$~10 * IN THE HIGH COURT OF DELHI AT NEW DELHI [ Date of Decision: 10.02.2026 + ARB.P. 2058/2025 MONEYWISE FINANCIAL SERVICES PVT LTD .....Petitioner Through: Ms. Arunima Sinh Jadaun, Advocate. versus MR ANKIT SINGH PROPREITOR OF FOOTOX FOOTWEAR AND ORS .....Respondents Through: None. CORAM: HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL) 1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 [“Act”], seeking the appointment of an Arbitrator in terms of the Loan Agreement [“Agreement”] dated 15.07.2023 on the ground that certain disputes have arisen inter se the parties in accordance with Clause 8.2 of the Agreement as between the parties. Clause 8.2 of the Agreement reads as follows: "8.2. Arbitration: Any disputes, differences, controversies and questions directly or indirectly arising at any time hereafter between the Parties or their respective representatives or assigns, arising out of or in connection with this Agreement or the subject matter of this Agreement), including, without limitation, any question regarding its existence, validity, interpretation, construction, performance, enforcement, rights and liabilities of the Parties, or termination ("Dispute") thereof shall be finally settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996, as amended ("Arbitration Act"). The Dispute shall be referred to a sole arbitrator duly appointed by the Parties with mutual consent failing which the sole arbitrator shall be appointed in accordance with the Arbitration Act. The language of the arbitration shall be English. The seat of the arbitration shall be at Delhi and the language of proceedings shall be English. The award rendered shall be in writing and shall set out the reasons for the arbitrator's decision. The costs and expenses of the arbitration shall be borne equally by each Party, with each Party paying for its own fees and costs including attorney fees, except as may be determined by the arbitration." 2. The material on record indicates that pursuant to the disputes that arose between the parties, a Notice under Section 21 of the Act dated 3.09.2025 was issued by the Petitioner. The same is annexed to the present Petition as “Document-4.” 3. Hence, the petitioner has approached this court by way of the present Petition seeking the appointment of a sole Arbitrator. 4. Before adverting to the submissions, this Court is cognizant of the scope of interference at the stage of a Petition under Section 11 of the Act. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the Act has been fairly well settled. A Coordinate bench of this Court, in Pradhaan Air Express Pvt Ltd v. Air Works India Engineering Pvt Ltd [2025 SCC OnLine Del 3022], has extensively dealt with the scope of interference at the stage of Section 11. The Court held as under:- “ 9. The law with respect to the scope and standard of judicial scrutiny under Section 11(6) of the 1996 Act has been fairly well settled. The Supreme Court in the case of SBI General Insurance Co. Ltd. v. Krish Spinning,1 while considering all earlier pronouncements including the Constitutional Bench decision of seven judges in the case of Interplay between Arbitration Agreements under the Arbitration & Conciliation Act, 1996 & the Indian Stamp Act, 1899, In re2 has held that scope of inquiry at the stage of appointment of an Arbitrator is limited to the extent of prima facie existence of the arbitration agreement and nothing else. 10. It has unequivocally been held in paragraph no. 114 in the case of SBI General Insurance Co. Ltd. that observations made in Vidya Drolia v. Durga Trading Corpn.,3 and adopted in NTPC Ltd. v. SPML Infra Ltd.,4 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 not apply after the decision of Re : Interplay. The abovenoted paragraph no. 114 in the case of SBI General Insurance Co. Ltd. reads 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).” 11. Ex-facie frivolity and dishonesty are the issues, which have been held to be within the scope of the Arbitral Tribunal which is equally capable of deciding upon the appreciation of evidence adduced by the parties. While considering the aforesaid pronouncements of the Supreme Court, the Supreme Court in the case of Goqii Technologies (P) Ltd. v. Sokrati Technologies (P) Ltd.,5 however, has held that the referral Courts under Section 11 must not be misused by one party in order to force other parties to the arbitration agreement to participate in a time-consuming and costly arbitration process. Few instances have been delineated such as, the adjudication of a non-existent and malafide claim through arbitration. The Court, however, in order to balance the limited scope of judicial interference of the referral Court with the interest of the parties who might be constrained to participate in the arbitration proceedings, has held that the Arbitral Tribunal eventually may direct that the costs of the arbitration shall be borne by the party which the Arbitral Tribunal finds to have abused the process of law and caused unnecessary harassment to the other parties to the arbitration. 