Recently, the Jammu and Kashmir High Court dismissed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The Court held that the petition was barred by limitation and emphasised the importance of adhering to statutory timelines for initiating arbitration proceedings.
The petitioner invoked the arbitration clause in 2001, requesting the appointment of an arbitrator after a contractual dispute arose with the respondents. Despite this invocation, no further action was taken for over two decades. The petitioner filed the current petition in 2023, alleging that the respondents failed to appoint an arbitrator as required under the agreement. The petitioner previously sought interim relief under Section 9 of the Arbitration Act in 2003, which was granted temporarily but later dismissed in 2004. Despite this, the petitioner failed to initiate arbitration proceedings within the statutory timeframe or act upon the interim protection granted during the pendency of the Section 9 application.
The Court thoroughly examined the petition and the facts, concluding that the petitioner failed to comply with the limitation provisions under the Arbitration and Conciliation Act and the Limitation Act, 1963.
The Court referred to Section 21 of the Arbitration Act, which states that arbitral proceedings commence on the date a request for arbitration is received by the other party. In this case, the petitioner served a notice invoking arbitration in 2001 but filed the present petition after a lapse of 22 years. The Court emphasized that subsequent correspondence or reminders do not extend the limitation period.
Additionally, the Court relied on Geo Miller & Co. Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd. and B and T AG v. Ministry of Defence, reiterating that arbitration claims must be filed within three years from the date the right to apply accused. It noted, “Mere negotiations or exchange of letters cannot extend the statutory limitation period. The legislature has prescribed a three-year limit for filing such claims, which cannot be circumvented through prolonged correspondence”. The Court also observed that under Section 9(2) of the Arbitration Act, arbitral proceedings must commence within 90 days of an interim protection order. The petitioner failed to act within this timeframe after the interim order was granted in 2003, further rendering the petition time-barred.
The Court held that the petition was ex-facie barred by limitation and dismissed it as meritless. The judgment underscores the need for timely initiation of arbitration proceedings to uphold the legislative intent of expeditious dispute resolution.
Case Title: M/s Mir Sons Constructions Pvt. Ltd v. Union Territory of J&K & Ors.
Citation: Arb P No.15/2023
Order Date: 06.12.2024
Coram: Chief Justice Tashi Rabstan
Advocate for Petitioner: Adv. B. A. Malla
Advocate for Respondent: Adv. Faheem Nissar Shah
Read Order @LatestLaws.com
Picture Source :