Referral courts under Section 11(6) must not conduct evidentiary enquiries into whether underlying claims are time-barred.

In brief

The question

1. Whether the court, while exercising jurisdiction under Section 11(6), can refuse a reference to arbitration on the ground that the underlying claims are ex facie barred by limitation

The court held

The court allowed the petition

It also directed

It held that the question of whether the underlying claims are barred by limitation is a mixed question of fact and law for the arbitrator to decide

The court appointed Mr. Sounak Bhattacharya as the Sole Arbitrator

The arbitrator was directed to consider any objections regarding the limitation of individual claims or maintainability as preliminary issues

All other questions on the merits were left open for adjudication

01Facts

The Petitioner (Purchaser) entered into an Agreement for Sale dated 23.07.2012 with Respondent No. 1 (Vendor), Respondent No. 2 (Developer/Confirming Party), and Respondent No. 3 (Owner) for a flat in Kolkata

¶ 3

While the Petitioner paid the full consideration and took possession in 2012, the Respondents allegedly failed to execute the final conveyance deed despite multiple meetings and the circulation of a draft deed

¶ 3–5

Significant delays occurred, and by 30.09.2023, Respondent No. 2 denied liability to execute the deed, claiming the obligation rested with Respondent Nos. 1 and 3

¶ 6

The Petitioner invoked the arbitration clause (Clause 18) via notice on 10.09.2025

¶ 7

The Petitioner approached the High Court under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator, asserting that the named arbitrator was ineligible due to his prior association with the Respondents

¶ 7–8

02Issues

i.1. Whether the court, while exercising jurisdiction under Section 11(6), can refuse a reference to arbitration on the ground that the underlying claims are ex facie barred by limitation

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ii.2. Whether the Petitioner satisfied the requirements for the appointment of an independent arbitrator under the Act

¶ 18–22

03Law Applied

The court applied Section 11(6) and Section 12(5) of the Arbitration and Conciliation Act, 1996

¶ 1, 7

It relied extensively on the Supreme Court's decision in SBI General Insurance Co. Ltd. v. Krish Spinning [2024 SCC OnLine SC 1754], which clarified the seven-judge bench ruling in In Re: Interplay Between Arbitration Agreements... and the Indian Stamp Act, 1899

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The court also referenced Arif Azim Co. Ltd. v. Aptech Ltd. [(2024) 5 SCC 313] regarding the three-year limitation period for filing a Section 11(6) petition under Article 137 of the Limitation Act, 1963

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Provisions in the judgment · 5 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 11 Section 12 Section 21

Limitation Act, 1963 Section 54 Section 137

04Reasoning

The court addressed Respondent No. 2's primary objection that the claim was "dead" due to a 13-year delay since the 2012 agreement

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Applying the latest jurisprudence from Krish Spinning, the court held that the "two-pronged test" from Arif Azim has been modified; the referral court's inquiry is now strictly limited to whether the Section 11(6) petition itself was filed within three years of the refusal to appoint an arbitrator

¶ 15–16

The court determined that an "intricate evidentiary enquiry" into whether the underlying claim is time-barred is now impermissible at the referral stage, as such matters fall within the exclusive domain of the Arbitral Tribunal

¶ 16–17

On the facts, the court found that since the Section 21 notice was issued in 2025 and the petition followed shortly thereafter, the petition was within the limitation

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Furthermore, the court noted that the named arbitrator’s potential partiality necessitated the appointment of an independent substitute

¶ 20