Section 11 arbitration referral barred by limitation when the claim was already time-barred before invocation.

A Section 11 petition for appointment of an arbitrator was rejected because the underlying claim was ex facie time-barred. The Court held that the right to apply accrued when payment was allegedly withheld after termination of the contract in January 2017, so the three-year limitation period under Article 137 of the Limitation Act expired before the arbitration notice issued in July 2021. Later correspondence, the respondent's consent to appointment, and the Supreme Court's suo motu extension of limitation did not revive the claim because limitation had already run out before the suspension period began. A hardware recovery claim could not be considered, as it was not part of the invocation notice.

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Issues: Whether the petition seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 was liable to be rejected on the ground that the underlying claim was ex facie time-barred.

Analysis: The petitioner's sole claim in the arbitration invocation notice was for recovery of monetary dues said to have arisen on termination of the contract in January 2017. The Court held that the relevant cause of action had accrued when payment was allegedly withheld after termination, and the petitioner ought to have invoked arbitration within the three-year period prescribed by Article 137 of the Limitation Act, 1963. The invocation notice issued in July 2021 was therefore beyond limitation. The Court further held that correspondence exchanged later, the respondent's consent to appointment of an arbitrator, and the Supreme Court's suo motu extension of limitation did not save the claim, since the limitation period had already expired before the suspension period commenced. The alleged claim for recovery of hardware was not part of the invocation notice and could not be relied upon to extend limitation.

Conclusion: The claim was held to be ex facie time-barred and not fit to be referred to arbitration.

Ratio Decidendi: In a petition under Section 11 of the Arbitration and Conciliation Act, 1996, the Court may decline reference where the dispute is plainly barred by limitation, and limitation for invoking arbitration runs from accrual of the right to apply as stated in Article 137 of the Limitation Act, 1963.

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