VidhiSangh

Supreme Court of India · 18/05/2023

M/S B AND T AG versus MINISTRY OF DEFENCE

[2023] 7 S.C.R. 599 · 2023 INSC 549

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Summary

The Court rejected a Section 11 petition seeking arbitration of a defence-supply dispute because the underlying claim was manifestly time-barred. The Ministry’s encashment and recovery of liquidated damages in 2016 crystallised the dispute; later requests and asserted bilateral negotiations did not keep it alive until the 2021 arbitration notice. The Court distinguished limitation for the substantive claim from limitation for an application to appoint an arbitrator.

Issues

  1. Whether an appointment court may refuse reference where the underlying claim is ex facie time-barred.
  2. How limitation for a Section 11 application differs from limitation for the claim to be arbitrated.
  3. Whether the contract’s bilateral-discussion clause and alleged subsequent negotiations postponed accrual or suspended limitation.
  4. When the dispute crystallised on the Ministry’s encashment and recovery actions.

Provisions considered

Held

Result

Section 11 petition rejected because the underlying claim was manifestly time-barred; no arbitral tribunal appointed. Pending applications disposed of.

Judgment PDF: Supreme Court of India, [2023] 7 S.C.R. 599.