This extract is taken from SBP & Co. v. Patel Engg. Ltd.

, (2005) 8 SCC 618 : 2005 SCC

OnLine SC 1553 at page 660 (coram 7)

Summary: The state of Maharashtra through its irrigation department handed over the civil
work of stage IV of Koyna Hydroelectric Project to Respondent no.1. For the purpose of the
same, respondent no.1 entered into a sub-contract with petitioner. While entering into the
contract an agreement was made so as to define the process after any kind of indifferences are
faced between the parties to the contract. After a dispute the parties approached the Court
where the court decided on whether appointment of an arbitrator was a judicial or an
administrative power.

39. It is necessary to define what exactly the Chief Justice, approached with an application
under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own
jurisdiction in the sense whether the party making the motion has approached the right High
Court. He has to decide whether there is an arbitration agreement, as defined in the Act and
whether the person who has made the request before him, is a party to such an agreement. It
is necessary to indicate that he can also decide the question whether the claim was a dead
one; or a long-barred claim that was sought to be resurrected and whether the parties have
concluded the transaction by recording satisfaction of their mutual rights and obligations or
by receiving the final payment without objection. It may not be possible at that stage, to
decide whether a live claim made, is one which comes within the purview of the arbitration
clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on
taking evidence, along with the merits of the claims involved in the arbitration. The Chief
Justice has to decide whether the applicant has satisfied the conditions for appointing an
arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these
aspects, the Chief Justice can either proceed on the basis of affidavits and the documents
produced or take such evidence or get such evidence recorded, as may be necessary. We
think that adoption of this procedure in the context of the Act would best serve the purpose
sought to be achieved by the Act of expediting the process of arbitration, without too many
approaches to the court at various stages of the proceedings before the Arbitral Tribunal.

This extract is taken from Shree Ram Mills Ltd. v. Utility Premises (P) Ltd., (2007) 4
SCC 599 : 2007 SCC OnLine SC 403 at page 606 (coram 2)

Summary: The order of a Bombay high court judge was examined in appointing arbitrators
for an application. The contentions were that there existed no live issue and that the
application was barred by limitation. The issue was to decide whether the order was good
order in law.

27. …A glance on this (SBP Case para 39) para would suggest the scope of the order under
Section 11 to be passed by the Chief Justice or his designate. Insofar as the issues regarding
territorial jurisdiction and the existence of the arbitration agreement are concerned, the Chief
Justice or his designate has to decide those issues because otherwise the arbitration can never
proceed. Thus, the Chief Justice has to decide about the territorial jurisdiction and also
whether there exists an arbitration agreement between the parties and whether such party has
approached the court for appointment of the arbitrator. The Chief Justice has to examine as to
whether the claim is a dead one or in the sense whether the parties have already concluded
the transaction and have recorded satisfaction of their mutual rights and obligations or
whether the parties concerned have recorded their satisfaction regarding the financial claims.
In examining this if the parties have recorded their satisfaction regarding the financial claims,
there will be no question of any issue remaining. It is in this sense that the Chief Justice has
to examine as to whether there remains anything to be decided between the parties in respect
of the agreement and whether the parties are still at issue on any such matter. If the Chief
Justice does not, in the strict sense, decide the issue, in that event it is for him to locate such
issue and record his satisfaction that such issue exists between the parties. It is only in that
sense that the finding on a live issue is given. Even at the cost of repetition we must state that
it is only for the purpose of finding out whether the arbitral procedure has to be started that
the Chief Justice has to record satisfaction that there remains a live issue in between the
parties. The same thing is about the limitation which is always a mixed question of law and
fact. The Chief Justice only has to record his satisfaction that prima facie the issue has not
become dead by the lapse of time or that any party to the agreement has not slept over its
rights beyond the time permitted by law to agitate those issues covered by the agreement. It is
for this reason that it was pointed out in the above para that it would be appropriate
sometimes to leave the question regarding the live claim to be decided by the Arbitral
Tribunal. All that he has to do is to record his satisfaction that the parties have not closed
their rights and the matter has not been barred by limitation. Thus, where the Chief Justice
comes to a finding that there exists a live issue, then naturally this finding would include a
finding that the respective claims of the parties have not become barred by limitation.

