Delhi High Court: In a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘the Act’), Prateek Jalan, J., allowing the petition, observed that the issue of limitation can be examined by the Court in a petition under Section 11 of the Act, only if the limitation is plainly apparent from the petition and the accompanying documents filed.
Background
The parties had entered into an agreement which included an arbitration clause, specifying arbitration as the dispute resolution mechanism under the Act, with New Delhi designated as the place of arbitration. Subsequently, disputes arose, leading the petitioner to invoke arbitration vide a notice served upon the respondents. The respondents contested the invocation, primarily arguing that it was barred by limitation. Although all respondents were served, respondent 8’s status regarding service was not explicitly stated. Respondent 8 had appeared through counsel in prior proceedings. Notably, respondent 3 had been served but had not entered appearance.
Decision and Analysis
The Court firstly analysed the jurisdiction of the Court in considering the issue of limitation at the pre-reference stage under Section 11 of the Act. Referring to judgments such as Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 and BSNL v. Nortel Networks (India) (P) Ltd., (2021) 5 SCC 738, the Court emphasized that the Court’s role at the pre-reference stage is limited to determining the prima facie existence of an arbitration agreement. The Court further said that final adjudication, even on issues like limitation, falls within the purview of the arbitral tribunal.
The Court noted that in this case, the existence of the arbitration clause was prima facie established, with no denial from appearing respondents, although there was controversy regarding the genuineness of the invocation and its timing, and hence, the Court concluded that such matters should be left for the arbitral tribunal to decide.
Consequently, the petition was allowed, and the disputes were referred to arbitration under the Delhi International Arbitration Centre (DIAC), with a request to nominate an arbitrator. The Court further directed the arbitrator to provide a declaration under Section 12 of the Act before commencing the reference. Additionally, it was clarified that all respondents, including those who had not entered appearance, would be served afresh in the arbitration proceedings, with their rights and contentions, including those regarding limitation and maintainability of claims, left open for adjudication before the arbitrator.
[Kimaya Buildtech LLP v. K. C. Software Pvt. Ltd, 2024 SCC OnLine Del 3436, Order dated 29.04.2024]
Advocates who appeared in this case :
Advocates for the Petitioner: Mohit Nandwani
Advocates for the Respondents: Anshu Mahajan, Mamta Wadhwa, Arunabh Banerjee, Debashish Bhawmik
Buy Arbitration and Conciliation Act, 1996 HERE
