Referral Courts under Section 11 must limit limitation enquiry to the Section 11 application’s filing period.

The Petitioners entered into an Agreement for Sale on 27.03.2007 to purchase a flat from Respondent No. 1 (Vendor), with Respondent No. 2 as the confirming party.

Although possession was delivered in 2007 upon full payment, the conveyance deed remained unexecuted despite repeated follow-ups and draft exchanges.

Respondent No. 2 eventually denied liability to execute the deed on 06.02.2024, prompting the Petitioners to invoke the arbitration clause (Clause 11.1) via a Section 21 notice on 10.09.2025.

The Petitioners sought the appointment of an independent arbitrator, alleging the named arbitrator was ineligible under Section 12(5) of the Act.

Respondent No. 2 opposed the petition, arguing that the claims were "dead" and barred by limitation, as the cause of action allegedly arose in 2007.

1. Whether the referral court under Section 11(6) should refuse arbitration on the ground that the underlying claims are ex facie barred by limitation.

2. Whether the requirements for the appointment of an independent arbitrator under Section 11(6) of the Act were satisfied.

The court primarily applied Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the court's power to appoint an arbitrator.

It relied on the seven-judge bench decision in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, which emphasized minimal judicial intervention.

Crucially, it applied the principles from SBI General Insurance Co. Ltd. v. Krish Spinning, which clarified that the referral court’s enquiry into limitation must be restricted to whether the Section 11(6) petition itself is filed within three years of the refusal to appoint (Article 137 of the Limitation Act, 1963), leaving the limitation of underlying claims to the arbitrator.

It further noted Section 12(5) and the Seventh Schedule regarding the ineligibility of arbitrators with prior relationships to a party.

The Court rejected Respondent No. 2's reliance on the "ex facie dead claim" test from Arif Azim Co. Ltd. v. Aptech Ltd., noting that the Supreme Court in Krish Spinning had since overruled that limb of the test.

The Court reasoned that any "intricate evidentiary enquiry" into whether the delay from 2007 to 2024 barred the claim would involve factual determinations—such as evaluating "continuing assurances" and the significance of the 2024 refusal—which are exclusively within the Arbitral Tribunal's domain.

Upon verifying the prima facie existence of the arbitration agreement, the ineligibility of the named arbitrator (Mr. Pankaj Shroff) under Section 12(5), and the timely filing of the Section 11(6) petition following the failure of the Section 21 notice, the Court found its jurisdiction properly invoked.

The Court allowed the petition and appointed Mr. Sounak Bhattacharya as the Sole Arbitrator, directing that all questions of limitation regarding individual claims and maintainability remain open for the Arbitrator’s determination.