Case Note & Summary
The applicant, TLG India Pvt. Ltd., filed an application under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator to resolve disputes arising from a Media Agency contract with the respondent, Rebel Foods Pvt. Ltd. The applicant was appointed as an Advertising Communication Partner via a Letter of Appointment (LOA) dated 13/04/2015. Invoices were raised under clause 3 of the LOA, but the respondent allegedly failed to pay despite no dispute raised. The applicant claimed an outstanding amount of Rs.1,53,01,864/- after adjusting payments. A notice invoking arbitration was sent on 09/11/2020, but the respondent refused, leading to the Section 11 application. The respondent opposed the application primarily on the ground of limitation, arguing that the claims were ex-facie time-barred and thus no subsisting dispute existed. The respondent relied on the Supreme Court decisions in BSNL v. Nortel Networks and CLP India v. Gujarat Urja Vikas Nigam Ltd. The court, after hearing both sides, held that the issue of limitation is a mixed question of fact and law and cannot be decided at the stage of Section 11 unless the claim is manifestly and ex-facie time-barred. The court found that the respondent's objection did not meet this high threshold and therefore appointed a sole arbitrator to adjudicate the disputes, including the issue of limitation.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Limitation - The court may refuse to appoint an arbitrator only in rare and exceptional cases where the claims are manifestly and ex-facie time-barred, making it clear that there is no subsisting dispute. The court must not conduct a mini-trial on limitation at the stage of Section 11 application. (Paras 1-2) B) Limitation Act - Ex-facie Time-Barred Claims - Section 3 of the Limitation Act, 1963 - The question of limitation is a mixed question of fact and law, and unless the claim is patently and obviously time-barred on the face of it, the court should leave the issue to be decided by the arbitrator. (Paras 2-3)
Issue of Consideration
Whether the court can refuse to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, on the ground that the claims are ex-facie time-barred.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties, including the issue of limitation.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- Limitation Act
- 1963
- Ex-facie time-barred claims
- Appointment of arbitrator
