Point of Law: Court should only look into existence of arbitration agreement before making reference, nothing more, nothing less.

ORDER :

1. This application under Section 10 and 11 of the Arbitration and Conciliation Act, 1996 (‘the Act’) has been filed by the applicant seeking reference of dispute between the parties to Arbitrator.

2. It is inter alia indicated that the applicant was issued a work order dated 1.1.1996 for manufacture and supply of 20 lakh first class bricks and an agreement No.7/1995-1996 was executed in this regard. As per the order and contract, the work was to commence from 16.1.1996 and was to be concluded in 12 months i.e. by 15.1.1997.

3. It is claimed that the applicant earnestly commenced implementation of the work order and supplied 20 lakh bricks by 31.10.1996, however, another order dated 31.10.1996 was issued to the applicant for supply of additional 20 lakh bricks and based on the said quantity, it was expected that the contract would be extended till 15.1.1998.

4. It is then indicated in the application that for various reasons on account of rains etc. instead of 40 lakh bricks, the applicant was required to manufacture 45.50 lakh bricks, however, the applicant was not made full and final payment by the respondents in terms of Clause-10(a) of the agreement. It is claimed that on account of delayed payment, the applicant is entitled for interest on the outstanding payment.

5. It is then indicated that in terms of Clause-19 of the agreement, any question, difference or objection in connection with the agreement was to be referred to a sole arbitrator to be appointed as per the procedure prescribed, based on which, the applicant issued a notice dated 5.3.2020, however, as the respondents have not followed the procedure prescribed under Clause-19, they have lost the right to appoint arbitrator and, therefore, a sole arbitrator be appointed.

6. A reply to the application has been filed by the respondents inter alia with the submissions that the petitioner did not complete the work in the stipulated time period i.e. 31.3.1997 and there was a delay of more than a year in execution of the work order and, therefore, the petitioner is not entitled to any relief.

7. Further submissions have been made that the applicant was lying in the state of slumber as the dispute pertains to the year 1998 and the present application has been filed in 2020 after issuing notice. The claim made is ex-facie barred by limitation even as per Article 137 of the Limitation Act, 1963 and, therefore, the application deserves dismissal.

8. No rejoinder to the reply has been filed.

9. Learned counsel for the applicant made submissions that the claim made by the applicant is genuine, wherein, the respondents have not made payment of huge outstanding amount to the applicant and not only this, even the final bill has not been prepared and, therefore, the plea raised pertaining to the claim being barred by limitation has no substance. It was emphasized that as the final bill has not been prepared so far, it cannot be said that the claim is barred by limitation so as to seek dismissal.

10. Further submissions have been made that it is well settled that the issue pertaining to the limitation has to be considered by the arbitrator and this Court while examining the matter under Section 11 of the Act, cannot determine the aspect of limitation.

11. Reference in this regard has been made to judgments in Duro Felguera. S.A. v. Gangavaram Port Limited: (2017) 9 SCC 729 and M/s. Jai Shiv Construction Company v. State of Rajasthan & Ors.: S.B. Arbitration Application No.19/2019, decided on 21.7.2022.

12. Learned counsel for the respondent made submissions that in case where the claim made is ex-facie time barred and it is manifest that there is no subsisting dispute, the Court can refuse to make the reference under Section 11 of the Act.

13. Reliance has been placed on judgment in Bharat Sanchar Nigam Limited & Anr. v. Nortel Networks India Private Limited: (2021) 5 SCC 738.

14. I have considered the submissions made by learned counsel for the parties and have perused the material ava