[Arbitration Act] Limitation For Filing S.11 Application To Be Calculated From Date Of S.21 Notice, Not From Date Of Dispute: Rajasthan HC

The bench of Justice Anoop Kumar Dhand was hearing a Section 11 application praying for the appointment of an arbitrator to adjudicate the dispute between the parties arising out of the agreement dated 29.02.2016.

It was the Petitioner's case that the Respondents had terminated the contract and forfeited the payable amount, which resulted in the dispute between the parties. A notice invoking arbitration (“NIA”) dated 03.08.2021, was issued to the Respondents. No response was given to the NIA. Therefore, the Petitioner had no recourse but to file the present Section 11 application.

It was the Respondent's case that the cause of action arose in October 2019, and the Section 11 application is barred by limitation. Furthermore, the NIAs were never served at the Respondents' office.

The bench observed that the only aspect in dispute is the maintainability of the Section 11 application and not the agreement dated 29.02.2016 or the fact that the agreement was terminated and the money was forfeited. Furthermore, on perusal of the records, the bench noted that the NIAs were, in fact, sent to the Respondents.

The bench further observed that the Supreme Court in M/s/ Arif Azim Co. Ltd. v. M/s Aptech Ltd. had held that the limitation period for a Section 11 application would start after the Section 21 notice has been served to the other party. Furthermore, the judgment titled M/S B & T AG v. Ministry of Defence, relied on by the Respondent, has been referred to in Arif Azim Co.

The bench following the ratio laid down in M/s/ Arif Azim Co. Ltd. v. M/s Aptech Ltd. held that the Section 11 application is within the period of limitation. The bench allowed the application and appointed Shri Mahaveer Prasad Sharma (Retd. District Judge) as the sole arbitrator to adjudicate the dispute.

Case Name: Sinsinwar Construction Company v. The Chief General Manager, BSNL

Case Number: S.B. Arbitration Application No.16/2024

Counsel for the Petitioners: Mr. Anshuman Saxena, Mr. Divyansh Saini, Advs.

Counsel for the Respondents: Mr. Jitendra Sharma, Adv.

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