Pre-arbitral consultation and unstamped contract objections do not bar arbitration where the arbitration agreement exists.

Arbitration may be invoked where the contractual pre-arbitral consultation process has been sufficiently attempted and the record shows no effective response to requests for negotiation. At the Section 11 referral stage, the court's enquiry is confined to whether an arbitration agreement exists; an objection that the underlying sub-contract is unstamped does not prevent appointment of an arbitrator where the arbitration clause itself is undisputed. The stamp-duty issue may be raised before the arbitrator, including for impounding if required, because the Stamp Act is a fiscal measure and should not be used to defeat arbitration on a technicality.

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Issues: (i) Whether invocation of arbitration was premature for compliance with the pre-arbitral negotiation procedure; (ii) Whether a sole arbitrator could be appointed under Section 11 when the arbitration clause was contained in an unstamped sub-contract.

Issue (i): Whether invocation of arbitration was premature for non-compliance with the pre-arbitral negotiation procedure.

Analysis: The arbitration clause contemplated resolution through negotiation before final and binding arbitration. The Court accepted that the petitioner had, before invoking arbitration, made repeated requests for a meeting to resolve the dispute, and those requests were not met with any positive response. In that backdrop, the Court found that the contractual pre-arbitral consultation requirement had been sufficiently attempted and that the respondent's objection of prematurity was unsupported by the record.

Conclusion: The objection of prematurity was rejected in favour of the petitioner.

Issue (ii): Whether a sole arbitrator could be appointed under Section 11 when the arbitration clause was contained in an unstamped sub-contract.

Analysis: The Court held that after the insertion of Section 11(6-A), the only enquiry at the referral stage is the existence of an arbitration agreement. Since the existence of the arbitration agreement was undisputed, insufficiency of stamp duty on the underlying contract did not prevent appointment of an arbitrator. The Court also treated the Stamp Act objection as a matter that could be raised before the arbitrator, including by impounding the document if necessary, and held that the Stamp Act is a fiscal measure and not a device for defeating arbitration on a technicality.

Conclusion: The unstamped-document objection did not bar appointment of an arbitrator, and the issue was decided in favour of the petitioner.

Final Conclusion: The petition succeeded and the disputes arising out of the sub-contract were referred to arbitration by appointment of a sole arbitrator.

Ratio Decidendi: Under Section 11(6-A) of the Arbitration and Conciliation Act, 1996, the referral court's enquiry is confined to the existence of an arbitration agreement, and an objection that the underlying contract is unstamped does not defeat appointment of an arbitrator where the arbitration agreement itself exists.

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