Claims in arbitration must be filed within the limitation period; time-barred claims render an arbitral award illegal and against public policy.

JUDGMENT :

1. The challenge in this application filed under Section 34 of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 [“the Act”], by the then State of Jammu and Kashmir and Ors. (now Union Territory) is thrown to an arbitral award dated 30th December, 2018, passed by sole arbitrator Mr. G.M. Dar, former District and Sessions Judge, in the arbitration matter titled “Kamal Krishan Chibber Vs. State of Jammu and Kashmir and Ors.” whereby the learned arbitrator has held the respondent-Contractor entitled to the following amounts: -

2. The respondent-Contractor has been held entitled to the aforesaid amount along with interest @6% per annum from the date of filing of the arbitration petition before the Hon’ble Chief Justice till the date of award and 18% per annum after one month of passing of the award till the final payment of the award amount. The petitioners herein are also obligated to pay an amount of Rs. 1.00 lacs as arbitrator’s fee, to be released along with the awarded amount.

FACTUAL MATRIX:

3. The dispute between the parties owes its origin to allotment of a contract by the petitioners to the respondent-Contractor vide allotment letter No. USHP-II/EC/27 dated 3rd June, 1988. The contract was for execution of balance work of Wangat Weir at USHP-II Kangan. According to the terms and conditions of the contract entered into between the parties, the initial period of completion was up to 30th November, 1989. Since the contractor failed to complete the work within the stipulated period, as such, the time to complete the work was extended up to 1992.

4. Having regard to the disturbed law and order conditions in the valley, the respondent-Contractor was granted enough time to complete work, but he failed to do so. Consequently, the petitioners terminated the contract on 5th May, 1998. At the time of termination of contract, the respondent-Contractor had completed the work only to the extent of Rs. 113 lacs up to 01.04.1994, as against the total cost of the allotted work of Rs. 199.06 lacs. The petitioners claim that they suffered huge loss because of delay caused in the execution of the allotted work and, therefore, the petitioners were left with no option but to terminate the contract, which was done on 5th May, 1998.

5. The respondent-Contractor claimably approached the petitioners by way of several representations made from time to time, for release of amount payable to the respondent-Contractor for the work it had executed till the termination of the contract. The earliest communication which is relied upon by the respondent-Contractor is dated 21st November, 2000, whereby the Executive Engineer, Wangat Link Division, USHP-II Kangan, was requested to pay the legitimate dues of the respondent-Contractor. The Executive Engineer was also informed that if dues are not paid, he would be left with no other alternative but to report the matter to Central Bureau of Investigation (CBI). This communication is followed by other communications made by the respondent-Contractor on 30th December, 2000, 22nd May, 2001, 11th April, 2001, 25th July, 2003, 31st July, 2004, 3rd September, 2005 and 26th February, 2011 wherein the respondent-contractor quantified the total amount due to him at Rs. 63.40 lacs and requested for its release.

6. It seems that when the dispute between the parties remained unresolved, the respondent-Contractor approached this Court in the year 2013 for appointment of an arbitrator and reference of the arbitrable dispute. It is claimed by the respondent-Contractor that he nominated Mr. Nazir Ahmad Mir, retired Chief Engineer as arbitrator, but the petitioners failed to act in the matter. Be that as it may, on the intervention of this Court Mr. G.M. Dar, retired District and