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IN THE HIGH COURT OF DELHI
Anup Jairam Bhambhani, J.
Extramarks Education India Private Limited - Appellant
Versus
Ram School - Respondent
Arb.P. 91 of 2022
Decided On : 23-09-2022




Claims must be filed within the prescribed limitation period, and failure to do so renders them time-barred and non-arbitrable.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11 - Limitation Act, 1963 - Article 137 - Dispute arose from agreements for setting up Smart Learn Classes - Claim for payment of dues deemed time-barred as invocation notice was filed beyond the 3-year limitation period. (Paras 1, 18)

(B) Claims must be clearly set forth in invocation notice to be subject to arbitration; failure to adhere results in dismissal of the petition. (Paras 16, 20)

Facts of the case:
The petitioner sought arbitration due to disputes with the respondent over contracts related to the establishment of Smart Learn Classes, alleging outstanding payments since 2014-2016 but did not initiate the arbitration process until 2022.

Findings of Court:
The court found the petitioner's claim to be ex-facie time-barred and held that limitation cannot be extended even by agreement between parties.

Issues: Whether the claims were indeed time-barred and whether the invocation notice sufficed to refer the dispute to arbitration.

Ratio Decidendi: The court emphasized the strict 3-year limitation period for claims under Article 137 of the Limitation Act, and that merely expressing willingness to proceed to arbitration does not mitigate time limitations.

Result: Petition dismissed.

Table of Content
1. petitioner seeks arbitration for disputes. (Para 1 , 2 , 4 , 6)
2. court analyzes arbitration agreement and limitations. (Para 3 , 8 , 11 , 12 , 14 , 15 , 19)
3. respondents argue claims are time-barred. (Para 5 , 7 , 9)
4. doctrine of limitation restricts legal remedies. (Para 13 , 17)
5. petition dismissed for being time-barred. (Para 20 , 21 , 22)

JUDGMENT

Anup Jairam Bhambhani, J. (ORAL)

By way of the present petition under section 11 of the Arbitration & Conciliation Act 1996 (`A&C Act' for short), the petitioner seeks appointment of an arbitrator to adjudicate upon the disputes that are stated to have arisen with the respondent from Agreement dated 02.05.2014 (`Agreement' for short), which related to the sale, implementation and installation by the petitioner of certain hardware and multi-media system accessories along with software for the purpose of setting-up 24 Smart Learn Classes at several schools run by the respondents.

2. Notice on this petition was issued on 25.01.2022.

3. Mr. Zeeshan Hashmi, learned counsel for the petitioner has drawn the attention of this court to clause 11 of the Agreement which comprises the arbitration agreement between the parties; and contemplates reference of disputes between them to arbitration; with courts of law at New Delhi to have exclusive jurisdiction over disputes that so arise.

4. Although reply is stated to have been filed by the respondents, the same is not on record. A copy of the reply has been handed-up by learned counsel appearing for the respondents in court, which is taken on record.

5. Learned counsel for the respondents submits that their principal objection to the reference of disputes to arbitration is that the claims made by the petitioner, of which reference is sought, are ex-facie time-barred.

6. It is submitted on behalf of the respondents that the disputes between the parties have arisen from Agreements dated 02.05.2014, 31.03.2015, 30.05.2015 and 06.06.2016, all of which related to the setting-up of Smart Learn Classes at the respondents' schools, as referred to above.

7. All else apart, learned counsel appearing for the respondents points- out that, on their own admission, the petitioner invoked arbitration vide notice dated 28.07.2021 issued to the respondents, in which notice the petitioner itself set-out the following claims and also indicated the time when the said claims became due:

    "5. However, once Our Client had delivered the hardware and installed the SLC's you started delaying payment instalments. Further, You the Noticees again misrepresented and gave false assurances that the said delay (sic) Therefore, the outstanding amount pending to be recovered from you the Noticees by our Client is Rs. 29,28,100 (Rupees Twenty Nine Lakhs Twenty Eight Thousand One Hundred Only) Alongwith Interest @ 18% P.A. till the date of actual realisation/payment.

    "6. Our Client had sent Legal Notice dated 04.01.2017 and a reminder notice dated 24.03.2017 for the recovery of outstanding dues. Further, Our Client has sent an Intimation Notice dated 22.08.2017 before the initiation of the judicial proceedings to you the Noticee.

    "7. A dispute has arisen between you and Our Client, due to the fact that you the Noticee have completely failed to fulfil your obligations/liabilities with respect to the payment to be made to Our Client as per the terms and conditions of the Agreements. You have therefore, completely failed to perform your contractual obligations which have caused irreparable harm to Our Client's reputation and goodwill. You have further failed to clear the mounting outstanding debt of Rs. 29,28,100 (Rupees Twenty Nine Lakhs Eight Thousand One Hundred Only) alongwith interest @ 18% P.A. till the date of actual Realisation/Payment inspite of repeated reminders and various settlement talks."

(emphasis in original)

8. It is further submitted, that it is admittedly the petitioner's case, that by legal notice dated 04.01.2017, the petitioner

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