Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | ARBIT.PETITON No.-000021-000021 – 2025 |
| Diary Number | 16856/2025 |
| Judge Name | HON’BLE MR. JUSTICE K. VINOD CHANDRAN |
| Bench | HON’BLE THE CHIEF JUSTICE; HON’BLE MR. JUSTICE K. VINOD CHANDRAN |
| Precedent Value | Binding authority on limitation in Section 11(5) petitions |
| Overrules / Affirms | Affirms that Limitation Act applies to arbitration appointment applications |
| Type of Law | Arbitration and Conciliation Act, 1996; Limitation Act, 1963 |
| Questions of Law | Whether an arbitration petition under Section 11(5) is barred by limitation when notice and request are filed after the prescribed period |
| Ratio Decidendi |
The Court held that Section 11(5) petitions for appointment of an arbitrator are subject to the Limitation Act. The period began from the date of the alleged cause of action or last payment. A notice issued on 09.12.2020, after the three-year limitation from 04.05.2016 (and even from 04.08.2017), was time-barred. Subsequent criminal proceedings and a High Court petition did not extend or reset the limitation period. Hence, the appointment petition was dismissed. |
| Logic / Jurisprudence / Authorities Relied Upon |
|
| Facts as Summarised by the Court |
A partnership dated 20.09.2014 led to payments totaling ₹2,31,85,600/–; land was purchased on 04.05.2016; notice for arbitration was issued on 09.12.2020; a related police complaint and magistrate’s order of June 2017 were rejected; a High Court petition filed on 22.06.2022 was disposed on 20.01.2025. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts and tribunals dealing with Section 11 petitions under the Arbitration Act |
What’s New / What Lawyers Should Note
- Clarifies that Section 11(5) appointment petitions are strictly subject to the Limitation Act.
- Establishes that the date of issuing the arbitration notice is the trigger for computing limitation.
- Confirms that parallel criminal proceedings or a High Court petition do not toll or reset the limitation period.
- Reinforces the need to file Section 11 applications promptly upon expiry of contractual obligations.
Summary of Legal Reasoning
- The Court computed limitation from the date of the alleged cause of action—purchase of land on 04.05.2016—and from the last admitted payment of 04.08.2017.
- The arbitration notice dated 09.12.2020 was beyond the three-year limitation period under the Limitation Act.
- Admission of criminal proceedings and rejection by the Magistrate, followed by a delayed Sessions Judge order with unexplained 234-day delay, did not toll limitation.
- A subsequent High Court petition (22.06.2022–20.01.2025) did not revive a time-barred claim.
- Consequently, the Section 11(5) petition was dismissed as barred by limitation.
Arguments by the Parties
Petitioner
- Relied on Clause 6 of the partnership deed for entitlement to 75% of profits.
- Sought appointment of an arbitrator under the arbitration clause.
- Admitted filing a police complaint (06.05.2017) and later a Section 200 CrPC application.
Respondent
- Contended all claims were barred by the three-year limitation period.
- Highlighted delay in issuing arbitration notice (09.12.2020) and filing Section 11 petition.
- Pointed out rejection of criminal complaint and subsequent High Court petition for want of explanation for delay.
Factual Background
A partnership deed dated 10.04.2008 was dissolved on 22.12.2008. A new partnership between the same parties was executed on 20.09.2014. The petitioner funded the venture with ₹2,31,85,600/– and land was acquired on 04.05.2016. An arbitration notice was issued on 09.12.2020. Prior to this, a police complaint (06.05.2017) and a Section 200 CrPC application were rejected, and a High Court petition filed on 22.06.2022 was disposed on 20.01.2025.
Statutory Analysis
- Section 11(5), Arbitration and Conciliation Act, 1996: procedure for appointment of an arbitrator where parties fail to concur.
- Limitation Act, 1963: three-year period for contractual disputes; limitation calculated from the date when the right to sue accrues (purchase date or last payment).
- The Court held that Section 11 applications cannot override the Limitation Act and that no equitable tolling applies.
Alert Indicators
- ✔ Precedent Followed – Existing law on limitation in arbitration petitions has been affirmed.