Referral Court must confine Section 11 enquiry to existence of arbitration agreement, leaving limitation issues for Arbitrator.

The applicant was awarded a contract for railway construction work in 2016.

While the work was completed in July 2020 and a final bill was paid in September 2020, a dispute arose regarding the non-payment of a second and final escalation bill submitted in February 2021.

The applicant invoked the arbitration clause on March 22, 2023, after the respondents failed to settle the claims.

The Union of India opposed the application, contending that the claim was time-barred as the cause of action arose upon the payment of the final bill in September 2020, and the application for appointment of an arbitrator was filed more than three years later in November 2023.

1. Whether the application for the appointment of an arbitrator is barred by the law of limitation.

2. Whether the court should decide the issue of limitation at the referral stage or leave it to the Arbitral Tribunal under the principle of kompetenz-kompetenz.

The court applied Section 11(6) and 11(6-A) of the Arbitration and Conciliation Act, 1996, which restricts judicial intervention at the referral stage to the examination of the existence of an arbitration agreement.

The "kompetenz-kompetenz" principle under Section 16 of the Act empowers a tribunal to rule on its own jurisdiction, including limitation.

Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd. established that limitation is a jurisdictional issue for the arbitrator.

SBI General Insurance Co. Ltd. v. Krish Spinning clarified that judicial review under Section 11 is limited to a prima facie scrutiny of the agreement's existence and should avoid "laborious enquiry".

The court observed that the existence of the arbitration agreement and the arbitrability of the dispute were not contested by the respondents.

Following recent Supreme Court jurisprudence, the court reasoned that the legislative intent of the 2015 Amendment to the Act was to minimize judicial interference at the pre-reference stage.

The court determined that because limitation is a mixed question of fact and law, it should be treated as a jurisdictional issue to be decided by the arbitrator under Section 16 rather than the High Court under Section 11.

The court noted that since the applicant issued a notice of dissatisfaction and a request for arbitration within the three-year window of the escalation bill's relevance, the matter was not a "dead claim" that would justify dismissal at the threshold.

The court found the application to be within limitation for the purpose of referral based on the notice dated March 22, 2023, while granting the respondents the liberty to raise the limitation objection before the tribunal. Justice Shri Ajit Singh was appointed as the sole arbitrator to resolve the dispute.