Section 11 arbitration inquiry remains limited to existence of clause; insolvency alone does not bar arbitrator appointment.

At the Section 11 stage, the court's enquiry is limited to checking whether an arbitration agreement exists. Where the arbitration clause is admitted and covers disputes arising out of or in connection with the contract, a sole arbitrator may be appointed. Pending insolvency proceedings do not, by themselves, bar appointment of an arbitrator unless a moratorium or other legal restraint is shown on record. Objections to jurisdiction or arbitrability may be raised before the arbitrator under Section 16. On these principles, the petition for appointment of an independent sole arbitrator was maintainable and the dispute was referred to arbitration.

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Issues: (i) Whether, in a petition under Section 11 of the Arbitration and Conciliation Act, 1996, a sole arbitrator could be appointed where the arbitration agreement was admitted and no moratorium or legal bar arising from the pending insolvency proceedings was shown.

Analysis: The scope of examination at the Section 11 stage is confined to verifying the existence of an arbitration agreement. The agreement between the parties contained a clear arbitration clause covering disputes arising out of or in connection with the loan agreement. A notice invoking arbitration had been issued under Section 21 of the Arbitration and Conciliation Act, 1996, and there was no dispute on the existence of the arbitration clause. The pendency of insolvency proceedings did not, by itself, bar the present petition, as no moratorium or order preventing arbitration was brought on record. In these circumstances, an independent arbitrator was required to be appointed. Any objection as to jurisdiction or arbitrability could be raised before the arbitrator under Section 16 of the Arbitration and Conciliation Act, 1996.

Conclusion: The petition for appointment of a sole arbitrator was maintainable and was allowed; the dispute was referred to arbitration before an independent sole arbitrator.

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