An arbitration agreement is only as useful as the tribunal that gives it effect. Section 11[1] of the Arbitration and Conciliation Act, 1996 came into existence to resolve the dispute or the deadlock that arises when the respondent either stalls or refuses to nominate its arbitrator.

This blog explains how the Section 11 arbitration mechanism works, the arbitrator appointment procedure in India under Section 11(6)[2], the governing limitation period, and the Supreme Court decisions that define how far and how deep a court may look before referring parties to arbitration.

The Scheme of Section 11: Party Autonomy First

Section 11 treats judicial appointments only as a fallback and gives primacy to party autonomy. Under Section 11(2)[3], the parties may agree to their own appointment procedure, subject to the mandatory rule in Section 11(1)[4] that the number of arbitrators must not be even. Hence, only when that procedure fails, or when none was agreed, may a party move the court. The object of Section 11 is thus narrow, i.e., to constitute the tribunal and not to decide the dispute.

When can you Approach the Court? the Triggers Under Sections 11

The right to seek a court appointment accrues only upon a specified failure:

  1. When a party fails to appoint its arbitrator within thirty days of a request, or when the two appointed arbitrators fail to agree on the presiding arbitrator within thirty days as provided under Section 11(4)[5 ]for a three-member tribunal.
  2. When the parties fail to agree on a single arbitrator within thirty days of a request from one party to the other, as per Section 11(5)[6] of the Act.
  3. In the event of failure of the agreed procedure, it is triggered when a party, the two arbitrators, or a person or institution entrusted with a function under the agreed procedure fails to perform it. Thus, Section 11(6)[7] is the residual safeguard against a party frustrating arbitration through inaction.

In addition, a Section 11 application for arbitration must be preceded by a valid notice invoking arbitration under Section 21[8]. Further, the cause of action to approach the court arises only when the opposite party fails to act within the thirty-day window after that notice. The same was reiterated by the Hon’ble Supreme Court in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV)[9] 2024 INSC 857  that Section 21 invocation and the respondent’s subsequent failure are pre-conditions to the court’s jurisdiction.

Explore More: Section 21 Of The Arbitration And Conciliation Act

Limitation for a Section 11 Application

While the Act prescribes no explicit limitation period, the Hon’ble Supreme Court has produced a distinct line of authority. In Bharat Sanchar Nigam Ltd. v. Nortel Networks India Pvt. Ltd[10]. AIRONLINE 2021 SC 279. The Hon’ble Court held that the limitation for a Section 11 application is governed by the residuary Article 137 of the Limitation Act, 1963 i.e., three years from when the right to reply accrues on failure to appoint within thirty days of the Section 21 notice, and that a court may decline to appoint where claims are ex facie hopelessly time-barred. Further, in  M/s Arif Azim Co. Ltd. v. M/s Aptech Ltd[11]. INSC 155 , the Hon’ble Court separated two inquiries, first, whether the petition is within three years, and whether the underlying claim is itself alive and also urged the Parliament to prescribe a shorter period. While, in  SBI General Insurance Co. Ltd. v. Krish Spinning 2024 INSC 532,[12] the Apex Court confined the referral court to checking that the application is in time, leaving the limitation of claims to the tribunal.

How Far can the Court Look? the Narrowing Scope of Judicial Scrutiny

Over the course of time, the role of the courts has narrowed through legislative amendments and judicial pronouncements.

The Hon’ble Supreme Court in Konkan Railway Corpn. Ltd. v. Rani Construction Pvt. Ltd.[13] (2002) 2 SCC 388, by a 5-Judge Bench, held that the power of the Chief Justice under the unamended Section 11 was purely administrative, not judicial or quasi-judicial.

This view was overruled by a seven-Judge Bench in SBP & Co. v. Patel Engineering Ltd(2005) 8 SCC 618 by holding the power to be judicial. This thus allowed the Chief Justice or his designate to decide a range of issues: whether a valid arbitration agreement existed, whether the applicant had approached the court with territorial jurisdiction, whether the claim was a live and subsisting one, and whether the conditions for the exercise of the power were satisfied.

Statutorily, the 2015 Amendment[14] inserted Section 11(6-A), which directed the Supreme Court or High Court, “notwithstanding any judgment, decree or order of any court,” to confine its examination solely to the existence of an arbitration agreement. The provision was a deliberate legislative reversal of the Patel Engineering case, designed to strip the reference stage of its adjudicatory character and restore kompetenz-kompetenz (Section 16) as the default.

This addition was affirmed by the Hon’ble Supreme Court in Duro Felguera S.A. v. Gangavaram Port Ltd.[15](2017) 9 SCC 729 wherein it held that the court’s role is now confined to a “nothing more, nothing less” inquiry into whether an arbitration agreement exists and that an elaborate examination of merits or contested facts is no longer permissible and in Mayavati Trading Pvt. Ltd. v. Pradyuat Deb Burman[16] 8 SCC 714 wherein the court reaffirmed Duro Felguera to settle that the enquiry is limited to the existence of the arbitration agreement.

