Case Note & Summary
The applicant, Kakade Infrastructure Pvt. Ltd., filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to adjudicate disputes arising out of a Concession Agreement with the State of Maharashtra. The dispute pertained to a BOT project for development of government colony in Bandra, Mumbai. The applicant was the successful bidder, and a letter of acceptance was issued on 27 July 2010, requiring payment of Rs.146.45 crores upfront and performance security. The applicant alleged that the respondent failed to hand over the site and provide necessary approvals, causing delays and losses. The applicant invoked the arbitration clause. The respondent opposed the application, primarily contending that the claim was barred by limitation. The court examined whether the issue of limitation should be decided at the stage of appointment of an arbitrator. Relying on the principle that limitation is an arbitrability issue, the court held that it is for the arbitral tribunal to decide. The court found that there was a valid arbitration agreement between the parties and that the disputes fell within its scope. Accordingly, the court appointed a sole arbitrator to adjudicate the disputes. The court did not express any opinion on the merits of the claim or the limitation defense.
Headnote
A) Arbitration Law - Appointment of Arbitrator under Section 11(6) - Existence of Arbitration Agreement - The applicant sought appointment of an arbitrator under a Concession Agreement for a BOT project. The respondent objected on the ground that the claim was barred by limitation. The court held that the issue of limitation is an arbitrability issue to be decided by the arbitral tribunal, not by the court at the stage of appointment under Section 11(6). The court found that there was an arbitration agreement between the parties and appointed a sole arbitrator. (Paras 1-10) B) Arbitration Law - Limitation as Arbitrability Issue - The court relied on the principle that the question of limitation is a matter for the arbitrator to decide, as it goes to the merits of the claim. The court distinguished between the existence of an arbitration agreement and the arbitrability of the claim, holding that the latter includes limitation. (Paras 8-10)
Issue of Consideration
Whether the court can appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the respondent raises a preliminary objection that the claim is barred by limitation, and whether such objection is to be decided by the court or the arbitral tribunal.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties. The court held that the issue of limitation is an arbitrability issue to be decided by the arbitral tribunal.
Law Points
- Section 11(6) of the Arbitration and Conciliation Act
- 1996
- appointment of arbitrator
- limitation as arbitrability issue
- existence of arbitration agreement
- concession agreement
- BOT project
