Summary
A Section 11(6) arbitration petition and the underlying claims face separate limitation inquiries. The petition here was timely, and the claims were not ex facie dead when arbitration commenced; the Court appointed a sole arbitrator while leaving the merits and limitation defences open.
Issues
- Whether the Limitation Act applies to a petition under Section 11(6) and whether this petition was filed within time.
- Whether the court may refuse reference where the underlying claims are ex facie time-barred, and whether the claims here were dead when arbitration commenced.
Provisions considered
- Sections 11(6), 21 and 43, Arbitration and Conciliation Act, 1996The Court applied a three-year limitation period to the Section 11(6) petition, measured from failure to comply with the arbitration invocation notice. Separately, Section 21 fixes commencement of arbitration for assessing limitation of the claims. The referral court may refuse reference where claims are manifestly dead, but disputed limitation questions ordinarily go to the tribunal. (¶¶ 57, 60, 67, 69, 70, 86, 89, 90, 91)
- Articles 55 and 137; Sections 5–20, Limitation Act, 1963Article 137’s three-year period applies to a Section 11(6) application in the absence of a specific statutory period. The underlying contractual claims were assessed separately; mere correspondence or settlement discussions do not by themselves extend limitation. (¶¶ 57, 58, 71, 72, 73, 86, 89, 90, 91)
Held
- Limitation of the Section 11(6) application and limitation of the underlying claims are distinct questions. The court must consider whether the appointment petition is timely and whether the claims are ex facie dead when arbitration commences; it may refuse referral if either inquiry is answered against the applicant. (¶¶ 65, 89)
- At referral, limitation of the claims is ordinarily an admissibility question for the arbitral tribunal. The court may screen claims only on a prima facie basis where they are manifestly and ex facie dead; it should not conduct a mini-trial on contested facts. (¶¶ 67, 69, 70)
- Mere correspondence or settlement discussions do not postpone accrual of a cause of action or extend limitation. On the facts here, however, the Section 11(6) petition was filed within three years of non-compliance with the invocation notice, and the notice itself was issued within three years of accrual of the cause of action; the claims therefore were not ex facie time-barred at commencement. (¶¶ 71, 72, 73, 89, 90, 91)
Result
Petition allowed; Justice Sanjay Kishan Kaul (Retd.) was appointed sole arbitrator. All other rights and contentions, including those on the claims, were left open for determination by the tribunal.