A Section 11 court must leave limitation of underlying claims to the arbitrator.

The petitioner, a fabric supplier, claimed that goods supplied to the respondent between September 2019 and August 2021 remained unpaid, leaving ₹19,88,360 outstanding.

The challans contained an arbitration clause referring disputes to arbitration through the Delhi Hindustani Mercantile Association. After the respondent obtained a reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, the petitioner invoked arbitration by notice dated 23 July 2026 and filed this Section 11(6) petition on 14 August 2026.

The respondent objected that the underlying claims were time-barred, but consented to appointment of an independent arbitrator and proposed DIAC as the administering institution; the petitioner did not oppose that proposal.

1. Whether the respondent’s objection that the underlying claims were time-barred prevented the Court from appointing an arbitrator under Section 11(6).

2. Whether, by mutual consent, the parties could replace the institution named in the arbitration clause with DIAC as the institution administering the arbitration.

Section 11(6A) of the Arbitration and Conciliation Act, 1996 confines the referral court’s examination to the existence of an arbitration agreement.

In In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, (2024) 6 SCC 1, the Supreme Court held that this examination is prima facie and does not require a laborious or contested inquiry.

In SBI General Insurance Co. Ltd. v. Krish Spinning, (2024) 12 SCC 1, the Court held that, at the Section 11 stage, the referral court may examine whether the Section 11 petition itself is within limitation, but should not conduct an intricate evidentiary inquiry into whether the underlying claims are time-barred; that question is for the arbitrator.

The Court also relied on Shaf Broadcast (P) Ltd. v. Doordarshan, (2019) 10 SCC 447, which supports modification of an arbitration arrangement by mutual consent recorded in court.

The arbitration agreement’s existence was undisputed, and the Section 11 petition had been filed in 2026 after the arbitration notice issued that year.

The respondent’s limitation objection concerned the underlying claims and required consideration of the pleaded running account and payments—matters involving fact and law that the arbitrator, rather than the referral court, should decide.

Since both parties agreed to DIAC administration, their consent permitted that aspect of the arbitration arrangement to be modified, while leaving the seat at Delhi unchanged.

The arbitration is to proceed under the aegis of, and in accordance with the rules of, DIAC, subject to the arbitrator’s disclosures under Section 12.

The arbitrator must decide the respondent’s limitation objection as a preliminary issue at the outset; all other rights and contentions were left open.