The Issue Of Limitation Is Also Part And Parcel Of The Arbitrable Point: Karnataka High Court

The Court relied upon the judgment of the Apex Court in BSNL v. Nortel Neworks, LL 2021 SC 153 wherein the Apex Court held that issue of limitation is a mixed question of law and fact which should be decided by the arbitral tribunal. Further, the Court had held that the Court exercising power under Section 11 of the A&C Act can refuse arbitration only when the claims are ex-facie barred by limitation.

Facts

The parties entered into an agreement dated 22.08.2011 for construction of a building at Kalaburagi. It provided for resolution of disputes through arbitration. There was a delay in the completion of the project work and the certain additional work was also executed.

The petitioner submitted its final bill on 28.09.2015. A dispute arose between the parties with respect to the dues owed to the petitioner. Resultantly, the petitioner issued a legal notice dated 16.05.2020. The parties failed to mutually appoint an arbitrator, hence, the petitioner approached the High Court under Section 11(6) of the A&C Act.

Submissions of the Parties

The respondent objected to the appointment of the arbitrator on the following grounds:

• The claims of the petitioner are time barred and cannot be referred to arbitration.
• These claims are already considered and rejected by the respondent.

Analysis by the Court

The Court observed that the respondents have not denied the existence of the arbitration agreement but have challenged the reference to arbitration on grounds of limitation of the claims.

The Court held that that the issue of limitation of claims is a part and parcel of the arbitrable point which can be decided by the arbitrator.

The Court relied upon the judgment of the Apex Court in BSNL v. Nortel Neworks, LL 2021 SC 153 wherein the Apex Court held that issue of limitation is a mixed question of law and fact which should be decided by the arbitral tribunal. Further, the Court had held that the Court exercising power under Section 11 of the A&C Act can refuse arbitration only when the claims are ex-facie barred by limitation.

Accordingly, the Court allowed the petition and appointed the arbitrator.

Case Title: Shivaraj Kamshetty v. The Managing Director Karnataka State Agricultural Marketing Board, Civil Misc Petition No. 20003 of 2022

Citation: 2024 LiveLaw (Kar) 201

Date: 19.04.2024

Counsel for the Petitioner: SRI AMEET KUMAR DESHPANDE SENIOR COUNSEL APPEARED FOR SRI DESHPANDE G. V., ADVOCATE

Counsel for the Respondent: SRI GOURISH S. KHASHAMPUR, ADVOCATE FOR R1 TO R4; SRI KRUPA SAGAR PATIL, ADVOCATE FOR R3 AND R4

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