This extract is taken from Secunderabad Cantonment Board v. B. Ramachandraiah &

Sons, (2021) 5 SCC 705 : 2021 SCC OnLine SC 219 at page 722 (coram 2)
Summary: Appellant floated tenders for road repairs and the parties entered into a contract.
Issues for consideration were whether issuance of letters/ correspondences would extend the
period of limitation for filing Section 11 petition and whether the Court can dismiss the
petition u/s 11 for being barred by time.

19. Applying the aforesaid judgments to the facts of this case, so far as the applicability of
Article 137 of the Limitation Act to the applications under Section 11 of the Arbitration Act
is concerned, it is clear that the demand for arbitration in the present case was made by the
letter dated 7-11-2006. This demand was reiterated by a letter dated 13-1-2007, which letter
itself informed the appellant that appointment of an arbitrator would have to be made within
30 days. At the very latest, therefore, on the facts of this case, time began to run on and from
12-2-2007. The appellant's laconic letter dated 23-1-2007, which stated that the matter was
under consideration, was within the 30-day period. On and from 12-2-2007, when no
arbitrator was appointed, the cause of action for appointment of an arbitrator accrued to the
respondent and time began running from that day. Obviously, once time has started running,
any final rejection by the appellant by its letter dated 10-11-2010 would not give any fresh
start to a limitation period which has already begun running, following the mandate of
Section 9 of the Limitation Act. This being the case, the High Court was clearly in error in
stating that since the applications under Section 11 of the Arbitration Act were filed on 6-11-
2013, they were within the limitation period of three years starting from 10-11-2020. On this
count, the applications under Section 11 of the Arbitration Act, themselves being hopelessly
time-barred, no arbitrator could have been appointed by the High Court.

20. Even otherwise, the claim made by the respondent was also ex facie time-barred. It is
undisputed that final payments were received latest by the end of March 2003 by the
respondent. That apart, even assuming that a demand could have been made on account of
price variation, such demand was made on 8-9-2003. Repeated letters were written thereafter
by the respondent, culminating in a legal notice dated 30-1-2010. Vide the reply notice dated
16-2-2010, it was made clear that such demands had been rejected. Even taking 16-2-2010 as
the starting point for limitation on merits, a period of three years having elapsed by February
2013, the claim made on merits is also hopelessly time-barred.

This extract is taken from Schlumberger Asia Services Ltd. v. ONGC Ltd., (2013) 7
SCC 562 : (2013) 3 SCC (Civ) 630 : 2013 SCC OnLine SC 455 at page 569 (Coram 1)
Summary: Application under 11(6) of the A&C to appoint arbitrator. Counter affidavit filed
claiming that petitioner barred by limitation.

25… These observations make it clear that it is optional for the Chief Justice or his designate
to decide whether the claim is dead (long-barred). It is also made clear by this Court that the
Chief Justice or his designate would do so only when the claim is evidently and patently a
long time-barred claim. The claim could be said to be patently long time-barred, if the
contractor makes it a decade or so after completion of the work without referring to any
acknowledgment of a liability or other factors that kept the claim alive in law. On the other
hand, if the contractor makes a claim, which is slightly beyond the period of three years of
completing the work say within five years of completion, the Court will not enter into the
disputed questions of fact as to whether the claim was barred by limitation or not. The
judgment further makes it clear that there is no need for any detailed consideration of
evidence.

26. In the present case, there is a dispute as to whether the repeated notices sent by the
petitioner to the respondents were ever received. There are further disputes (even if the
notices were received by ONGC) as to whether they were actually received in the correct
section of ONGC. These are matters of evidence which are normally best left to be decided
by the Arbitral Tribunal.

This extract is taken from Indian Oil Corpn. Ltd. v. SPS Engg. Ltd., (2011) 3 SCC 507 :
(2011) 1 SCC (Civ) 747 : 2011 SCC OnLine SC 286 at page 515 (coram 2)

Summary: The parties had been issued an arbitration award which the plaintiff decided to
adjust in its final dues and the respondent ailed to comply. The Plaintiff approached the Delhi
HC which said that the Plaintiff was barred by limitation and res judicata. An appeal was
made to the SC and the judgement defined the scope of Section 11 of the A&C Act.

