Arbitration clause disputes stay referable despite validity and forgery objections, which belong before the arbitral tribunal.

Where a memorandum of understanding contains an arbitration clause, disputes over non-completion of performance are referable to arbitration, and the Court at the Section 11(6) stage will appoint an arbitrator rather than decide contested issues about validity, alleged alteration of terms, or alleged forgery of authority. Those objections go to the existence or validity of the arbitration agreement and the contract, and are for the arbitral tribunal to examine under Section 16. The dispute was therefore referred to arbitration, with the appointed arbitrator to decide all disputes between the parties.

---

---

Issues: Whether the disputes arising out of the memorandum of understanding were liable to be referred to arbitration under Section 11(6), and whether objections concerning the validity of the agreement, alleged alteration of terms, and alleged forgery of authority could be examined at the stage of appointment of an arbitrator.

Analysis: The memorandum of understanding contained an arbitration clause providing for reference of disputes to arbitration in New Delhi. The dispute between the parties related to non-completion of the sale and delivery of the helicopter and to the petitioner's entitlement to performance of the agreement. The objections raised by the respondent concerning termination of an earlier arrangement, alleged alteration of clauses, and alleged forgery of the power of attorney were held to be matters that could not be decided in proceedings under Section 11(6). Those issues fell within the arbitral tribunal's competence under Section 16, including objections to the existence or validity of the arbitration agreement and the contract.

Conclusion: The dispute was held referable to arbitration, and an arbitrator was appointed to decide all disputes between the parties.

Ratio Decidendi: At the stage of appointment under Section 11(6), the Court will refer the dispute to arbitration where an arbitration clause exists, leaving objections as to validity, authority, or contractual alterations to be decided by the arbitral tribunal under Section 16.

---