Arbitration agreement and sole arbitrator appointment confirmed where contract provided for dispute resolution by mutual agreement and arbitration.

The contract was held to contain a valid arbitration agreement because the incorporated letter of indent and contract documents provided for mutual discussion, conciliation, and then reference of disputes to an independent arbitrator, with Delhi as the seat and the Arbitration and Conciliation Act, 1996 applicable. Once that agreement was established, the Section 11 inquiry was limited to appointment, and because the parties had not constituted the tribunal by mutual agreement, judicial appointment was warranted. A sole arbitrator was therefore appointed, subject to the statutory disclosure and eligibility requirements governing arbitrators.

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Issues: (i) Whether the contract contained a valid arbitration agreement; (ii) Whether a sole arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.

Issue (i): Whether the contract contained a valid arbitration agreement.

Analysis: The contract documents, including the letter of indent incorporated as part of the agreement, contained an arbitration clause providing that disputes arising out of or touching the contract would first be resolved by mutual discussion and conciliation and, failing that, be referred to an independent arbitrator mutually agreed by the parties. The arbitration clause also specified Delhi as the seat and made the Arbitration and Conciliation Act, 1996 applicable. On that basis, the objection that no arbitration agreement existed was not sustainable.

Conclusion: The existence of an arbitration agreement was affirmed in favour of the petitioner.

Issue (ii): Whether a sole arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996.

Analysis: Once the existence of the arbitration agreement was established, the scope of inquiry under Section 11 was limited to appointment. As the parties had not been able to constitute the tribunal by mutual agreement, judicial appointment was warranted. The appointment was also to remain subject to the statutory disclosure and eligibility requirements governing arbitrators.

Conclusion: A sole arbitrator was appointed in favour of the petitioner.

Final Conclusion: The disputes were directed to arbitration and the proceedings were disposed of by appointing a sole arbitrator, subject to the statutory safeguards applicable to such appointment.

Ratio Decidendi: Where the contract, read as a whole, contains an arbitration clause and the parties fail to constitute the tribunal by mutual agreement, the court may appoint an arbitrator under Section 11, subject to the statutory disclosure and eligibility requirements.

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