HC expounded: Issue of limitation in the Substantive Claim has to be decided in the main Arbitration Proceedings by the Tribunal and not by the Court

 

The Bombay High Court allowed an application filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of the Sole Arbitrator for resolving the disputes that arose between the parties out of the contract of the Media Agency. The Court observed that the main claim of the applicant is not hopelessly time-barred and hence it would be appropriate to appoint an arbitrator.

Brief Facts:

The applicant was appointed as an Advertising Communication Partner by the respondent. In furtherance of the said arrangement, invoices were raised by the applicant. The applicant alleges that the respondent, though never raising any dispute in respect to the services provided or invoices raised, failed to make the payments in terms of the Agreement.

As per the applicant, after adjusting all the payments made by the respondent, an amount of Rs.1,53,01,864/- is payable by the respondent. In the wake of the aforesaid, the applicant addressed a notice to the respondent on 09/11/2020, invoking the arbitration agreement. The respondent refused to accede to the request.

Hence, the present application has been filed before the Court, under Section 11, seeking the appointment of the Arbitrator in the exercise of powers conferred upon the Court.

 

Contentions of the Respondent:

The Counsel for the Respondent opposed the relief sought in the application by raising the point of limitation. He argued that the claim rose by the applicant, after a gap of four years is ex-facie time-barred and, therefore, the Court shall not entertain the application, seeking appointment of the Arbitrator.

Observations of the Court

The Court was of the view that reference may be refused if, on admitted facts, it is noticed that the claims are clearly barred by limitation at the time of passing of an order under Section 11. Therefore, it was held that while the limitation period for filing a petition seeking the appointment of an arbitrator or reference or disputes to the arbitration is to be examined by the Court, the limitation aspect of the substantive claims is to be looked into by the arbitral tribunal and not by the Court. The only exception is if the claim to be referred to arbitration is hopelessly barred by limitation and this would be apparent from the admitted facts and documents. Whether the main claim is time-barred or not is an issue on merits and it should be decided in arbitration proceedings.

The decision of the Court:

The Bombay High Court, allowing the application, held that the present case is not a case of a dead claim, hopelessly barred by limitation. The Court exercised its power to appoint an arbitrator. 

 

Case Title: TGL India Pvt Ltd. v Rebel Foods Pvt. Ltd.

Coram: Hon’ble Justice Bharati Dangre

Case no.: COMM. ARBITRATION APPLICATION (L) NO.28026 OF 2021

 

Advocate for the Applicant: Ms. Dushyant Krishnan

Advocate for the Respondent: Mr. Piyush Raheja, Mr. Akash Mehta, and Mr. Aditya

Read Judgment ;

 

 

Social media is bold. 

Social media is young.

Social media raises questions.

 Social media is not satisfied with an answer.

Social media looks at the big picture.

 Social media is interested in every detail.

social media is curious.

 Social media is free.

Social media is irreplaceable.

But never irrelevant.

Social media is you.

(With input from news agency language)

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