M/S.Ram Prasad Tubers And Bars (P) ... vs M/S.Faurecia Emissions Control ...
2022 Latest Caselaw 16812 Mad

Citation : 2022 Latest Caselaw 16812 Mad
Judgement Date : 26 October, 2022

Madras High Court

M/S.Ram Prasad Tubers And Bars (P) ... vs M/S.Faurecia Emissions Control ... on 26 October, 2022

Arb.O.P.(Comm.Div.) No.192 of 2022

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 26.10.2022

CORAM

THE HONOURABLE MR.JUSTICE SENTHILKUMAR
RAMAMOORTHY

Arb.O.P.(Comm.Div.) No.192 of 2022

M/s.Ram Prasad Tubers and Bars (P) Ltd.
Rep. By its Directors, Mr.J.Vidya Prakash
S/o. Mr.Jegannathan,
Registered Office at No.818/1,
Samanaickenpalayam,
No.4, Veerapandi (Po),
Coimbatore-641 019. .. Petitioner
vs.

M/s.Faurecia Emissions Control Technologies India (P) Ltd.
Rep. By its Managing Director,
No.449A, Pondhur Village,
SHG57, Sriperumbudur Taluk,
Kancheepuram District. ... Respondents

PRAYER: Arbitration Original Petition filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996, prayed to appoint a Sole Arbitrator
to adjudicate upon the disputes arisen between the Petitioner and
Respondent under the Tooling Agreement dated 01.06.2014.
For Petitioner : Mr.S.Senthil

1/7

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Arb.O.P.(Comm.Div.) No.192 of 2022

For Respondents : Mr.T.K.A.Padmanaban

ORDER

The petitioner entered into a tooling agreement on 01.06.2014 in

relation to the manufacture and supply of tools to the respondent. The said

agreement admittedly contains an arbitration clause. After issuing a notice

dated 25.09.2021 under Section 21 of the Arbitration and Conciliation Act

1996 (the Arbitration Act), the present petition is instituted.

2. Learned counsel for the petitioner submits that a civil suit was filed

(O.S.No.430 of 2017) in respect of the dispute between the petitioner and

the respondent before the first Additional District Judge, Coimbatore. The

respondent filed an application under Section 8 of the Arbitration Act and,

by order dated 29.04.2019, the Court directed parties to resolve disputes

through arbitration. Therefore, learned counsel for the petitioner contends

that the petitioner is entitled to the benefit of Section 14 of the Limitation

Act 1963 (the Limitation Act). If such benefit is extended, it is contended

that the claims are within the period of limitation.

https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div.) No.192 of 2022

3. These contentions are refuted by learned counsel for the

respondent. While admitting that the tooling agreement contains an

arbitration clause, learned counsel for the respondent submits that the claims

of the petitioner are hopelessly barred by limitation. By asserting that the

cause of arbitration arose in or about 13.06.2016, learned counsel points out

that the order of the Additional District Judge was issued on 29.04.2019,

whereas the Section 21 notice was issued on 25.09.2021. Therefore, he

contended that the facts disclose that the petitioner did not prosecute the

action with due diligence or in a bona fide manner. In support of this

contention, he relied upon the judgments of the Hon'ble Supreme Court in

Suryachakra Power Corporation Limited v. Electricity Board and Others

(2016) 16 SCC 152, particularly paragraph 9 thereof, and Ramji Pandey &

Others v. Swaran Kali (2010) 14 SCC 492, particularly paragraph 17

thereof. With reference to the judgment in Bharat Sanchar Nigam Limited

(BSNL) & Anr. v. Nortel Networks India Pvt. Ltd. (2021) 5 SCC 738, he

submitted that the Section 21 notice should be received within three years

from the cause for arbitration. If not, the claim is time barred. If computed

from 13.06.2016, the Section 21 notice dated 25.09.2021 is time-barred.

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4. At the outset, it should be recognized that limitation is a mixed

question of fact and law unless the question of limitation can be decided as

a pure question of law on the basis of facts admitted by the contesting

parties. This case cannot be characterized as one in which there is consensus

between the parties on the facts constituting the cause of action. In BSNL,

the Hon'ble Supreme Court recognized the distinction between the

limitation period for filing a petition under Section 11 of the Arbitration Act

and the limitation period for presenting claims before the arbitral tribunal.

In paragraph 40 of the judgment, the Hon'ble Supreme Court analyzed the

distinction between issues relating to jurisdiction and admissibility and

concluded that the issue of limitation pertains to admissibility of the claims

and not to the jurisdiction of the arbitral tribunal. Therefore, it was decided

that the issue of limitation should ordinarily be decided by the arbitral

tribunal. Thereafter, in paragraph 47, the Hon'ble Supreme carved out a

limited exception to this rule. Paragraph 47 reads as under:

“47. It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may

https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div.) No.192 of 2022

decline to make the reference. However, if otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.”

5. Thus, as per the law laid down by the Hon'ble Supreme Court, a

request for reference to arbitration should be declined on the ground of

limitation only if the claim is ex facie time-barred and the Court is in no

doubt at all that the claim is barred by limitation. Applying this principle to

the facts of this case, the petitioner filed a suit on or about 31.07.2017 and

the said suit was rejected on account of the arbitration clause on

29.04.2019. Therefore, the question arises as to whether the petitioner is

entitled to the benefit of Section 14 of the Limitation Act. This question

should be decided by the arbitral tribunal and not by this Court in exercise

of jurisdiction under Section 11. Therefore, all the judgments cited by

learned counsel for the respondent on this issue would be relevant when the

arbitral tribunal decides the issue of limitation, whether as a preliminary

issue or otherwise. From the limited facts on record, it is not possible to

conclude that the claims are ex facie time-barred. Therefore, the benefit of

https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div.) No.192 of 2022

doubt should be extended to the petitioner by leaving it open to the arbitral

tribunal to decide the issue of limitation in an appropriate manner.