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.

JUDGMENT

Ms. Lapita Banerji, J.

The challenge in the present appeal is a common judgment and order dated December 03, 2022 passed by Additional District Judge, Chandigarh whereby two applications under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act"), were dismissed.

2. Two arbitration petitions being Arbitration Petition No.508 of 2016 and Arbitration Petition No.513 of 2016 were preferred by the parties against the arbitral award dated July 3, 2016. The first petition was by the claimants/Shoppers Stop Limited and the second one was by the present appellant/M/s Silicon Constructions Private Limited, the counter claimant with which are concerned. Vide Award dated July 16, 2016, the learned sole arbitrator was of the view that the period of limitation from the date of accrual of the cause of action expired on September 15, 2012 i.e three years after the request for commencement of arbitral proceeding was made. Referring to Sections 3 and 21 of the 1996 Act and Article 22 of the Schedule-II of the Limitation Act, the learned arbitrator came to the finding that the claims of the claimants in the arbitration proceedings/respondents in the present appeal were barred by the laws on limitation. He also came to the finding that counter claims of the appellant herein were also time barred as they were not lodged before the learned arbitrator within 3 years from the date of accrual. As the date of accrual of cause of action was not specifically stated in the counter claim, the learned arbitrator held that for the purpose of calculation of limitation period, the date of May 14, 2009 could be taken as a reference point as the first letter qua the dispute and curing of the defects was given on that day by the claimant. Receipt of the said letter was undisputed and the same was deemed to be received by the appellant on May 15, 2009. Since the period for curing the defects was ninety days extendable by another 30 days, the learned Arbitrator was of the view that limitation would start to either from May 15, 2009 or at best from September 15, 2009.

3. Brief facts of the case are that the parties entered into an agreement vide Letter of Intent ("hereinafter referred to as "LOI") dated May 18, 2006. Pursuant to the same, the appellant/counter claimant was to construct a retail store and lease out the same to the claimants. On execution of LOI, the claimant paid a sum of Rs. 10 lakhs to the appellant and it was agreed between the parties that a lease deed would be executed. The agreement to lease was executed on August 27, 2007 between the parties whereby the appellant was to grant lease of the premises measuring approximately 2,25,000 square feet carpet area to the claimants. The disputes in the arbitration proceedings relate to and arise out of the said lease agreement. The tenure of the lease agreement was of 24 years commencing from date of expiry of fit-outs period. The claimant made a security deposit of Rs. 86,48,756/- on August 22, 2007. It was clearly stipulated in the said agreement that the lessor shall hand over the possession of the leased premises to the lessee/claimant for carrying out fit-out work latest by January, 2010. Clause 6.01 of the agreement reads as under:

"6.01 Subject to Force Majeure, the Lessor shall hand over possession of the said premises to the Lessee for carrying out its fit-out works latest by January 2010, (time being of the essence) after duly completing the items of work set out "Annexure IV" hereto. The Lessor will give the Lessee 60 days prior notice, in writing, of its intention to hand over possession of the said premises to the Lessee for fit-out works;"

4. The contention of the claimant was that the respondent did not commence construction on the plot at all. Accordingly, on May 14, 2009, the claimant served upon the respondent a Cure Notice calling upon the respondent to cure the defects as per Clause 18.01 of the lease agreement. Clause 18.01 of the