Back
IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Alstom Systems India Pvt. Ltd. - Appellant
Versus
Zillion Infraprojects Pvt. Ltd. - Respondent
O.M.P. (COMM) 351 of 2021, I.A. 15661 of 2021 (Section 36 for Stay), I.A. 15662 of 2021 (Section 151 CPC for exemption), I.A. 15663 of 2021 (Section 151 CPC for exemption), I.A. 15664 of 2021 (Section 151 CPC for exemption), I.A. 15665 of 2021 (Section 15
Decided On : 31-01-2022
| Table of Content |
|---|
| 1. establishment of limitation period for arbitration claims. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. court's analysis of limitation based on mediation failure. (Para 7) |
| 3. petitioner's contention regarding arbitration timeline. (Para 8 , 9 , 10 , 11 , 12) |
| 4. interpretation of legal precedent impacting limitation. (Para 14 , 16 , 17 , 18 , 19 , 20) |
| 5. citing jurisdiction limits concerning arbitration disputes. (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 6. implications of delay in initiating arbitration. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33) |
| 7. deciding factors for not interfering in arbitration award. (Para 34 , 35 , 36 , 37 , 38) |
| 8. final decision to dismiss petition without intervention. (Para 39 , 40 , 41) |
JUDGMENT
(By video conference on account of COVID-19)
OMP (COMM) 351/2021
1. The petitioner assails, by means of this petition, preferred under Section 34 of the Arbitration and Conciliation Act, 1996 ("1996 Act"), order dated 29th October 2021, passed by a learned three member Arbitral Tribunal, presently in seisin of the dispute between the petitioner and the respondent.
The impugned order
2. The impugned order came to be passed on an application by the petitioner, as the respondent before the learned Arbitral Tribunal, under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), seeking dismissal of the respondent's case as being barred by time. To support this request, the petitioner furnished, to the learned Arbitral Tribunal the following tabular statement of dates, reproduced verbatim from para 2 of the impugned order:
| 24.09.2015 | Claimant and Respondent entered into a sub-contract. |
| 16.09.2016 | The Respondent terminated the sub-contract. |
| 21.09.2016 | Termination letter was delivered to the Claimant. |
| 21.09.2016 | The Claimant raised a dispute stating that termination is illegal. |
| 07.10.2016 | Invocation of Bank Guarantees by the Respondent. |
| 07.02.2017 | Bank Guarantees encashed and money transferred to Respondent's Account. |
| 24.03.2021 | Date of commencement of arbitration under Article 4(2) of the ICC Rules 2017. |
3. Premised on the afore-extracted table, the petitioner contended that the cause of action, for the respondent to initiate the arbitral process, arose on 21st September, 2016. Reckoned from the said date, and applying Articles 551 and 582 of the Limitation Act, 1963, which envisaged a limitation period of three years from the date of arising of the cause of action, the petitioner contended that the claims were barred by time.
4. Responding to the above assertion of the petitioner, the respondent, as the claimant before the learned Arbitral Tribunal, relied on Clause 29 of the Subcontract Agreement between the petitioner and the respondent, which contemplated resolution of disputes by arbitration, and read thus:
"29 APPLICABLE LAW - SETTLEMENT OF DISPUTES
29.1 This Subcontract Agreement shall be governed by the laws of [India] with courts at [Delhi] having exclusive jurisdiction to adjudicate on all dispute/matters arising out of this Sub-Contract.
29.2 Reference to Mediation
29.2.1 In the event of any dispute or difference between the Contractor and the Subcontractor, whether arising during the execution or after the completion or abandonment of the Subcontract Works or after the determination of the employment of the Subcontractor under this Subcontract (whether by breach or in any other manner}, m regard to any matter or thing of whatsoever nature arising out of this Subcontract or in connection therewith, then either Party shall give to the other notice in writing of such dispute or difference and such dispute or difference shall be and is hereby referred to mediation. A Party who receives a notice for mediation from the other Party shall consent and participate in the mediation process and shall make all reasonable efforts to resolve the same through mediation in accordance with the mediation rules of the International Chamber of Commerce- Alternate Dispute Resolution- ICC ADR
29.2.2 Notwithstanding anything in this
Arbitration claims must be initiated only after requisite mediation processes have failed; the cause of action arises post mediation conclusion, impacting limitation periods.
Court determined claims are not time-barred and appointment of an arbitrator is valid despite the respondent's challenges regarding jurisdiction and limitations.
Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing arbitration.
(1) Appointment of Arbitrator – Limitation – There is a fine distinction between plea that claims raised are barred by limitation and plea that application for appointment of Arbitrator is barred by ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
