Prima facie referral under arbitration clause leaves assignment and non-signatory objections to the tribunal.

At the Section 11 stage, the court need only make a prima facie examination of the arbitration agreement's existence and width, not decide the merits or conduct a mini-trial. A broadly worded clause covering disputes arising out of, in connection with, or relating to the agreement was treated as sufficient for reference, while contested questions on transaction history, assignment, and the binding effect of non-signatories were left to the arbitral tribunal under competence-competence principles. The signatories, assignee, and non-signatories were referred to arbitration, with all jurisdictional objections and merits issues kept open for the arbitrator.

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Issues: (i) Whether the disputes raised fell within the scope of the arbitration clause in the share pledge agreement and were fit to be referred at the Section 11 stage; (ii) Whether the signatory parties, the assignee, and the non-signatories could be impleaded and referred to arbitration.

Issue (i): Whether the disputes raised fell within the scope of the arbitration clause in the share pledge agreement and were fit to be referred at the Section 11 stage?

Analysis: The arbitration clause was broadly framed to cover all disputes arising out of, in connection with, or relating to performance of the agreement. At the referral stage, the court's task is confined to a prima facie examination of the existence of an arbitration agreement, not a merits inquiry into the underlying claims. Questions whether the petitioner's asserted rights arose from the agreement, whether the transaction history created enforceable claims, and whether the rival contentions defeated arbitrability required a deeper factual and legal examination that was reserved for the tribunal under the principle of competence-competence.

Conclusion: The disputes were held referable to arbitration, and no ground was found to refuse reference at the Section 11 stage.

Issue (ii): Whether the signatory parties, the assignee, and the non-signatories could be impleaded and referred to arbitration?

Analysis: The signatory parties were bound by the arbitration agreement, and the assignment in favour of the assignee did not, at the referral stage, displace the need to examine pre-assignment disputes or the effect of the assignment itself. As regards the non-signatories, the court held that theories such as alter ego, direct benefit estoppel, third-party beneficiary, and intertwined transactions raised mixed questions of fact and law that should ordinarily be decided by the arbitral tribunal. The referral court was not to conduct a mini-trial or conclusively rule on whether the non-signatories were truly bound, but could prima facie refer them and leave jurisdictional objections open.

Conclusion: The signatories, the assignee, and the non-signatories were referred to arbitration, with liberty to raise jurisdictional objections before the arbitrator.

Final Conclusion: The petition was allowed and an independent sole arbitrator was appointed to adjudicate the disputes, while leaving all objections on jurisdiction, arbitrability, and merits open for determination by the arbitral tribunal.

Ratio Decidendi: At the Section 11 stage, the court need only prima facie examine the existence and width of the arbitration agreement and should ordinarily refer contested questions on arbitrability, assignment, and the binding effect on non-signatories to the arbitral tribunal under competence-competence principles.

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