12. It is thus seen that the Supreme Court has deferred the adjudication of aspects relating to frivolous, non-existent and malafide claims from the referral stage till the arbitration proceedings eventually come to an end. The relevant extracts of Goqii Technologies (P) Ltd. reads as under:— “20. As observed in Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg., (2024) 12 SCC 1 : 2024 INSC 532], 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. 21. Before we conclude, we must clarify that the limited jurisdiction of the referral courts under Section 11 must not be misused by parties in order to force other parties to the arbitration agreement to participate in a time consuming and costly arbitration process. This is possible in instances, including but not limited to, where the claimant canvasses the adjudication of non-existent and mala fide claims through arbitration. 22. With a view to balance the limited scope of judicial interference of the referral courts with the interests of the parties who might be constrained to participate in the arbitration proceedings, the Arbitral Tribunal may direct that the costs of the arbitration shall be borne by the party which the Tribunal ultimately finds to have abused the process of law and caused unnecessary harassment to the other party to the arbitration. Having said that, it is clarified that the aforesaid is not to be construed as a determination of the merits of the matter before us, which the Arbitral Tribunal will rightfully be equipped to determine.” 13.  In view of the aforesaid, the scope at the stage of Section 11 proceedings is akin to the eye of the needle test and is limited to the extent of finding a prima facie existence of the arbitration agreement and nothing beyond it. The jurisdictional contours of the referral Court, as meticulously delineated under the 1996 Act and further crystallised through a consistent line of authoritative pronouncements by the Supreme Court, are unequivocally confined to a prima facie examination of the existence of an arbitration agreement. These boundaries are not merely procedural safeguards but fundamental to upholding the autonomy of the arbitral process. Any transgression beyond this limited judicial threshold would not only contravene the legislative intent enshrined in Section 8 and Section 11 of the 1996 Act but also risk undermining the sanctity and efficiency of arbitration as a preferred mode of dispute resolution. The referral Court must, therefore, exercise restraint and refrain from venturing into the merits of the dispute or adjudicating issues that fall squarely within the jurisdictional domain of the arbitral tribunal. It is thus seen that the scope of enquiry at the referral stage is conservative in nature. A similar view has also been expressed by the Supreme Court in the case of Ajay Madhusudan Patel v. Jyotrindra S. Patel.” 5. Learned counsel appearing for the Petitioner draws the attention of this Court to the affidavit of service along with its annexures, which reflect that the Respondents have been duly served through e-mail, WhatsApp, as well as speed post. 6. Despite service, none has appeared on behalf of the Respondents. On the previous date of hearing, this Court had adjourned the matter on account of the non-appearance of the Respondents. 7. In view of the aforesaid facts and circumstances, this Court is of the opinion that there is no impediment in referring the disputes between the parties to arbitration by appointment of a sole Arbitrator. 8. Learned counsel appearing on behalf of the Petitioner submits that the approximate value of the subject matter of the disputes is Rs. 20 lacs. 9. Accordingly, Dr. N.P. Kaushik, Former District and Sessions Judge, (e-mail: xxxxxxxxxx & Mobile No. xxxxxxxxxxxxx), is appointed as the Arbitrator to adjudicate the disputes inter se the parties. 10. The Registry is directed to send a copy of this order to the learned Arbitrator through all permissible modes, including through e- mail. 11. The learned sole Arbitrator may proceed with the arbitration proceedings, subject to furnishing to the parties the requisite disclosures as required under Section 12(2) of the Act. 12. The learned sole Arbitrator shall be entitled to a fee in accordance with the Fourth Schedule of the Act or as may otherwise be agreed to between the parties and the learned sole Arbitrator. 13. The parties shall share the learned sole Arbitrator’s fee and arbitral costs equally. 14. All rights and contentions of the parties in relation to the claims/counter-claims are kept open, to be decided by the learned Arbitrator on their merits, in accordance with law. 15. Needless to say, nothing in this order shall be construed as an expression of opinion of this Court on the merits of the controversy between the parties. 16. Accordingly, the present Petition, along with all pending Application(s), if any, is disposed of in the aforesaid terms. HARISH VAIDYANATHAN SHANKAR, J FEBRUARY 10, 2026/ v/her/jk ARB.P. 2058/2025 Page 5 of 6