IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
M/s. Chennai Water Desalination Ltd., (CWDL) Rep. by its Manager, Chennai - Appellant
Versus
Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) Rep. by its Managing Director, Chennai - Respondent
O.P. No. 298 of 2019
Decided On : 26-07-2022
Arbitration and Conciliation Act - Limitation - Section 34(2)(b)(ii) - Sections 5 and 7.4 of BWPA - Summary
Fact of the Case:
The petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to partially set aside the arbitral award dated 09.10.2017, which rejected the counter claim of the petitioner. The main issue revolved around the limitation of the counter claim made by the petitioner.
Finding of the Court:
The court found that the counter claim of the petitioner was not time-barred and set aside the impugned award insofar as it rejected the counter claim of the petitioner. The court also upheld the rejection of the claim of the respondent on the ground of limitation.
Issues: The key issue was whether the counter claim of the petitioner was time-barred. The court also considered the rejection of the claim of the respondent on the ground of limitation.
Ratio Decidendi: The court applied the principles of limitation as per the Arbitration and Conciliation Act and relevant case laws to determine the timeliness of the counter claim. It also considered the concept of cause of action and cause of arbitration in arbitration matters.
Final Decision: The court partially set aside the arbitral award to the extent that it rejected the counter claim of the petitioner. The rejection of the claim of the respondent on the ground of limitation was upheld.
JUDGMENT
(Petitioner filed under Sections 34(2)(b)(ii) read with Explanations (ii) and (iii) of the Arbitration and Conciliation Act, 1996 (as amended) to partially set aside the award dated 09.10.2017 passed by the Arbitral Tribunal as far as it relates to the counter claim of the petitioner herein.
Captioned 'Original Petition' ['OP' for the sake of convenience and clarity] was presented in this Court on 08.01.2018 under Section 34 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)', which shall hereinafter be referred to as 'A and C Act' for the sake of brevity, assailing an arbitral award dated 09.10.2017 made by a three member Arbitral Tribunal.
2. This 09.10.2017 arbitral award being a unanimous award made by a three member 'Arbitral Tribunal' ['AT' for the sake of brevity] shall hereinafter be referred to as 'impugned award' for the sake of brevity, convenience and clarity.
3. There have been multiple listings of captioned main OP before this Court and proceedings made by me in the listing on 15.03.2021 captures the crux and gravamen of the captioned main OP. This 15.03.2021 proceedings reads as follows:
'Mr.R.Murari, learned senior advocate instructed by Ms.Hema Srinivasan, counsel on record for sole petitioner and Mr.S.R.Rajagopal, learned Additional Advocate General instructed by Mr.G.Janakiraman, Standing Counsel for Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) are before me.
2. The impugned award is dated 09.10.2017 and the same has been made by an 'Arbitral Tribunal' ('AT' for the sake of brevity) constituted by three Hon'ble Arbitrators. To be noted, it is an unanimous award.
3. The contractor, who was respondent before AT, is the petitioner in captioned OP and CMWSSB, the employer which was claimant before AT, is the respondent in captioned OP.
4. The fulcrum of the lis or in other words, the epicentre of the lis is an agreement dated 13.09.2005, which is described as 'Bulk Water Purchase Agreement' ('BWPA' for brevity).
5. The entire matter turns on limitation.
6. In a nutshell inter alia vide Paragraph 54 of the impugned award AT has held CMWSSB's claim to be time barred. The lis was therefore not examined on merits.
7. Likewise, vide Paragraphs 56 and 57, AT has held the counter claim of the contractor to be time barred. For convenience, it is recorded that in Paragraph 57 Hon'ble AT has extracted a paragraph from case law of Hon'ble Supreme Court and has mentioned that the same is an extract from Praveen Enterprises case law being law laid down by Hon'ble Supreme Court in State of Goa Vs. Praveen Enterprises reported in (2012) 12 SCC 581, but the extract is actually from Voltas Limited Vs. Rolta India Limited case law reported in (2014) 4 SCC 516. To be noted, what has been extracted in Paragraph 57 of the impugned a ward is not from P raveen Enterprises , but is part of paragraph 28 o f R olta Vs. Voltas.
8. There is no disputation or disagreement before this Court that CMWSSB, which was the claimant before AT, has not assailed the impugned award.
9. Likewise, case file placed before me reveals that captioned OP which is at the instance of the contractor, who was respondent before AT, is a limited challenge, limited to the AT dismissing the counter claim of the contractor as time barred. Learned senior counsel submits that this is based on J.G.Engineers principle, being principle laid down by Hon'ble Supreme Court in J.G.Engineers Private Limited Vs. Union of India and another reported in (2011) 5 SCC 758. Relevant paragraph in J.G.Engineers case law is paragraph 25.
10. In the aforesaid backdrop, learned senior counsel submitted that return of the bank guarantee is a sequittur to the claim of the employer CMWSSB being held to be time barred, but learned Additional Advocate General submits tha
The main legal point established in the judgment is the application of limitation principles under the Arbitration and Conciliation Act to determine the timeliness of the counter claim and the reject....
The limitation period for arbitration claims commences from the date of the Cure Notice, and claims not filed within three years are barred, affirming the arbitrator's findings.
A request for arbitration can be made informally, and claims for damages do not crystallize into debts until adjudicated, impacting the rights related to bank guarantees.
Article 113 of the Limitation Act reads as Any suit for which no period of limitation is provided elsewhere in the Schedule, the period of limitation is three years and the time begins to run when th....
The main legal point established in the judgment is that counter-claims must be filed within the stipulated time from the date on which the cause of action for the claims had arisen, and failure to d....
The Arbitral Tribunal retained jurisdiction despite the expiration of statutory deadlines, and the rejection of a belated counter-claim was justified under the Arbitration Act.
The court affirmed that claims for breach of contract are subject to statutory limitation periods, which cannot be extended by claims of continuing breaches.
The Arbitral Tribunal retains jurisdiction despite delays in issuing an award, provided the delay is not due to its own inaction, and counter-claims must be timely filed to be valid.
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