Arbitration claim remained live, limitation was extended by acknowledgment, and fresh notice was not required before appointment.

Continuing correspondence over dissolution of a partnership and settlement of accounts can keep an arbitration claim live for Section 11 purposes, and acknowledgments of liability in that correspondence may extend limitation under Section 18 of the Limitation Act, 1963. The Delhi HC also noted that a further formal notice for mutual appointment of a sole arbitrator was unnecessary where one party had already sought appointment, sent reminders, and the other side remained unresponsive. On that basis, the arbitration application was allowed and a sole arbitrator was appointed to decide the claims and counter-claims.

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Issues: (i) whether the claim sought to be referred to arbitration was a live claim on the date of filing of the Section 11 application; (ii) whether the application was barred by limitation or saved by acknowledgment and related limitation principles; (iii) whether a fresh notice seeking mutual appointment of an arbitrator was necessary after further correspondence between the parties.

Issue (i): whether the claim sought to be referred to arbitration was a live claim on the date of filing of the Section 11 application.

Analysis: The dispute related to dissolution of a partnership and rendition and settlement of accounts. The parties continued exchanging correspondence and accounts up to December 2002, and both asserted and acknowledged rights and obligations concerning disclosure and settlement of partnership accounts. In the light of the requirement that the Court under Section 11 must be satisfied that an arbitrable live claim exists, the continuing correspondence showed that the claim had not become stale when the petition was filed in October 2005.

Conclusion: The claim was live and referable to arbitration.

Issue (ii): whether the application was barred by limitation or saved by acknowledgment and related limitation principles.

Analysis: The starting point for a suit concerning accounts of a dissolved partnership is the date of dissolution, but the subsequent correspondence between the parties contained acknowledgments of liability to render accounts within the meaning of Section 18 of the Limitation Act, 1963. Those acknowledgments caused a fresh period of limitation to run. The proceedings were also supported by the principles governing commencement of arbitral proceedings and, in the circumstances, the petitioner could seek the benefit of limitation provisions if necessary.

Conclusion: The application was not barred by limitation.

Issue (iii): whether a fresh notice seeking mutual appointment of an arbitrator was necessary after further correspondence between the parties.

Analysis: The arbitration clause required appointment of a sole arbitrator by mutual consent. The petitioner had already requested appointment and sent reminders, while the respondent had not responded. Since the respondent had already made its position clear by silence and the parties had continued substantive correspondence on the dispute, a further formal notice would have served no useful purpose and would only delay the process. The Section 11 procedure is intended to secure expeditious constitution of the tribunal, not to impose avoidable technical hurdles.

Conclusion: A fresh notice was not necessary.

Final Conclusion: The arbitration application was allowed and a sole arbitrator was appointed to adjudicate the claims and counter-claims of the parties.

Ratio Decidendi: Where correspondence between the parties shows an acknowledgment of liability and a continuing dispute over partnership accounts, the claim remains live and limitation under the Limitation Act is extended by such acknowledgment, and a Section 11 request for appointment of an arbitrator need not be defeated on a hyper-technical insistence on a fresh notice when the other side has already declined to cooperate.

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