Section 11 referral to arbitration cannot be refused unless non-arbitrability is clear on the face of the record.

Under Section 11 of the Arbitration and Conciliation Act, the HC held that appointment of an arbitrator cannot be refused unless non-arbitrability is ex facie clear. Where the objection depends on contested questions, such as whether claims were extinguished by an approved resolution plan or survived insolvency proceedings, the issue requires merits adjudication and is not fit for summary determination at the referral stage. Applying the principle that doubts should be resolved in favour of arbitration, the Court rejected the threshold objection and allowed the petition, directing constitution of the arbitral tribunal subject to statutory disclosure and eligibility requirements.

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Issues: Whether, in a petition under Section 11 of the Arbitration and Conciliation Act, 1996, the Court should decline appointment of an arbitrator on the ground that the disputes are said to stand extinguished under the approved resolution plan and are therefore allegedly non-arbitrable.

Analysis: The scope of examination under Section 11 is confined primarily to the existence of an arbitration agreement, and the Court will decline reference only in exceptional cases where non-arbitrability is ex facie clear. Where the objection depends on a contentious question whether the claims are post-insolvency claims or whether they survive the resolution plan, the issue is not one fit for summary adjudication at the Section 11 stage. The dispute here turned on whether the liability asserted by the petitioner stood extinguished by the resolution process or remained enforceable, which required adjudication on merits. Applying the principle that, when in doubt, parties should be referred to arbitration, the Court held that the controversy could not be rejected at the threshold.

Conclusion: The objection to appointment of an arbitrator was rejected and the dispute was directed to arbitration.

Final Conclusion: The petition was allowed and an arbitrator was appointed on behalf of the respondent, subject to the statutory disclosure and eligibility requirements, so that the arbitral tribunal could be constituted.

Ratio Decidendi: In a Section 11 proceeding, if non-arbitrability is not manifest and the objection depends on a contested issue requiring adjudication, the Court should refer the parties to arbitration rather than decide the dispute at the threshold.

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