Case Note & Summary
The applicants, Vishwajit Sud & Co. and Vishwajit Infrastructure Pvt. Ltd., filed two applications under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitral tribunal to adjudicate disputes arising from sub-contract agreements dated 10 August 2017 and 22 September 2018. The applicants were appointed as sub-contractors by the respondent, L & T Stec JV, for excavation work at Hutatma Chowk and Churchgate Station for the Mumbai Metro Rail Corporation Ltd. The applicants claimed that they had completed the work but the respondent refused to pay the amounts due. In October 2020, the applicants, facing financial difficulties, requested release of funds, but the respondent allegedly coerced them into agreeing to a settlement on 12 October 2020, which the applicants later repudiated. The respondent opposed the applications, arguing that there was no dispute as the applicants had accepted the settlement, and that the claims were time-barred. The Court, after considering the submissions, held that the existence of an arbitration clause was undisputed, and the respondent's refusal to pay indicated a dispute. The Court further held that the issue of limitation is a mixed question of fact and law to be decided by the arbitrator, not at the Section 11 stage. Accordingly, the Court appointed a sole arbitrator to adjudicate the disputes.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Existence of Dispute - The applicants sought appointment of an arbitrator for disputes arising under sub-contract agreements for excavation work. The respondent contended that there was no dispute as the applicants had accepted a settlement and that the claims were time-barred. The Court held that the existence of a dispute is evident from the respondent's refusal to pay, and limitation is a mixed question of fact to be decided by the arbitrator. (Paras 1-10) B) Arbitration Law - Limitation - Section 11 of the Arbitration and Conciliation Act, 1996 - Mixed Question of Fact - The Court held that the issue of limitation is a mixed question of fact and law which should be left to the arbitrator to decide, and not be determined at the stage of appointment under Section 11. (Paras 8-10)
Issue of Consideration
Whether an arbitrator should be appointed under Section 11 of the Arbitration and Conciliation Act, 1996 when the respondent disputes the existence of a dispute and raises limitation objections.
Final Decision
The Court allowed the applications and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- appointment of arbitrator
- existence of arbitration clause
- dispute existence
- limitation as mixed question of fact
- coercion in settlement agreement
