Section 5 Limitation Act applies to Section 11 applications; preserving subject-matter constitutes exceptional cause for condoning delay.

The Applicant, a Limited Liability Partnership, was the 8th partner in a firm (Respondents 1-7) formed to redevelop "Panwala chawl" in Mumbai.

Following project delays and a stop-work notice, the Applicant sought to withdraw and requested a refund of approximately Rs. 29.6 crores.

On June 20, 2020, the Applicant invoked the arbitration clause.

Amidst the COVID-19 pandemic, the Applicant filed for interim measures under Section 9 of the Arbitration and Conciliation Act in July 2020.

Between 2023 and 2024, the project faced termination by MHADA, leading the Applicant to file Writ Petitions and deposit Rs. 2 crores to stall acquisition and protect its investment.

Despite these efforts, MHADA acquired the property on March 20, 2025.

The Applicant filed this Section 11(6) application for the appointment of an arbitrator on November 15, 2025, accompanied by an application to condone a 258-day delay.

Article 137 of the Limitation Act, 1963 provides a three-year limitation period for Section 11 applications, commencing from the date the right to apply accrues (usually 30 days after the Section 21 notice).

The limitation clock begins when the opposite party fails to comply with the arbitration invocation notice, as established in Arif Azim Co. Ltd. v. Aptech Ltd.

The Supreme Court mandate in RE: Cognizance for Extension of Limitation requires the exclusion of the pandemic period from March 2020 to February 2022 from limitation calculations.

While Section 5 of the Limitation Act applies to Section 11 petitions, delay should be condoned only in "exceptional cases" where a "very strong case" is made, as held in HPCL Bio-Fuels Ltd. v. Shahaji Bhanudas Bhad.

The Court determined that after excluding the COVID-19 period, the limitation for filing the application expired on February 28, 2025, making the November 2025 filing 258 days late.

The Court rejected the argument that filing a Section 9 petition during the pandemic precluded the Applicant from claiming the COVID-19 exclusion, ruling that the Supreme Court's exclusion order is a general mandate not subject to case-specific exceptions.

The Court evaluated the "sufficient cause" for the remaining 258 days and found the circumstances to be unique and exceptional.

The Court noted that the Applicant was not dormant but was embroiled in a "maze of litigation" to save the redevelopment project from MHADA acquisition.

The Court reasoned that seeking an arbitrator earlier might have been secondary to the urgent necessity of preserving the subject matter of the dispute.

The real necessity for arbitration—recovering investments from partners—crystallized only after the project was definitively lost to MHADA in March 2025.

The Court found the Applicant acted with due diligence rather than negligence in light of the ongoing litigation to preserve the asset.

Finding that the arbitration agreement in Clause 16 of the Deed of Alteration was undisputed, the Court allowed the application and appointed Mr. Justice A. A. Sayed as the sole arbitrator.

The Court ordered the arbitrator's fees to be governed by the Bombay High Court Rules, 2018, and disposed of the Interim Application and Arbitration Application.