Summary
The Supreme Court held that Article 137 governs limitation for a Section 11 application, running from failure to appoint an arbitrator, separately from limitation for the underlying claims. Although Nortel’s appointment application was timely, its substantive claims had become manifestly stale before arbitration was invoked. The Court permitted refusal of reference in the rare case where there was no doubt that the claims were time barred and no subsisting dispute remained, while preserving the tribunal’s role over arguable limitation questions.
Issues
- Which limitation period governs an application for appointment of an arbitrator.
- Whether the referral court could refuse reference where the substantive claim was manifestly time barred.
Provisions considered
- Article 137, Limitation Act, 1963The residual three-year period governed the appointment application, beginning on failure to appoint rather than accrual of the underlying contract claim. (¶¶ 9-18, 40)
- Section 11(6) and (6A), Arbitration and Conciliation Act, 1996The Court applied narrow referral-stage scrutiny and refused reference of an indisputably stale claim. (¶¶ 23-29, 36-41)
- Sections 21 and 43, Arbitration and Conciliation Act, 1996Commencement by arbitration notice and application of limitation to arbitration required examining whether the underlying claim was alive when invoked. (¶¶ 9, 11-12, 38-39)
- Article 55 and Section 9, Limitation Act, 1963Contract claims accrued upon rejection; correspondence and settlement discussion did not by themselves stop or restart the running period. (¶ 38-39)
Held
- Appointment limitation and substantive claim limitation are distinct. Article 137 applies to the former; the application in this case was within that period. The suggested shorter statutory deadline required legislative action and was not imposed by the Court. (¶¶ 9-18, 40)
- Limitation ordinarily concerns admissibility of the claim rather than the tribunal’s jurisdiction and is for the tribunal. Referral-stage intervention is exceptional: any real doubt requires reference rather than elaborate merits review. (¶ 30-37)
- BSNL rejected the claim in August 2014, but arbitration was invoked only in April 2020. Nortel pleaded no intervening event extending limitation; correspondence or settlement discussions did not save the claim. It was therefore manifestly stale when invoked. (¶ 38-39)
- The appointment and review orders were set aside and the Section 11 application dismissed, notwithstanding its own timeliness. (¶ 40-41)
Result
Appeals allowed; High Court orders set aside and Section 11 application dismissed.