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2023 Supreme(Del) 876

IN THE HIGH COURT OF DELHI AT NEW DELHI
Navin Chawla, J.
Ashok Kumar Bajoria – Appellant
Versus
Gail India Limited – Respondent
Arb.P. 309 of 2023 & I.A. 5347-48 of 2023
Decided On : 20-03-2023

Advocates appeared:
Ms.Nilanjana Adhya & Mr.Anshuman Chowdhury, Advocates, for the Petitioner.
Mr.Somiran Sharma & Mr.Dhruvajit Saikai, Advocates, for the Respondent.

The period of limitation for filing a petition seeking appointment of an Arbitrator is distinct from the period of limitation for the substantive claims made in the underlying commercial contract.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996 - Section 11 - Limitation Act, 1963 - Articles 137 - Summary of Acts and Sections: The court discussed the application of Section 11 of the Arbitration and Conciliation Act, 1996 and its relation to the Limitation Act, 1963. It highlighted the absence of a specific time period for filing an application under Section 11, leading to the application of the residual provision of Article 137 of the Limitation Act. The court emphasized that the period of limitation for filing a petition seeking appointment of an Arbitrator is distinct from the period of limitation for the substantive claims made in the underlying commercial contract. The judgment also referenced the Supreme Court's decisions in Bharat Sanchar Nigam Limited and Another v. Nortel Networks India Private Limited and Secunderabad Cantonment Board v. B. Ramachandraiah and Sons to support its findings.

Fact of the Case:

The petitioner filed a petition seeking appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, which was challenged by the respondent on the grounds of limitation. The petitioner argued that the present petition was within the period of limitation based on previous legal actions and the benefit of Section 14 of the Limitation Act.

Finding of the Court:

The court found that the present petition was barred by limitation as the failure to appoint an arbitrator occurred earlier than the filing date of the petition. It dismissed the petition and all pending applications.

Issues: The main issue was the determination of the period of limitation for filing a petition seeking appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Ratio Decidendi: The court held that the period of limitation for filing a petition seeking appointment of an Arbitrator is distinct from the period of limitation for the substantive claims made in the underlying commercial contract. It emphasized the application of the residual provision of Article 137 of the Limitation Act and the need to determine the right to apply accrues for filing such a petition.

Final Decision: The present petition seeking appointment of an Arbitrator was dismissed as it was found to be barred by limitation.

JUDGMENT

Navin Chawla, J. (Oral)--This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Letter of Acceptance dated 29.04.2011 for `laying and construction of KCJP-GVK-Vemagiri Pipeline, Terminals and Associated Facilities in KG Basin'.

2. The learned counsel for the respondent, who appears on advance notice, submits that the present petition is barred by limitation inasmuch as the notice invoking arbitration was issued by the petitioner on 23.09.2016, while the present petition has been filed on or about 16.03.2023.

3. Placing reliance on the judgments of the Supreme Court in Bharat Sanchar Nigam Limited and Another v. Nortel Networks India Private Limited, (2021) 5 SCC 738 and Secunderabad Cantonment Board v. B. Ramachandraiah and Sons, (2021) 5 SCC 705, the learned counsel for the respondent submits that for filing of the present petition the period of limitation has to be determined in terms of Article 137 of the Limitation Act, 1963 (in short, `Limitation Act'), that is, the period of limitation for filing of the present petition shall run from 30 days after the date of issue of notice under Section 21 of the Act, and is three years therefrom. He submits that in the present case, the respondent had refused appointment of an Arbitrator vide reply dated 26.10.2016. Therefore, the cause of action, if any, for filing of the present petition arose in favour of the petitioner on 26.10.2016, and the present petition filed in 2023 would be barred by limitation.

4. On the other hand, the learned counsel for the petitioner submits that the petitioner had filed a petition under Section 9 of the Act seeking interim protection against the Show Cause Notice dated 04.08.2016 issued by the respondent, being OMP (I) (COMM) 331/2016, titled Harisons Industries v. GAIL India Ltd.. The said petition was disposed of by this Court vide its order dated 30.11.2016, granting four weeks time to the petitioner to file its response to the Show Cause Notice and directing the respondent to pass a reasoned order thereon, after giving a hearing to the petitioner, within a period of four weeks thereafter. The respondent thereafter issued a notice dated 03.04.2017 placing the petitioner in the Holiday List barring him from participating in any bidding process of the respondent for a period of three years starting from 04.08.2016. The petitioner has challenged the said decision in form of an appeal to the respondent itself, however, the same has yet not been decided by the respondent.

5. She further submits that the petitioner thereafter, on 17.03.2020, filed a petition under Section 11 of the Act, being A.P. No.166 of 2020, before the High Court of Calcutta. The same was, however, withdrawn on 04.07.2022 as the said Court lacked territorial jurisdiction. The High Court observed that benefit of Section 14 of the Limitation Act shall be applicable to the petitioner in accordance with law. The petitioner has thereafter filed the present petition as this Court would have territorial jurisdiction to entertain the same. She submits that the petition before the Calcutta High Court was filed on 17.03.2020, that is within the period of limitation arising from the order dated 03.04.2017 issued by the respondent placing the petitioner on the Holiday List, and giving the benefit of Section 14 of the Limitation Act, therefore, the present petition would be within the period of limitation.

6. I have considered the submissions made by the learned counsels for the parties.

7. As held by the Supreme Court in Bharat Sanchar Nigam Limited and Another (supra), Section 11 of the Act does not prescribe any time period for filing an application under Sub-Section 6 for appointment of an Arbitrator. Since none of the Articles of the Schedule of the Limitation Act provides a time

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