Facts
The Petitioner filed five petitions under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator.
Source reference: p. 2-3the disputes arose from five similarly worded Development Agreements dated 30.06.2011, each containing an identical arbitration clause (Clause 20) providing for mutual appointment of an arbitrator with jurisdiction in Delhi.
Source reference: p. 3The Petitioner invoked arbitration via legal notices dated 21.12.2022.
Source reference: p. 3While the existence of the arbitration agreement was undisputed, the Respondent contended that the claims were barred by the law of limitation.
Source reference: p. 3Previous court orders encouraged a consensus on an arbitrator or amicable settlement, both of which failed.
Source reference: p. 4Issues
1. Whether the court, while exercising jurisdiction under Section 11(6), should adjudicate on the issue of limitation raised by the Respondent.
Source reference: p. 3 / para. 112. Whether a sole arbitrator should be appointed to adjudicate the disputes via a composite reference.
Source reference: p. 4 / para. 6Law Applied
The court primarily applied Section 11(6) and 11(6-A) of the Arbitration and Conciliation Act, 1996.
Source reference: p. 2, 5It relied on the Three-Judge Bench decision in *SBI General Insurance Co. Ltd. v. Krish Spinning*, which clarified that judicial scrutiny under Section 11 is confined strictly to the existence of the arbitration agreement.
Source reference: p. 4-5This ruling followed the Seven-Judge Bench decision in *Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re*, which established that the "negative effect of competence-competence" prevents referral courts from deciding issues like "accord and satisfaction" or limitation, leaving them to the Arbitral Tribunal under Section 16.
Source reference: p. 6-8Reasoning
The court reasoned that since the existence of the arbitration agreement was not in dispute, its role was purely facilitative and procedural to give effect to the parties' original intent to arbitrate.
Source reference: p. 3, 8Regarding the Respondent's objection on limitation, the court determined that because the petitions were filed within three years of the invocation notice, the substantive plea of limitation is a "mixed question of law and fact" falling within the exclusive domain of the Arbitral Tribunal.
Source reference: p. 3, 6Following the "modern arbitration" principle of minimal judicial interference, the court held that it must not conduct a "laborious enquiry" into contested facts or the merits of the claims, as the Arbitral Tribunal is better equipped to weed out frivolous or time-barred litigation after appreciating full evidence.
Source reference: p. 6-8Holding
The court allowed the petitions and held that the issue of limitation must be decided by the Arbitral Tribunal.
It appointed Hon’ble Mr. Justice B. R. Gavai, Former Chief Justice of India, as the Sole Arbitrator to adjudicate the disputes through a composite reference.
Source reference: p. 8The arbitration is to be conducted under the aegis of the Delhi International Arbitration Centre (DIAC) following its rules and fee schedule.
Source reference: p. 8-9All rights and contentions regarding the merits and counter-claims were kept open for the arbitrator's decision.
Source reference: p. 9Original Court PDF
Satnam Enterprises Private Limited v. Uppal Chadha Hi-Tech Developers Pvt. Ltd. [ARB.P. 634/2024 and connected matters.]
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