IMPORTANT POINT
The main legal point established in the judgment is that claims under an agreement are time-barred if not raised within the prescribed limitation period, and mere correspondence between the parties does not extend the period of limitation.

JUDGMENT

Anup Jairam Bhambhani J. - By way of the present petition filed under section 34 of the Arbitration & Conciliation Act 1996 (`A&C Act'), the petitioners impugn arbitral award dated 26.05.2023 rendered by the learned Sole Arbitrator in disputes that had arisen between the parties from Agreement dated 25.03.2004.

2. The court has heard Mr. Aldanish Rein, learned counsel appearing for the petitioners, at length on the point of issuance of notice. Mr. Rein has also filed a short synopsis summarising his submissions.

3. Mr. Rein submits that the learned Sole Arbitrator has dismissed the claims made by the petitioners only on the ground that the claims were barred by limitation, which is a perverse inference, since the petitioners' case before the learned Arbitrator was that the cause of action in favour of the petitioners was a continuing cause of action and therefore their claims could not have been held to be barred by limitation.

4. Briefly, the genesis of the disputes is a Technology Development and Demonstration Programme Agreement dated 25.03.2004 (`TDDP Agreement') signed between the petitioners and the respondent in connection with the Technology Promotion Development and Utilisation (`TPDU') Programme for purposes of "Technology Development and Demonstration of Continuous Hydrogenation System for Fatty Acids and Oleo Chemicals Plants", under which agreement petitioner No. 2 was to release in favour of the respondent partial financial support of Rs.70 lacs against a total project costs of Rs.145 lacs. Eventually, petitioner No. 2 released Rs.55 lacs to the respondent, since that amount was found sufficient to complete the project.

5. Further to the TDDP Agreement, another Agreement dated 12.05.2004 was also signed between the parties concerning the collection of royalty payable by the respondent to petitioner No. 1, under which the respondent was liable to pay an annual lump-sum royalty of 1.3 times the amount disbursed by petitioner No. 2, for a period of 05 years from the start of commercial sale of the product developed under the TDDP Agreement.

6. Furthermore, as per the TDDP Agreement, the respondent was to assign the technology that was to be developed under the project alongwith a licence to use the intellectual property and the know-how to petitioner No. 1 within 60 days from the occurrence of certain events, as detailed hereinafter.

7. The relevant portion of clause 11 of the TDDP Agreement, around which the dispute revolves, reads as follows:

"11. UTILIZATION OF TECHNOLOGY

a..........

b..........

c..........

d.........

e. MECPRO will assign the technology proposed to be developed under this project alongwith license to use the intellectual property owned by them and transfer the know-how document to NRDC within 60 days from the occurrence of any of the following:

(i) If MECPRO refuses to exercise its right, within one year of completion of the "Project", its option to commercialise technology,

(ii) If MECPRO fails to commercialise technology within four years of completion of the project,

(iii) If MECPRO fails to execute agreement referred to in clause 11(a) above,

f. NRDC will have an exclusive right to license the technology developed through the "Project" to third parties in case of occurrence of either of the events referred in clause 11(e) above. MECPRO will provide to NRDC full details of any Improvement(s) made on the "Product" and the process of manufacture and any additional information, which NRDC may require to license this technology to third parties, in the event of third party licensing under the circumstances given in clause 11(e) above. In such cases, MECPRO will also provide training to third party licensees on request from NRDC on mutually agreed terms. Revenues earned by NRDC through third party licensing under this clause will be shared between MECPRO and NRDC (on behalf of DSIR) in the ratio of actual financial contributions by DSIR and MECPRO towards the project as assessed at the end of the project.