Neutral arbitrator appointment and limitation in Section 11 proceedings: unilateral control invalid, claims not plainly time-barred.

A contractual clause giving one party unilateral control over appointment of the sole arbitrator is inconsistent with the requirements of independence, neutrality, and natural justice, because an interested party cannot play an effective role in constituting the tribunal. The clause was therefore unsustainable, and a neutral sole arbitrator had to be appointed by the Court. On limitation, a Section 11 court may refuse reference only where the claims are plainly and demonstrably time-barred; where the record shows a live dispute, the matter should go to arbitration. Applying the negotiation history, later communications, and exclusion of the moratorium period, the claims were treated as continuing and not ex facie time-barred.

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Issues: (i) Whether the contractual mechanism for unilateral appointment of the sole arbitrator could be sustained in view of the principles of independence and neutrality of the arbitral tribunal; (ii) whether the claims were ex facie time-barred so as to justify of reference to arbitration.

Issue (i): Whether the contractual mechanism for unilateral appointment of the sole arbitrator could be sustained in view of the principles of independence and neutrality of the arbitral tribunal.

Analysis: The appointment procedure was tested against the settled principle that an interested party cannot have an effective role in appointing the arbitrator. The Court relied on the governing arbitration jurisprudence which insists that the arbitral process must be free from bias and must satisfy the requirement of natural justice reflected in nemo judex in causa sua. A clause permitting appointment in a manner inconsistent with that principle cannot be sustained.

Conclusion: The contractual appointment mechanism was held unsustainable and a neutral sole arbitrator had to be appointed by the Court.

Issue (ii): Whether the claims were ex facie time-barred so as to justify refusal of reference to arbitration.

Analysis: The Court applied the settled approach that limitation in a Section 11 proceeding turns on whether the dispute is plainly deadwood or whether there is a live controversy requiring arbitral determination. It examined the negotiation history, the hold placed on the work, later communications, meetings, and the invocation notice to identify the breaking point. It also considered the effect of the corporate debtor moratorium on computation of limitation and held that the period covered by moratorium had to be excluded. On that basis, the claims were treated as continuing and not hopelessly delayed.

Conclusion: The claims were not held to be ex facie time-barred and reference to arbitration was warranted.

Final Conclusion: The dispute was referred to arbitration by appointment of an and neutral sole arbitrator, and the objection based on limitation was rejected.

Ratio Decidendi: A party interested in the outcome cannot be entrusted with unilateral control over appointment of the arbitrator, and at the Section 11 stage the Court may refuse reference only when the claim is plainly and demonstrably time-barred, otherwise the dispute must be left to arbitration.

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