Limitation for arbitration requests


Dear Participants,

One agreement was entered into between X Department and Y Contractor.  The Agreement stipulates that the differences/disputes arising out of the Agreement would be settled by way of Arbitration.  The work was foreclosed by X Department during the year 2001.  However, only during the year 2010, Y Contractor requests for appointment of Arbitral Tribunal to settle the 'disputes'.  In my considered view, as per Limitation Act, the Y Contractor ought to have applied for/requested for appointment of Arbitral Tribunal within a period of three years from the date of foreclosure of the Agreement.  In the instant case, I am of the view that the request of the Y Contractor is hit by Limitation.  Am I correct?

 
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IP Lawyer & Trademark Attorney

Dear Mr.R.Venkataraman,

If my understanding is correct then your query relies on the followng grounds :

The arbitral tribunal can bar a dispute solely based on the ground that the limitation period for the same is over. Article 137 of Limitation Act applies and hence a suit has to be filed within three years from the date on which one party terminates the contract. The delay caused can be condoned under Sec. 5 of the Limitation Act, if the Court is satisfied that there exists sufficient cause for delay.

IF NO AGREEMENT EXISTS : The ordinary principles of CPC must be used and it should be assumed that the claim should be filed within a reasonable period of time.

IF NO ARBITRATION PERIOD IS MENTIONED : The Hon'ble Supreme Court held that when the specific legislation does not provide for a limitation period, the general law of limitation must be considered.

if the party sleeps on his rights, then he is not entitled to any benefit.


 
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