Mohabat Limited issued a notice on 4th April 2021 to Construct Coy (The other Party to the Agreement executed between them) requesting appointment of an Arbitrator as per their agreement. Construct Coy did not respond. A

Rule: Section 11(6) of Arbitration and Conciliation Act, 1996: Court may appoint an arbitrator where a party fails to act as required. Article 137, Limitation Act, 1963: Residual limitation period of 3 years applies to Section 11 applications (from the date when the right to apply accrues). Judicial precedent: The facts of the given situation can be examined with the help of the case M/S Arif Azim Co Ltd v. M/S Aptech Ltd. decided by Supreme Court on 1st March, 2024. In this case, inter alia the following two important questions were considered: Whether the Limitation Act, 1963 is applicable to an application for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996? Whether the court may refuse to make a reference under Section 11 of Act, 1996 where the claims are ex-facie and hopelessly time-barred? The Apex court inter alia has laid down that the plain reading of Section 11(6) of the Act, 1996, which provides for the appointment of arbitrators, indicates that no time-limit has been prescribed for filing an application under the said section. However, Section 43 of the Act, 1996 provides that the Limitation Act, 1963 would apply to arbitrations as it applies to proceedings in court. Since none of the Articles in the Schedule to the Limitation Act, 1963 provide a time period for filing an application under Section 11(6) of the Act, 1996, it would be covered by Article 137 of the Limitation Act, 1963 which is the residual provision. In his authoritative commentary, "International Commercial Arbitration, Wolters Kluwer, 3rd Edition, pp. 2873-2875", Gary B. Born has observed that as a general rule, limitation statutes are applicable to arbitration proceedings. The Apex Court laid down that having traversed the statutory framework and case law, we are of the clear view that there is no doubt as to the applicability of the Limitation Act, 1963 to arbitration proceedings in general and that of Article 137 of the Limitation Act, 1963 to a petition under Section 11(6) of the Act, 1996 in particular. The following paragraph may also be referred, "Thus, from an exhaustive analysis of the position of law on the issues, we are of the view that while considering the issue of limitation in relation to a petition under Section 11(6) of the Act, 1996, the courts should satisfy themselves on two aspects by employing a two-pronged test - first, whether the petition under Section 11(6) of the Act, 1996 is barred by limitation; and secondly, whether the claims sought to be arbitrated are ex-facie dead claims and are thus barred by limitation on the date of commencement of arbitration proceedings. If either of these issues are answered against the party seeking referral of disputes to arbitration, the court may refuse to appoint an arbitral tribunal." COVID-19 EXTENSION: COVID-19 extension (SC orders): Period from 15.03.2020 to 28.02.2022 excluded for limitation computation. This will not have effect on the given case. APPLICATION: Mohabat Limited issued notice on 4 April 2021. Construct Coy failed to appoint arbitrator → cause of action arose shortly thereafter (reasonable time ~30 days). Limitation (3 years) as per Limitation Act, 1963 would ordinarily expire around May 2024. Ongoing Communications: As per Arif v. Aptech , mere negotiations do not extend limitation unless there is clear acknowledgment of liability. No such acknowledgment is indicated → argument weak. Ex Facie Time-Barred Claim: If the underlying dispute itself is stale (beyond 3 years without acknowledgment), court may refuse appointment. ( BSNL v. Nortel principle). However, if there is any arguable issue, courts generally prefer referring to arbitration. The Court while considering a Section 11 petition is therefore required to undertake a two-fold inquiry: whether the Section 11 application itself is within limitation; and whether the substantive claims proposed to be referred to arbitration are ex facie dead or hopelessly time-barred. Only where either issue is answered against the applicant may the Court decline appointment of an arbitrator. Conclusion: Section 11(6) application is likely time-barred, even after considering COVID-19 exclusion. Ongoing discussions alone do not save limitation. If the underlying claim is clearly stale, the court may refuse appointment; otherwise, it may still refer the matter to arbitration for adjudication.