Failure to complete contractually mandated mediation renders a Section 11 application premature.

The parties entered into a registered Agreement for Sale dated 4 July 2014 for Commercial Unit No. 501 in “Hubtown Viva.”

The Applicant alleged that the Respondent owed maintenance and assessment charges, interest and other amounts under the Agreement. After issuing demands, a notice concerning termination, and an arbitration notice dated 4 July 2024, the Applicant applied under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.

The Respondent objected that the Agreement required mediation before the Maharashtra Chamber of Housing Industry (MCHI) before arbitration, and also raised limitation and pending proceedings before the Co-operative Court.

Whether the Applicant could invoke arbitration and seek appointment of an arbitrator without first completing the agreed mediation procedure before MCHI.

Whether the Section 11 application or the underlying monetary claims were barred by limitation.

Whether the pending Co-operative Court proceedings precluded appointment of an arbitrator.

Under Sections 11 and 43 of the Arbitration and Conciliation Act, 1996, a court considering appointment of an arbitrator conducts a limited referral-stage inquiry; limitation applies to arbitration proceedings as it does to court proceedings.

M/s Arif Azim Co. Ltd. v. M/s Aptech Ltd., 2024 INSC 155, distinguishes limitation for a Section 11 application—generally running from when the right to apply arises after a valid invocation and failure to appoint—from limitation applicable to the substantive claims; a referral court may reject a claim that is clearly dead, while other limitation questions ordinarily fall to the tribunal.

The parties’ agreed pre-arbitration steps must be given effect: under Clauses 50 and 51, disputes were to proceed from mutual discussion to MCHI mediation, and only if unresolved after mediation could they be referred to arbitration.

The Court also noted the principle in Perkins Eastman Architects DPC v. HSCC (India) Ltd. against a party with an interest having unrestricted unilateral power to appoint a sole arbitrator, but did not decide its application here.

The Agreement contained a valid arbitration clause, but Clause 51 permitted arbitration only after mediation before MCHI. The Applicant relied on demands and correspondence, but provided no material showing a reference to MCHI or failed mediation; those demands could not substitute for the contractually stipulated mediation stage. The arbitration notice was therefore premature, making appointment unavailable on that notice.

The Court did not find the Section 11 application barred merely because the alleged dues originated earlier; nor did it finally determine limitation of the substantive claims, since the due dates and any legally relevant extension required further examination.

The record was also insufficient to determine that the Co-operative Court proceedings involved identical issues and reliefs or excluded arbitration.

The Court did not decide the merits or limitation of the monetary claims, or the ultimate effect of the Co-operative Court proceedings; those objections remained open in any future proceedings.

No order as to costs was made.