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IN THE HIGH COURT OF DELHI
Prateek Jalan, J.
Bizibi Infotech Pvt. Ltd. - Appellant
Versus
HCL Infosystem Ltd. - Respondent
Arb.P. 675 of 2017
Decided On : 06-09-2022
The court ruled that claims were ex facie barred by limitation and failed to fall under the arbitration clause stipulated in the Consultancy Agreement.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11 - Appointment of arbitrator sought by Bizibi for dispute resolution under Consultancy Agreement - Court found claims by Bizibi time-barred by limitations and not within the scope of the arbitration clause - HCL did not respond to arbitration request - Petitioner’s claims are ex facie barred by limitation based on timing and the nature of claims, primarily referring to the High Seas Agreement which lacks an arbitration clause. (Paras 5, 12, 19)
(B) Limitations in arbitration - The court can decline to appoint an arbitrator where claims are ex facie time-barred unless there's a pleaded case showing otherwise. (Paras 10, 11)
Facts of the case:
Bizibi sought arbitration against HCL regarding consultancy services, alleging fraud and costs incurred - Dispute arose over consultancy terms and supplementary agreement claims.
Findings of Court:
The court determined Bizibi’s claims were significantly outside the limitation period and beyond the arbitration provision contained in the Consultancy Agreement.
Issues: Whether claims were time-barred and whether all claims fell under the arbitration clause.
Ratio Decidendi: The court ruled that without clear intervening circumstances indicating a valid extension of limitation, Bizibi's claims were time-barred; fraudulent allegations did not support referral.
Result: Petition dismissed.
| Table of Content |
|---|
| 1. factual background of arbitration claim (Para 1 , 2 , 3 , 4) |
| 2. arguments against arbitration by hcl (Para 5 , 7 , 8) |
| 3. court's analysis of claims and limitations (Para 6 , 9 , 10 , 11 , 12 , 13) |
| 4. determination of claims being time-barred (Para 14 , 17 , 18) |
| 5. conclusion on dismissal of petition (Para 20 , 21) |
JUDGMENT
Prateek Jalan, J.
1. The present petition under Section 11 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as "the Act"] has been filed by the petitioner [hereinafter referred to as "Bizibi"] seeking appointment of an arbitrator for adjudication of disputes between it and the respondent [hereinafter referred to as "HCL"], arising out of an agreement between them dated 19.12.2001, entitled "Call Centre Consultancy Agreement" [hereinafter referred to as "the Consultancy Agreement"].
2. The Consultancy Agreement contains an arbitration clause in Clause 16 thereof. Clause 16.1 provides for adjudication of disputes by two arbitrators, one each to be nominated by Bizibi and HCL, and an umpire, appointed by the arbitrators so nominated. It is provided that the place of arbitration shall be New Delhi.
3. It is averred in the petition that the parties first entered into a Memorandum of Understanding dated 07.11.2001, with regard to sale of a call center software license by HCL to Bizibi, pursuant to which the Consultancy Agreement was entered into for certain services to be provided by HCL to Bizibi in this regard. Bizibi, alongwith its rejoinder, has filed another agreement between the parties dated 22.05.2002, entitled "High Seas Sale Agreement" [hereinafter referred to as "the High Seas Agreement"]. However, it is clear from the petition that the appointment of the arbitrator is sought only under the Consultancy Agreement, and not under the High Seas Agreement.
4. Bizibi has averred that, under the Consultancy Agreement, it paid a sum of Rs.30,55,000/- to HCL. It refers to further correspondence between the parties, and alleges that the conduct of HCL was vitiated by fraud. Bizibi claims to have invoked the arbitration clause by a letter dated 09.05.2016, to which HCL replied on 08.06.2016. As HCL did not accede to Bizibi's request for constitution of the arbitral tribunal, it has filed this petition under Section 11 of the Act.
5. Although HCL has taken various grounds in the reply filed by it to resist the constitution of the arbitral tribunal, Mr. Harsh Kaushik, learned counsel for HCL, confined his arguments to two points:
a. That the claims raised by Bizibi are hopelessly barred by limitation, and the parties ought not to be referred to arbitration on this ground, and
b. That part of the claims raised by Bizibi are not under the Consultancy Agreement, but under the High Seas Agreement, which does not contain an arbitration clause at all.
6. With regard to the question as to the circumstances in which a petition under Section 11 of the Act may be rejected on the ground that the substantive claims sought to be agitated are barred by limitation, Mr. Kaushik relied upon the judgments of the Supreme Court in Bharat Sanchar Nigam Limited and Anr. vs. Nortel Networks India Private Limited, (2021) 5 SCC 738 and Geo Miller and Company Private Limited vs. Chairman, Rajasthan Vidyut Utpadan Nigam Limited, (2020) 14 SCC 643. Mr. Kaushik also relied upon the following four judgments of this Court in support of the aforesaid submissions:
a. M/s KSR Brothers through its Partner Jaswinder Singh vs. IGNOU, through its Vice Chancellor, Judgement in Arbitration petition 619/2021 dated 16.11.2021.
b. Glocaledge Consultants Private Limited vs. Rec Power Distribution Company Limited, Judgement in Arbitration petition 1045/2021 dated 21.02.2022.
c. GAIL (India) Limited vs. Kesar Alloys and Metals Private Limited, Judgement in Arbitration petition 325/2021 dated 25.03.2022 [Against this judgment, GAIL filed S.L.P.(C) 13087/2022 before the Supreme Court, which was dismissed on 05.08
