Arbitration Referral Court Cannot Deicide Mixed Questions of Limitation or Fact Under Section 11(6).

The petitioner and respondents entered into a partnership via a deed dated 01.04.1996 under the name M/s Sachdeva Garments

In 2017, the petitioner alleged financial irregularities, including the omission of his name from balance sheets and non-payment of profits

The petitioner invoked the arbitration clause on 26.08.2017

Respondent No. 3 filed a civil suit, which was dismissed by the Municipal Magistrate, Jammu, under Section 8 of the Arbitration and Conciliation Act, referring the parties to arbitration

Respondent No. 3 opposed the present Section 11(6) petition, contending that the partnership was dissolved by mutual consent on 31.03.2010

and that the petitioner’s claims were barred by limitation, evidenced by a change in the petitioner’s Income Tax Return forms from ITR-3 (partnership income) to ITR-4S (individual income) after 2010

1. Whether the claims raised by the petitioner are ex-facie barred by the law of limitation

2. Whether a valid arbitration agreement exists and whether the dispute regarding the alleged dissolution of the firm in 2010 is referable to an Arbitrator

The Court applied Section 11(6) of the J&K Arbitration and Conciliation Act, 1997 (equivalent to the Central Act) regarding the appointment of arbitrators

It relied on the principle established by the Supreme Court of India in *SBI General Insurance Co. Ltd. v. Krish Spinning* (2024 INSC 532), which dictates that the scope of inquiry under Section 11 is strictly limited to the prima facie existence of an arbitration agreement

The court also followed the doctrine that "mixed questions of law and fact," such as limitation and "accord and satisfaction," should be left for the Arbitral Tribunal rather than being decided by the referral court

The court observed that Respondent No. 3 categorically admitted to the existence of the Partnership Deed dated 01.04.1996 and its arbitration clause

Regarding the plea of limitation, the court noted the petitioner’s argument of "delayed discovery," where the petitioner only learned of the firm’s non-compliance through a 2016 RTI response from the Income Tax Department

The court reasoned that since the commencement of the limitation period was a contested factual matter, it fell outside the summary jurisdiction of a Section 11 court

Similarly, the dispute over whether the firm was dissolved in 2010—contested by the petitioner who alleged exclusive control and suppression of records by Respondent No. 3—required a full appreciation of evidence

Following the *Krish Spinning* precedent, the court held that once the arbitration agreement is prima facie established, all other preliminary issues must be relegated to the Arbitrator

The court appointed Shri Sobha Ram Gandhi, District and Sessions Judge (Retd.), as the Sole Arbitrator to adjudicate the disputes

All observations regarding limitation and merits were clarified as non-binding on the Arbitrator