz-kompetenz principle

The judgment also reflects the principle of kompetenz-kompetenz, which recognises the authority of an Arbitral Tribunal to rule on its own jurisdiction.

Section 16 of the Arbitration Act expressly empowers the Arbitral Tribunal to rule on its own jurisdiction, including objections concerning the existence or validity of the arbitration agreement.

By preserving the parties’ right to raise jurisdictional and arbitrability objections before the Arbitrator, the Court respected the statutory framework governing arbitral jurisdiction.

C. Judicial restraint promotes the object of arbitration

The limited scope of examination under Section 11 is intended to prevent unnecessary judicial intervention at the threshold of arbitration.

An elaborate examination of every contractual dispute at the appointment stage would undermine the very purpose for which parties agree to resolve disputes through arbitration.

The present judgment adopts an approach consistent with the objective of facilitating arbitration and ensuring that disputes are adjudicated by the forum chosen or contemplated by the parties.

D. Institutional arbitration and procedural certainty

The reference of the matter to DIAC is another noteworthy feature.

Institutional arbitration provides an established procedural framework for conducting proceedings, administering references and determining arbitral fees.

The Court’s direction ensures that the arbitration will proceed under an organised institutional mechanism rather than through an entirely ad hoc arrangement.

Relevant Statutory Provisions

Provision	Legal significance
Section 11	Appointment of arbitrators
Section 12	Grounds for challenge and disclosure requirements
Section 16	Competence of Arbitral Tribunal to rule on its jurisdiction
Section 7	Definition and requirements of an arbitration agreement

Conclusion

The judgment in ARB.P. 1099/2026 reiterates the settled legal position that the jurisdiction of the High Court under Section 11 of the Arbitration and Conciliation Act, 1996, is limited at the referral stage and does not extend to adjudicating the substantive disputes arising out of the underlying commercial agreement.

Where the existence of an arbitration agreement is undisputed and the parties are agreeable to referring their disputes to arbitration, the Court may facilitate the commencement of arbitral proceedings by appointing a Sole Arbitrator without undertaking an unnecessary examination of the merits of the controversy.

Equally important is the Court’s decision to preserve the parties’ right to raise objections concerning jurisdiction, arbitrability and impleadment before the Arbitral Tribunal.

The judgment thus reinforces the principles of party autonomy, minimal judicial intervention and procedural efficiency, which constitute the foundation of the arbitration regime in India.

The underlying message of the judgment is clear: the function of the Court at the stage of Section 11 is to facilitate the constitution of the Arbitral Tribunal, while the adjudication of the contractual controversy must ordinarily be left to the Arbitrator in accordance with law.

Editorial note: This article is prepared on the basis of the judgment text supplied. Before publication in a law journal, the complete cause title, names of the parties, date of filing and any reported citation should be verified from the authenticated judgment. The distinction between the statutory disclosure requirements under Sections 12(1), 12(2) and 12(5) should also be maintained while discussing arbitrator independence and impartiality.