Facts: The Applicant, Edelweiss Financial Services Limited, entered into a Share Purchase Agreement (SPA) in 2007 with the Respondents. Disputes arose regarding restructuring obligations, leading to an initial arbitration where the Arbitrator dismissed the Applicant's claims in 2013, citing the illegality of specific SPA clauses. The Applicant challenged this under Section 34 of the Arbitration Act, and the Bombay High Court set aside the award on 27 March 2019, upholding the validity of the clauses. The Respondents unsuccessfully appealed this setting aside through Section 37 and a Special Leave Petition (SLP) to the Supreme Court, which was finally dismissed on 10 April 2023. The Applicant then issued a fresh notice under Section 21 on 25 November 2025 and subsequently filed this application for the appointment of a new arbitrator to hear the claims afresh.
Procedural Posture: The matter reached the Bombay High Court as a Commercial Arbitration Application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the constitution of an Arbitral Tribunal following the setting aside of a previous award.
Issue: Whether the application for appointment of an arbitrator under Section 11(6) is barred by limitation, and to what extent a referral court should examine the limitation of the substantive claims when an earlier award has been set aside.
Holding: The Court allowed the application, holding that the Section 11(6) application itself was within the three-year limitation period from the date of the fresh invocation notice. It further held that the question of whether the substantive claims are time-barred must be left to the Arbitral Tribunal.
Reasoning: The Court distinguished between two aspects of limitation: the limitation for filing the Section 11 application (governed by Article 137 of the Limitation Act) and the limitation of the substantive claims. Relying on the Supreme Court's decisions in "SBI General Insurance" and "Arif Azim", the Court reasoned that a referral court's jurisdiction is limited to a prima facie examination of the arbitration agreement's existence. While the Section 11 application must be filed within three years of the failure to appoint an arbitrator following an invocation notice, any "intricate evidentiary enquiry" into whether the underlying claims are "dead wood" or time-barred—especially involving exclusions under Section 43(4) of the Arbitration Act—should be decided by the Arbitral Tribunal to uphold the principle of "hands-off" judicial interference.