In Vidya Drolia v. Durga Trading Corpn.[17]  (2021) 2 SCC 1  the court refined the position taken by the court in Duro Felguera and Mayavati Trading by addressing arbitrability. It laid down the “eye of the needle” test to examine claims under Section 11 and propounded a two-pronged test at the stage of referral:

The first prong is limited to a prima facie review to examine the existence and validity of an arbitration agreement, while the second prong requires the courts to weed out manifestly non-arbitrable and meritless claims.

In SBI General Insurance Co. Ltd v. Krish Spinning, the court, by relying upon the landmark decision of a seven-judge bench in In Re: Interplay Between Arbitration Agreements and the Indian Stamp Act, 1899[18] clarified the scope of examination under Section 11 by holding that at the pre-referral stage, the court has to satisfy itself “only” to a prima facie existence of an arbitration clause between the parties and leave all other questions to the tribunal.

Possible Outcomes of a Section 11 Application

The Court’s limited enquiry, thus, can lead to one of three results: Firstly, it may appoint the sole or presiding arbitrator, or constitute the tribunal, on a prima facie finding that an agreement exists and the application is in time; Secondly, it may delegate the appointment to a designated person or institution following any chosen rules; thirdly, it may refuse the application where no arbitration agreement prima facie exists, the application is time-barred, or the claim is ex facie dead.

Conclusion

Section 11 acts as the bridge between a stalled arbitration agreement and a functioning tribunal. The legislative actions since 2015, supported by a line of Supreme Court authority from Duro Felguera to Krish Spinning, have limited the court’s role to a swift, prima facie examination of whether an arbitration agreement exists and whether the application is in time, and have left all substantive questions to the arbitrator. Hence, for a party facing an obstructive counterparty, a Section 21 notice followed by a timely and well-pleaded application remains the best route to securing the appointment of an arbitrator and getting the dispute moving.

Author: Mahima Rathore, Associate
Co-Author : Aditi Chauhan, Intern

  1. https://indiankanoon.org/doc/1841764/
  2. https://indiankanoon.org/doc/605764/
  3. https://indiankanoon.org/doc/1868040/
  4. https://indiankanoon.org/doc/1956362/
  5. https://indiankanoon.org/doc/1067630/
  6. https://indiankanoon.org/doc/401357/
  7. https://indiankanoon.org/doc/605764/
  8. https://indiankanoon.org/doc/138599/
  9. https://indiankanoon.org/doc/118956979/
  10. https://indiankanoon.org/doc/127312055/
  11. https://indiankanoon.org/doc/171443079/
  12. https://api.sci.gov.in/supremecourt/2019/28531/28531_2019_1_1502_57055_Judgement_08-Nov-2024.pdf
  13. https://indiankanoon.org/doc/1999671/
  14. https://prsindia.org/files/bills_acts/acts_parliament/2015/the-arbitration-and-conciliation-(amendment)-act,-2015.pdf
  15. https://indiankanoon.org/doc/197363957/
  16. https://indiankanoon.org/doc/43502055/
  17. https://indiankanoon.org/doc/121987320/
  18. https://indiankanoon.org/doc/139003074/

FAQs

Which court can be approached for the appointment of an arbitrator under Section 11?

It depends on the nature of the arbitration. In an international commercial arbitration, the application lies before the Supreme Court. In a domestic arbitration, it lies before the High Court that has jurisdiction over the subject matter, as provided under Section 11(12). The court may hear the matter itself or have it decided by a person or institution it designates.

Yes, but only if you file it before they make the appointment. In Datar Switchgear Ltd. v. Tata Finance Ltd. (2000) 8 SCC 151, the Hon’ble Supreme Court held that the thirty-day period is not a rigid cut-off in cases under Section 11(6). The defaulting party can still appoint after thirty days, as long as it does so before the other side moves the court. Once a Section 11 application is filed, that right is lost.

Under Section 11(13), inserted by the 2015 Amendment, the court must try to dispose of the application within sixty days from the date the notice is served on the opposite party.

No. In Re: Interplay Between Arbitration Agreements and the Indian Stamp Act, 1899, the seven-Judge Bench held that an unstamped or insufficiently stamped agreement is not void. It is only inadmissible in evidence, and the defect can be cured. The question of stamping falls within the tribunal’s domain, and the referral court must not impound the instrument or decline the reference on that ground.

Yes. Under Section 11(8), the court must seek a written disclosure from the prospective arbitrator under Section 12(1), in the format set out in the Sixth Schedule. The court must also give due regard to any qualifications required by the agreement, and to factors that are likely to secure the appointment of an independent and impartial arbitrator.