14. To find out whether a claim is barred by res judicata, or whether a claim is “mala fide”, it
will be necessary to examine the facts and relevant documents. What is to be decided in an
application under Section 11 of the Act is whether there is an arbitration agreement between
the parties. The Chief Justice or his designate is not expected to go into the merits of the
claim or examine the tenability of the claim, in an application under Section 11 of the Act.
The Chief Justice or his designate may however choose to decide whether the claim is a dead
(long-barred) claim or whether the parties have, by recording satisfaction, exhausted all
rights, obligations and remedies under the contract, so that neither the contract nor the
arbitration agreement survived. When it is said that the Chief Justice or his designate may
choose to decide whether the claim is a dead claim, it is implied that he will do so only when
the claim is evidently and patently a long time-barred claim and there is no need for any
detailed consideration of evidence. We may elucidate by an illustration: if the contractor
makes a claim a decade or so after completion of the work without referring to any
acknowledgment of a liability or other factors that kept the claim alive in law, and the claim
is patently long time-barred, the Chief Justice or his designate will examine whether the
claim is a dead claim (that is, a long time-barred claim). On the other hand, if the contractor
makes a claim for payment, beyond three years of completing of the work but say within five
years of completion of work, and alleges that the final bill was drawn up and payments were
made within three years before the claim, the Court will not enter into a disputed question
whether the claim was barred by limitation or not. The Court will leave the matter to the
decision of the Tribunal. If the distinction between apparent and obvious dead claims, and
claims involving disputed issues of limitation is not kept in view, the Chief Justice or his
designate will end up deciding the question of limitation in all applications under Section 11
of the Act.

15. An application under Section 11 of the Act is expected to contain pleadings about the
existence of a dispute and the existence of an arbitration agreement to decide such dispute.
The applicant is not expected to justify the claim or plead exhaustively in regard to limitation
or produce documents to demonstrate that the claim is within time in a proceeding under
Section 11 of the Act. That issue should normally be left to the Arbitral Tribunal. If the Chief
Justice or his designate is of the view that in addition to examining whether there is an
arbitration agreement between the parties, he should consider the issue whether the claim is a
dead one (long time-barred) or whether there has been satisfaction of mutual rights and
obligation under the contract, he should record his intention to do so and give an opportunity
to the parties to place their materials on such issue. Unless the parties are put on notice that
such an issue will be examined, they will be under the impression that only questions of
jurisdiction and existence of arbitration agreement between the parties will be considered in
such proceedings.

16. The question whether a claim is barred by res judicata, does not arise for consideration in
a proceeding under Section 11 of the Act. Such an issue will have to be examined by the
Arbitral Tribunal. A decision on res judicata requires consideration of the pleadings as also
the claims/issues/points and the award in the first round of arbitration, in juxtaposition with
the pleadings and the issues/points/claims in the second arbitration. The limited scope of
Section 11 of the Act does not permit such examination of the maintainability or tenability of
a claim either on facts or in law. It is for the Arbitral Tribunal to examine and decide whether
the claim was barred by res judicata. There can be no threshold consideration and rejection of
a claim on the ground of res judicata, while considering an application under Section 11 of
the Act.

This extract is taken from National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd.,
(2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117 : 2008 SCC OnLine SC 1422 at page 283
(coram 2)

Summary: There was a dispute between parties where one contended the other had
unconditionally accepted the full and final settlement award. The Respondent approached the
court for Arbitration. The issues under consideration the position under section 11 when one
party refuses arbitration as they claim the other had accepted full and final settlement.

22. Where the intervention of the court is sought for appointment of an Arbitral Tribunal
under Section 11, the duty of the Chief Justice or his designate is defined in SBP & Co.
[(2005) 8 SCC 618] This Court identified and segregated the preliminary issues that may
arise for consideration in an application under Section 11 of the Act into three categories, that
is, (i) issues which the Chief Justice or his designate is bound to decide; (ii) issues which he
can also decide, that is, issues which he may choose to decide; and (iii) issues which should
be left to the Arbitral Tribunal to decide.

