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23 July 2021, Friday

3 years ago

4. What is the limitation period to apply for an appointment under Section 11? (Delhi High Court)

23 July 2021| Golden Chariot Recreations Pvt. Ltd. v. Mukesh Panika & others | Arb. Pet. 593 of 2020 | Sanjeev Narula J | 2021 SCC OnLine Del

The Delhi High Court dismissed a petition under Section 11 ACA because it was filed beyond three years. The court said that the period of three years under Article 137 of the Limitation Act, 1963 started to run 30 days from the receipt by the respondent of the notice of arbitration.

A co-ordinate bench had already rejected a prior petition for appointment on the same ground. The second petition was based on the argument that there was a fresh cause of action because another notice of arbitration had been sent regarding the actual sale of a property as opposed to an attempt to sell earlier. Narula J noted that the distinction between the so-called causes of action was illusionary and superficial.

The reader would benefit by noting here the following points on the structure of Section 11 ACA:

  1. Parties are free to agree on a procedure for the appointment of arbitrators. [Section 11 (2) ACA]. So, this agreed procedure can set any time limit, less or more than 30 days.
  2. Where there is no agreed procedure, and the parties fail to agree within 30 days of receiving a request by the other party, an application can be made under Section 11 (6) ACA.
  3. However, if the agreed procedure fails, an application could be made to the court under Section 11 (6) ACA.
  4. The Supreme Court’s judgment in BSNL v. Nortel Networks, (2021) 5 SCC 738 lays down the law on the limitation governing Section 11 ACA. But for better clarity as to when time starts to run for the different sub-sections of Section 11 ACA, the judgment should be read with the SCC’s editorial note under paragraph A of their report.
Read the judgment here.

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Categories: Appointment of Arbitrators | Arbitrability | Cause of Action | Commencement of Arbitral Proceedings | Existence of Arbitration Agreement | Kompetenz Kompetenz | Limitation | Limitation Under Section 11 ACA | Nortel Networks | Section 11 ACA | Section 21 ACA | Vidya Drolia

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