IMPORTANT POINTS
(1) Limitation is a mixed question of fact and law.
(2) In view of provisions of Section 16 of Arbitration and Conciliation Act, 1996 and legislative policy to restrict judicial intervention at pre-reference stage, issue of limitation would require to be decided by Arbitrator.

ORDER :

1. The issue which has arisen for consideration is whether the High Court was justified in rejecting the application filed under Section 11 for reference to arbitration, on the ground that it was barred by limitation.

2. The factual background of the case arises from an agreement dated 21.12.2010 entered into between the parties, under which the Petitioner-Contractor was to provide security to the Respondent-Company around the clock on need basis, as per the agreed contractual rates. The Agreement contained an arbitration clause which reads as follows:

“13. Arbitration:

13.1 If any dispute, difference, question or disagreement shall at any time hereafter arise between the parties hereto or the respective or assigns in connection with or arising out of or in respect of contract, application of provision thereof, anything thereunder contained or arising thereunder or as to rights, liabilities or duties of the said parties hereunder or any matter whatsoever incidental to this contract shall be referred to the sole Arbitration of the person appointed by Director (Pers.) of NCL. CONTRACTOR shall have no objection to any such appointment that the arbitrator so appointed is an employee of NCL or that he had dealt with the matter to which the contract related and that in the course of his duties as NCL employees he has expressed views on all or any of the matter of disputes or difference.

13.2 If the arbitrator to whom the matter is originally by referred dies or refused to act or resigns for any reason from the position of arbitrator, it shall be lawful, for Director (Pers.) of NCL to appoint another person to act as Arbitrator. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor or to precede denovo.

13.3 It is agreed that no person other than the person appointed by Directed (Pers.) of NCL as aforesaid shall act as Arbitrator.

13.4 It is term of the contract that the CONTRACTOR shall not stop the work under this contract and the work shall continue whether the arbitration proceedings were commenced or not.

13.5 It is term of this contract that the parties invoking the arbitration shall specify the dispute to be referred for arbitration.

13.6 The Arbitrator shall give reasoned award in respect of each of the difference referred to him. The award as aforesaid shall be final and binding on all the parties to this contract in accordance with the law.

13.7 The venue of arbitration shall at Singrauli in India and subject as aforesaid, the provisions of Indian Arbitration and Conciliation Act, 1996 and any statutory modification or reenactment thereof and rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.”

(Emphasis supplied)

3. Disputes arose between the parties with respect to payment of amounts under the contract by the Respondent-Company, and the deduction of the security amount from the running bills.

The Petitioner-Contractor issued a Legal Notice dated 29.05.2013 demanding payment of amounts to the tune of Rs. 1,43,69,309/- alongwith interest from the Respondent- Company.

4. On 09.03.2016, the Petitioner-Contractor issued a Notice of Arbitration calling upon the Respondent-Company to nominate a Sole Arbitrator in terms of the arbitration clause, to adjudicate the disputes between the parties.

The Respondent-Company did not respond to the Notice dated 09.03.2016.

5. The Petitioner-Contractor sent a further notice on 30.05.2016 to the Respondent- Company proposing the name of Mr. Jai Singh, a retired Additional District Judge for appointment as the Sole Arbitrator.

The Respondent-Company did not respond to this Notice as well.

6. The Petitioner-Contractor filed an Application on 20.09.2016, under Section 11 invoking the default power of the High Court to make the appointment of a sole arbitrator.

7. The High Court vide the impugned Order held that the claims of the Petitioner- Contractor were barred by limitation, and