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SUPREME COURT OF INDIA
Dipankar Datta, Augustine George Masih, JJ.
Offshore Infrastructures Limited – Appellant
Versus
M/s Bharat Petroleum Corporation Limited – Respondent
Civil Appeal Nos. 12529-12530 of 2025 (Arising Out of SLP (C) No. 22105-22106 of 2024)
Decided On : 07-10-2025
The legal principles from this case are:
Arbitration Validity Despite Statutory Changes: Even if contractual arbitration clauses become invalid due to legislative amendments, the core arbitration agreement remains enforceable. Courts will interpret such clauses purposively, ensuring the arbitration mechanism continues to function (!) (!) .
Court’s Authority to Appoint Arbitrators: The court can appoint an arbitrator when the contractual appointment clause is invalid or inoperative, to ensure dispute resolution proceeds fairly and impartially (!) (!) .
Limitation Periods: The limitation starts from the date the final bill becomes due or the dispute is asserted. Typically, this is a three-year period, but it can be extended due to extraordinary circumstances (!) (!) .
Impact of Exceptional Circumstances: Extraordinary events, such as a pandemic, can lead to exclusion or extension of limitation periods to prevent injustice (!) (!) .
Timeliness of Filing: Applications filed within the extended limitation period are considered timely, especially when delays are caused by unavoidable circumstances (!) .
Legislative Intent and Arbitration Policy: The law aims to ensure neutrality and fairness in arbitration, guiding courts to interpret arbitration clauses in line with these objectives (!) (!) .
Judicial Role in Arbitrator Appointment: Courts have a duty to appoint arbitrators when the contractual or statutory mechanisms are invalid, to uphold the arbitration process and dispute resolution (!) (!) .
In summary, arbitration clauses should be interpreted broadly and purposively; courts can appoint arbitrators when necessary; and limitation periods may be extended during extraordinary events.
| Table of Content |
|---|
| 1. background of arbitration application and timeline (Para 2 , 3 , 4 , 5 , 6) |
| 2. arguments presented by both parties regarding limitation and arbitration clause (Para 10 , 11 , 12 , 13 , 14) |
| 3. court's analysis on the validity of the arbitration clause (Para 15 , 16 , 17 , 18 , 20) |
| 4. court's determination of limitation period and covid-19 impact (Para 21 , 22 , 23 , 24) |
| 5. final judgment and orders pronounced by the court (Para 25 , 26 , 27 , 28 , 29) |
JUDGMENT :
Augustine George Masih, J.
1. Leave granted.
2. The instant Civil Appeals assail the Judgment and Order dated 10.04.2024 passed in Review Petition No. 76 of 2024 and Judgment and Order dated 19.12.2023 passed in Arbitration Case No. 23 of 2022 by the High Court of Madhya Pradesh at Jabalpur (“High Court”).
3. The High Court vide Judgment and Order dated 19.12.2023 in Arbitration Case No. 23 of 2022 has refused to appoint an arbitrator and dismissed the application filed under section 11 of the Arbitration and Conciliation Act, 1996 (“1996 Act”) by the Appellant on the ground that the application is time-barred. The subsequent Review Petition No. 76 of 2024 filed by the Appellant was also dismissed by the High Court vide Judgment and Order dated 10.04.2024.
4. The Appellant herein is Offshore Infrastructures Limited, a Company incorporated under the Companies Act, 1956, having its registered office at Mulund Goregaon, Mulund (West) Mumbai. The Respondent is Bharat Oman Refineries Limited, which was merged to M/s Bharat Petroleum Corporation Limited with effect from 01.07.2022, having its registered office at Bharat Bhavan Ballard Estate, Mumbai.
5. The crux of the matter is that the Respondent had invited tenders for execution of composite works pertaining to the establishment of a new Modular Penex Unit along with associated works required for the revamp and capacity enhancement at the Bina Refinery. Upon completion of the tendering process, the work was awarded to the Appellant vide letter of acceptance dated 31.12.2016. As per the terms of letter of acceptance, the work awarded to the Appellant was to be completed within a period of five months, i.e. 30.05.2017. However, the work could not be completed within the stipulated time, and ultimately the work came to be completed on 31.01.2018. The Appellant raised the final Bill bearing RA Bill No. 7 on 20.03.2018 and thereafter a “No Claim Certificate” was issued by the Appellant on 03.10.2018. The completion certificate was issued on 05.02.2019. The final bill was released on 26.03.2019. The Respondent released part payment to the Appellant on 11.06.2019 and liquidated damages of 5% was deducted on account of delay. The Appellant on 26.04.2021, issued a consolidated claim of all its outstanding dues.
6. Subsequently, the Appellant on 14.06.2021 issued a notice to Managing Director of the Respondent for appointment of Arbitrator as per Clause 8.6 of General Conditions of the Contract (“GCC”) stating that as per Clause 8.6 of GCC, the Arbitrator named is Managing Director of Bharat Oman Refineries Limited or an officer of Bharat Oman Refineries Limited who may be nominated by the Managing Director, however, in view of the provisions of the 1996 Act (as amended by Act 3 of 2016, w.e.f. 23.10.2015), neither the Managing Director nor an officer is entitled to act as an Arbitrator in the matter, therefore suggest names of at least four qualified persons unconnected with either party to be selected as Sole Arbitrator in the matter. The Respondent refused to entertain the claims via communication dated 02.07.2021.
7. Aggrieved by the failure of the Respondent to appoint the Arbitrator, the Appellant has filed Arbitration Case No. 23 of 2022 under Section 11 (6) of the 1996 Act before the High Court seeking appointment of Sole Arbitrator.
8. The High Court vide Judgment and Order dated 19.12.2023 dismissed the Arbitration Case No. 23 of 2022 holding that as per Schedule 26 (Periods of Limitation) and as per Section 2(j) & 3
The court affirmed that an arbitration application under Section 11(6) was timely due to the COVID-19 limitation extension and upheld the validity of the arbitration mechanism despite amendments rend....
The arbitration application under Section 11(6) was not barred by limitation as it was filed within three years from the date of notice invoking arbitration, factoring delays linked to the Covid-19 e....
The right to appoint an arbitrator is not forfeited by serving notice for appointment; jurisdictional interventions can temporarily affect appointment rights, and the court's role is to ensure compli....
(1) Limitation Act, 1963 would apply to arbitrations as it applies to proceedings in court.(2) Appointment of Arbitrator – Limitation period for making an application seeking appointment of Arbitrato....
Point of Law : S.13(2) provides that a party who intends to challenge appointment of an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or afte....
The main legal point established in the judgment is that the limitation for filing an application under Section 11 of the Arbitration Act arises upon the failure to make the appointment of the arbitr....
Arbitration requests must be filed within three years of the cause of action; failure to act in time bars subsequent petitions.
The court clarified that post-2015 amendments, its role under Section 11 is limited to verifying the existence of an arbitration agreement, with other issues, including limitation, to be resolved by ....
Strict enforcement of arbitration agreement and the law does not permit either party to act as an arbitrator or appoint the arbitrator to arbitrate on the disputes.
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