Arbitrability and limitation in ongoing settlement talks keep a dispute alive for arbitration; tribunal may decide limitation later.

Continuing negotiations, execution and cancellation of a memorandum of understanding, and related proceedings showed that the FSI transfer dispute had not been finally settled, so it remained a live arbitrable issue for the tribunal. At the Section 11 stage, the Court treated the limitation objection as not decisive because the factual record suggested ongoing settlement efforts and no clear final repudiation; the question of limitation could be examined by the arbitral tribunal under Section 16. The arbitrator's appointment was therefore upheld, as the dispute was still alive and the claim was not shown to be time-barred at that stage.

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Issues: (i) Whether the dispute concerning transfer of 1.20 lakh sq. ft. FSI remained a live arbitrable issue despite the subsequent memorandum of understanding and related dealings between the parties. (ii) Whether the claim was barred by limitation so as to preclude appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Issue (i): Whether the dispute concerning transfer of 1.20 lakh sq. ft. FSI remained a live arbitrable issue despite the subsequent memorandum of understanding and related dealings between the parties.

Analysis: The dispute was traced through the successive agreements, the later memorandum of understanding, the earlier proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, and the continuing controversy reflected in the writ proceedings and undertaking before the Delhi High Court. The existence of continuing negotiations and the very execution and cancellation of the memorandum of understanding showed that the parties had not finally closed their rights and obligations. The question whether the memorandum of understanding amounted to a binding final settlement, and what its effect was on the earlier agreement, was held to be a matter for the arbitral tribunal.

Conclusion: The dispute was held to be a live arbitrable issue and not one finally concluded between the parties.

Issue (ii): Whether the claim was barred by limitation so as to preclude appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: The Court held that where settlement negotiations continue, the limitation clock does not start running in the manner suggested by the appellant. The existence of ongoing dialogue and repeated attempts at resolution meant that the claim could not be treated as dead merely by lapse of time. The Court further held that the question of limitation, in the factual setting of this dispute, could be examined by the arbitral tribunal under Section 16 of the Arbitration and Conciliation Act, 1996.

Conclusion: The claim was not held to be barred by limitation at the Section 11 stage.

Final Conclusion: The appointment of the arbitrator was upheld, and the appeal failed because the dispute was still alive and the limitation objection did not defeat the reference to arbitration at that stage.

Ratio Decidendi: At the Section 11 stage, the Court may prima facie determine whether a claim is dead or time-barred, but where the record shows continuing negotiations and no final settlement, the dispute remains arbitrable and limitation may be left to the arbitral tribunal.

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