22.1. The issues (first category) which the Chief Justice/his designate will have to decide are:

a) Whether the party making the application has approached the appropriate High Court.
b) Whether there is an arbitration agreement and whether the party who has applied
under Section 11 of the Act, is a party to such an agreement.

22.2. The issues (second category) which the Chief Justice/his designate may choose to
decide (or leave them to the decision of the Arbitral Tribunal) are:

a) Whether the claim is a dead (long-barred) claim or a live claim.

b) Whether the parties have concluded the contract/transaction by recording satisfaction
of their mutual rights and obligation or by receiving the final payment without
objection.
22.3. The issues (third category) which the Chief Justice/his designate should leave
exclusively to the Arbitral Tribunal are:

a) Whether a claim made falls within the arbitration clause (as for example, a matter
which is reserved for final decision of a departmental authority and excepted or
excluded from arbitration).
b) Merits or any claim involved in the arbitration.

23. It is clear from the scheme of the Act as explained by this Court in SBP & Co. [(2005) 8
SCC 618] , that in regard to issues falling under the second category, if raised in any
application under Section 11 of the Act, the Chief Justice/his designate may decide them, if
necessary, by taking evidence. Alternatively, he may leave those issues open with a direction
to the Arbitral Tribunal to decide the same. If the Chief Justice or his designate chooses to
examine the issue and decides it, the Arbitral Tribunal cannot re-examine the same issue. The
Chief Justice/his designate will, in choosing whether he will decide such issue or leave it to
the Arbitral Tribunal, be guided by the object of the Act (that is expediting the arbitration
process with minimum judicial intervention). Where allegations of forgery/fabrication are
made in regard to the document recording discharge of contract by full and final settlement, it
would be appropriate if the Chief Justice/his designate decides the issue.

This extract is taken from DHV BV v. Tahal Consulting Engineers Ltd., (2007) 8 SCC
321 : 2007 SCC OnLine SC 1107 at page 326 (coram 1)

Summary: Application filed under section 11 for appointment of arbitrator. Respondent filed
counter affidavit claiming bar on limitation. The SBP v Patel engg case was referred to in this
case.

14. It is clear from the above extracted paragraph (SBP case) that in order to set into motion
the arbitral procedure, the Chief Justice or his designate has to decide the issues, if raised,
regarding territorial jurisdiction and existence of an arbitration agreement between the
parties. In addition thereto, he can also decide the question whether the claim was a dead one
in the sense that the parties have already concluded the transaction by recording satisfaction
of their mutual rights and obligations or have recorded satisfaction regarding their financial
claims. Nevertheless, the Court made it clear that at that stage it may not be possible to
decide whether a live claim made, is one which comes within the purview of the arbitration
clause and this question should be left to be decided by the Arbitral Tribunal on taking
evidence. It is, therefore, plain that purely for the purpose of deciding whether the arbitral
procedure is to be set into motion or not, the Chief Justice or his designate has to examine
and record his satisfaction that an arbitration agreement exists between the parties and that in
respect of the agreement a live issue, to be decided between the parties, still exists. On being
so satisfied, he may allow the application and appoint an Arbitral Tribunal or a sole
arbitrator, as the case may be. However, if he finds and is convinced that the claim is a dead
one or is patently barred by time, he may hold so and decline the request for appointment of
an arbitrator.

This extract is taken from BSNL v. Nortel Networks (India) (P) Ltd., (2021) 5 SCC 738 :
2021 SCC OnLine SC 207 at page 762 (coram 2)

Summary: Initially, a petition was filed before the Kerala HC for the appointment of
arbitrators, which was granted. A review petition was made which was dismissed and then
finally, an appeal was made to the SC. The issues for consideration were the limitation period
for an application under section 11 and whether can court can deny application if the claim
was ex facie time barred.

