Case Note & Summary
The applicant, Shri U.V. Uttamchandani, proprietor of Udhaygiri Engineers, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator in terms of clause 8 of an agreement dated 15th October 1997 entered into with the respondents, M/s. Gleb Engineers Pvt. Ltd. and its directors. Disputes arose between the parties, and the applicant raised a demand by letter dated 14th October 2002, which the respondents refuted. The applicant invoked the arbitration agreement by notice dated 7th December 2002, suggesting appointment of an arbitrator from the panel of the Indian Council of Arbitration. After further correspondence, the respondents by their advocate's letter agreed to refer all disputes to arbitration and requested the applicant to suggest five names from the Indian Council of Arbitration panel. The applicant suggested five names by letter dated 18th August 2006, but the respondents did not respond. Consequently, the applicant filed the present application on 2nd March 2009. The respondents opposed the application primarily on the ground of limitation, arguing that the application was filed more than three years after the initial notice of demand in 2002. The court considered the issue of limitation and held that the right to apply for appointment of an arbitrator accrued only after the respondents failed to respond to the applicant's letter of 18th August 2006, as the respondents had agreed to arbitration in 2006. Since the application was filed on 2nd March 2009, it was within three years from that date and thus not barred by limitation. The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Headnote
A) Arbitration - Appointment of Arbitrator - Limitation - Section 11(6) of the Arbitration and Conciliation Act, 1996 read with Article 137 of the Limitation Act, 1963 - The court considered whether the application for appointment of arbitrator was barred by limitation, as the initial notice invoking arbitration was sent in 2002 but the application was filed in 2009. The court held that since the respondents had agreed to arbitration in 2006 and the parties were in correspondence, the right to apply accrued only after the respondents failed to respond to the applicant's letter of 18th August 2006 suggesting names of arbitrators. The application filed on 2nd March 2009 was within three years from that date and thus not barred by limitation. (Paras 2-3)
Issue of Consideration
Whether the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is barred by limitation as it was filed more than three years after the initial notice invoking arbitration.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Limitation for filing application under Section 11 of the Arbitration and Conciliation Act
- 1996 is governed by Article 137 of the Limitation Act
- 1963
- which provides a period of three years from the date when the right to apply accrues
- but the court may consider the conduct of parties and the fact that the respondents agreed to arbitration after the initial notice.
