In one of judgement, the Delhi High Court has held that the provision for filing written statements under Section 8 of the Arbitration and Conciliation Act is governed by the law of limitation.

The verdict came out in a case titled as SSIPL LIFESTYLE PRIVATE LIMITED v/s VAMA APPARELS (INDIA) PRIVATE LIMITED & ANR.

The Single Bench of Justice Prathiba M Singh has ruled that the period of limitation provided for filing written statements in CPC and Commercial Courts Act, 2015, would also apply to written statements filed under Section 8 of the Arbitration and Conciliation Act.

CASE PROCEEDINGS

The Petitioners herein argued that a Section 8 application, seeking the dispute between both the parties to be referred up arbitration, is maintainable as it was filed prior to the filing of any other substantive defence by the Petitioners.

The Defendants, on the other hand, argued that no arbitrable dispute exists between the parties as the period of limitation for filing of the Section 8 application has expired.

The questions arose before the Court were:

Whether there is a limitation period prescribed for filing of an application under Section 8 of the Arbitration and Conciliation Act?
Whether the limitation for filing of the written statement as prescribed in the Civil Procedure Code, 1908 as also the Commercial Courts Act, 2015 would be applicable for filing of a Section 8 application.

Senior Counsel Darpan Wadhwa, who was appointed as an Amicus in the case, submitted before the Court, during the hearing that there is a divergence of opinion on whether the time limit for filing the written statement would apply for filing of Section 8 application.

He went onto highlight that the Supreme Court in Booz Allen case had held that there is no such time limit, but the application must be filed `at the earliest'.

The Court, after analysing the submission from both the parties, observed at the outset that the difference in the language to the extent it is different, for the purpose of this case, is on the phrase "not later than when submitting" and "not later than the date of submitting".

The Court also observed that Article 8 of the UNCITRAL Model Law was followed in the un-amended Section 8. However, in the amended Section 8, there is a departure. In the un-amended Section 8, it is also settled that the objections as to Section 8 could be contained in the written statement itself and it is also settled that a Section 8 application could be moved along with the written statement itself.

Whether adding of the words 'the date of' in the amended section 8 means that the date for filing a written statement in a suit would be considered as the limitation period for filing of a Section 8 application?

On this, the Court observed:

'Viewed in the background of the amendments in the CPC including the recent amendments in CPC in the context of the Commercial Courts Act, 2015 and the amendments in the Arbitration Act, 2016, this Court concludes that the amendment is a conscious step towards prescribing a limitation period for filing the Section 8 application.'

The Court clarified that the mention of the word "date" in the amended provision means that it is a precise date and usually incapable of ambiguity. It is a crystallized date and not a 'period' prior to the filing of the first statement on the substance of the dispute.

It stated:

'The entire intention is that those parties who wish to proceed for arbitration ought to do so with alacrity and speed and not merely procrastinate.'

In view of the above observation, the Court dismissed the application and noted :

"The Defendant cannot defeat the intention behind the amendments in the Civil Procedure Code and the Arbitration Act, by choosing to file a Section 8 application at its own sweet will".

The judgement has been delivered by Justice Prathiba M Singh on 19-02-2020.

Read Judgement Here:

 

 

Share this Document :

Picture Source :