Ruling in Barco Electronic Systems Pvt Ltd v Mrs Kiran Malik, Delhi High Court recently held that limitation for filing a petition under section 11 of the Arbitration and Conciliation Act, 1996, is to be counted from the date a party rejects a claim that is asserted by another party. Section 11 deals with the appointment of arbitrators.
The high court was ruling on a petition filed under section 11(6) of the Arbitration and Conciliation Act for the appointment of an arbitrator to adjudicate on a dispute arising out a lease deed between the parties. The respondent, Malik, had argued that the dispute was not arbitrable as the arbitration petition was filed after the expiry of the limitation period.
The court noted that in terms of section 43(1) of the Arbitration and Conciliation Act and relevant provisions of the Limitation Act, 1963, the arbitral proceedings would commence “on the date on which a request for that dispute to be referred to arbitration is received by the respondent”.
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Accordingly, the high court held that when Barco Electronic Systems had claimed refund of its security deposit on 3 February 2007, but only issued a notice for invoking arbitration on 17 April 2008, it was within limitation. Therefore, the application for the appointment of an arbitrator was maintainable.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