Issue of limitation

38. Limitation is normally a mixed question of fact and law, and would lie within the domain
of the Arbitral Tribunal. There is, however, a distinction between jurisdictional and
admissibility issues. An issue of “jurisdiction” pertains to the power and authority of the
arbitrators to hear and decide a case. Jurisdictional issues include objections to the
competence of the arbitrator or tribunal to hear a dispute, such as lack of consent, or a dispute
falling outside the scope of the arbitration agreement. Issues with respect to the existence,
scope and validity of the arbitration agreement are invariably regarded as jurisdictional
issues, since these issues pertain to the jurisdiction of the tribunal.

This extract is taken from ITW Signode India Ltd. v. CCE, (2004) 3 SCC 48 : 2003 SCC
OnLine SC 1289 at page 74 (coram 3)

Summary: The decided on whether a claim barred by time was a jurisdictional issue or not.

69. The question of limitation involves a question of jurisdiction. The finding of fact on the
question of jurisdiction would be a jurisdictional fact. Such a jurisdictional question is to be
determined having regard to both fact and law involved therein. The Tribunal, in our opinion,
committed a manifest error in not determining the said question, particularly, when in the
absence of any finding of fact that such short-levy of excise duty related to any positive act
on the part of the appellant by w ay of fraud, collusion, wilful misstatement or suppression of
facts, the extended period of limitation could not have been invoked and in that view of the
matter no show-cause notice in terms of Rule 10 could have been issued.

This extract is taken from National Thermal Power Corpn. Ltd. v. Siemens
Atkeingesellschaft, (2007) 4 SCC 451 : 2007 SCC OnLine SC 302 at page 457 (coram 2)

Summary: parties were given a partial judgment which was contested by one party in
the High court. The high court dismissed the petition. Appeal was filed in the SC.
Question before the court is maintainability of an appeal under section 37 of the Act.

18. The expression “jurisdiction” is a word of many hues. Its colour is to be discerned from
the setting in which it is used. When we look at Section 16 of the Act, we find that the said
provision is one, which deals with the competence of the Arbitral Tribunal to rule on its own
jurisdiction. SBP & Co. v. Patel Engg. Ltd. [(2005) 8 SCC 618] in a sense confined the
operation of Section 16 to cases where the Arbitral Tribunal was constituted at the instance of
the parties to the contract without reference to the Chief Justice under Section 11(6) of the
Act. In a case where the parties had thus constituted the Arbitral Tribunal without recourse to
Section 11(6) of the Act, they still have the right to question the jurisdiction of the Arbitral
Tribunal including the right to invite a ruling on any objection with respect to the existence or
validity of the arbitration agreement. It could therefore rule that there existed no arbitration
agreement, that the arbitration agreement was not valid, or that the arbitration agreement did
not confer jurisdiction on the Tribunal to adjudicate upon the particular claim that is put
forward before it. Under sub-section (5), it has the obligation to decide the plea and where it
rejects the plea, it could continue with the arbitral proceedings and make the award. Under
sub-section (6), a party aggrieved by such an arbitral award may make an application for
setting aside such arbitral award in accordance with Section 34. In other words, in the
challenge to the award, the party aggrieved could raise the contention that the Tribunal had
no jurisdiction to pass it or that it had exceeded its authority, in passing it. This happens when
the Tribunal proceeds to pass an award. It is in the context of the various sub-sections of
Section 16 that one has to understand the content of the expression “jurisdiction” and the
scope of the appeal provision. In a case where the Arbitral Tribunal proceeds to pass an
award after overruling the objection relating to jurisdiction, it is clear from sub-section (6) of
Section 16 that the parties have to resort to Section 34 of the Act to get rid of that award, if
possible. But, if the Tribunal declines jurisdiction or declines to pass an award and dismisses
the arbitral proceedings, the party aggrieved is not without a remedy. Section 37(2) deals with
such a situation. Where the plea of absence of jurisdiction or a claim being in excess of
jurisdiction is accepted by the Arbitral Tribunal and it refuses to go into the merits of the
claim by declining jurisdiction, a direct appeal is provided. In the context of Section 16 and
the specific wording of Section 37(2)(a) of the Act, it would be appropriate to hold that what
is made directly appealable by Section 37(2)(a) of the Act is only an acceptance of a plea of
absence of jurisdiction, or of excessive exercise of jurisdiction and the refusal to proceed
further either wholly or partly.