Arbitration clauses must be honored, and disputes regarding limitation can be addressed by the arbitrator, reinforcing that claims raised by either party do not void the arbitration process.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of Arbitrator - The petition for appointment of an arbitrator arises from disputes related to a work order for construction. The respondent acknowledged the existence of an arbitration clause but challenged the petition on the grounds of limitation. The court found the issue of limitation to be a mixed question of fact and law and ruled that the petition succeeded. (Paras 1-12)

(B) Limitation - The court held that despite claiming that the petition was barred by limitation, the respondent had also initiated claims under the arbitration clause, indicating a simultaneous acknowledgment of disputes requiring arbitration. (Paras 8, 10)

Facts of the case:
The petitioner, a contractor, sought arbitration after the respondent failed to pay the amount due for completed work under a construction contract that experienced delays attributed to the respondent. The respondent issued a notice claiming amounts against the petitioner.

Findings of Court:
The court appointed a retired High Court judge as arbitrator, allowing the petition for arbitration to proceed. The case raised important issues about the arbitration clause and limitations in claims.

Issues: Whether the arbitration petition was barred by limitation, and whether disputes fell under the arbitration clause of the contract.

Ratio Decidendi: The court determined that limitation issues should be adjudicated under arbitration, and both parties retained the right to raise claims within the arbitrator's purview.

Result: Petition succeeds; arbitrator appointed.

Table of Content
1. petition for appointment of arbitrator and contract details. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7)
2. respondent challenges petition on limitation grounds. (Para 8)
3. court permits both parties to raise all rights before arbitrator. (Para 9 , 11)
4. supreme court ruling on limitation and its application. (Para 10)
5. appointment of arbitrator and arbitration directions. (Para 12 , 13)

JUDGMENT

1. A petition under Section 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the Act") has been filed for appointment of the Arbitrator.

2. It is submitted in the petition that respondent sister concern M/s KLJ Town Planners Pvt. Ltd. had invited tender for "Residential Group Housing Project at Sector-77, KLJ Greens, Village Neemka, Faridabad, Haryana". The petitioner was declared as successful bidder. Respondent had issued a letter of intent bearing ref.no. KLJ/TP/FBD/2007-08/04 dated 09th January 2008 on total contractual amount of Rs.27,95,05,150/-. The fresh work order no. KLJ/TP/FBD/2007-08/05 dated 15th February, 2008 was issued by the respondent to the petitioner which contains the terms and conditions oi this work. As per Clause 7 of the Work Order dated 15th February, 2008, the period of completion of work was 30 months i.e. from 1st March, 2008 to 31st August, 2010. The defect liability period was 12 months from the date of handing over of the complete site in terms of clause 2 of letter of intent the work was not commenced as the drawing for excavation was given by the respondent company on 01st May, 2008 and setting layout plan, column layout plan and reinforcement details were given on 17th May, 2008 and 02nd June 2008 respectively, therefore, there was delay in execution of work from 1st March 2008 to 2nd June 2008, which was attributed to the respondent company. Till 17th March, 2015, the rates/scope and value of the contract were revised 20 times and the contractual amount increased to Rs.40,29,33,712/-.

3. The petitioner had completed the entire work on 30th April, 2017 and even prior to that handed over some towers, and the remaining towers were handed over before 10th May, 2017. The petitioner had also completely removed its T&P and materials from the site between 10th May, 2017 to 15th May, 2017.

4. The petitioner had submitted the Final Bill before 20th March, 2018 of the total amount of Rs.2,00,67,062/-. Several meetings were held between the partners of petitioner and the director and representatives of the respondent. Every time in the meetings, only assurances were given by the respondent company.

5. It is claimed that despite repeated verbal assurances given by the respondent for making due payment to the petitioner, the respondent has failed to honour its commitments.

6. The respondent sent a Notice dated 25th December, 2021 under Section 21 of the Act illegally claiming Rs.5,71,71,845/- against the Work Order no. 05 dated 15th February, 2008, no.07 dated 30th July, 2010 and no. 08 and 09 dated 10th June, 2012 awarded by the respondent to the petitioner, to which the petitioner had sent a reply dated 24th January, 2022. The petitioner had also petitioner had sent a legal notice dated 18th January, 2022 thereby invoking arbitration clause and raising legally tenable claims, which was responded by the respondent in their reply dated 15th March, 2022 denying the claims of the petitioner.

7. It is asserted that disputes have arisen between the parties in respect of release of amount for the work done by the petitioner. The Work Order dated 15th February, 2008 contained Arbitration Clause No. 28 which provides for settlement of disputes through Arbitration. A prayer is, therefore made that a Sole Arbitrator may be appointed.

8. Learned Counsel for the respondent has not disputed the Arbitration Clause for resolution of the disputes that may arise between the parties in respect of the Work Order, but has essentially challenged the present petition on the ground

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