Prima facie arbitrability review is required before appointing an arbitrator when the contract contains an express excepted-matters clause.

At the Section 11 referral stage, the Court must conduct a limited prima facie review of arbitrability where the contract contains an express excepted-matters clause. If the dispute is manifestly non-arbitrable or plainly falls within the carve-out, the Court should not appoint an arbitrator without first examining the clause structure and the nature of the dispute. The governing principle is that referral courts may intervene at the threshold when the dispute is ex facie outside the arbitration agreement, even though arbitral tribunals are ordinarily the first forum on non-arbitrability questions.

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Issues: Whether, at the stage of Section 11 of the Arbitration and Conciliation Act, 1996, the Court must undertake a prima facie inquiry into arbitrability and the scope of an excepted-matters clause before appointing an arbitrator.

Analysis: The agreement contained a specific clause reserving disputes concerning certain contractual obligations for enforcement before a court of law, while another clause provided for arbitration for disputes not covered by that exception. The dispute therefore required a threshold determination on whether it fell within the carved-out category or within the arbitration clause. The Court relied on the settled principle that, although the arbitral tribunal is generally the preferred first authority on questions of non-arbitrability, the Court at the referral stage may intervene where it is manifest and ex facie clear that the dispute is non-arbitrable or outside the arbitration agreement. In such cases, the Court must not appoint an arbitrator without first conducting a limited prima facie review of the clause structure and the nature of the dispute.

Conclusion: The Court held that the High Court could not appoint arbitrators without first conducting a preliminary inquiry into whether the dispute was covered by the excluded category and whether it was arbitrable.

Ratio Decidendi: Where an agreement contains an express excepted-matters clause, the referral Court under Section 11 must undertake a limited prima facie scrutiny to decide whether the dispute is plainly non-arbitrable or falls outside the arbitration clause before appointing an arbitrator.

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