Time-barred arbitration claims may justify revocation of arbitral authority where the claimant remained inactive for years.

In an exceptional case, a court may revoke an arbitrator's authority and treat the arbitration agreement as ineffective where the underlying claim is hopelessly time-barred and the claimant has remained inactive for a long period. The analysis applies the Arbitration Act, 1940: revocation of authority may be granted with leave of court, and once authority is revoked the arbitration agreement can cease to operate for the dispute. Limitation applies to arbitration, and prolonged inaction may show that the claimant slept over its rights. On the stated facts, no effective step was taken for more than ten years, so the dispute was already barred when arbitration was invoked and relief from the arbitration agreement was justified.

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Issues: Whether a court may, in an exceptional case, permit revocation of the authority under the arbitration agreement and declare the arbitration clause ineffective where the underlying claim is hopelessly barred by limitation and the claimant has remained inactive for a long period.

Analysis: Section 5 of the Arbitration Act, 1940 contemplates revocation of an arbitrator's authority with leave of the court, and Section 12(2)(b) empowers the court, where such authority is revoked, to order that the arbitration agreement shall cease to have effect in respect of the dispute. Section 37 of the Arbitration Act, 1940 applies the law of limitation to arbitration and treats the commencement of arbitration as the service of a notice requiring appointment of an arbitrator. On the facts, even assuming the claim arose in 1979, no effective step was taken for more than ten years. The claimant therefore slept over his rights, and the dispute was already barred when arbitration was sought. In such circumstances, the court's power to interfere was to be exercised cautiously, but the case fell within the exceptional category warranting relief.

Conclusion: The revocation of the arbitration arrangement was justified and the arbitration agreement could be directed to cease to operate for the dispute.

Final Conclusion: The challenge failed because the claim was treated as hopelessly time-barred, and the respondent was entitled to be relieved from the arbitration agreement.

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