Allowed

U.V. Uttamchandni v. Gleg Engineers Pvt. Ltd. and 4 Ors.

Bombay HC9 Apr 2013ARBAP/34/2009

Case brief

AI extract

What is this about?

In an arbitration application under Section 11 of the Arbitration and Conciliation Act, 1996, the court rejected arguments that the application was time-barred, holding that Section 11 proceedings are not subject to the Limitation Act. The court found no extension of limitations by an alleged MOU. The application allowed appointing a sole arbitrator.

What did the court decide?

Appointment of Shri N.N. Shrikhande as sole arbitrator; application disposed of.

U.V. Uttamchandni Vs Gleg Engineers Pvt. Ltd. and 4 Ors. — Arbitration | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDCITION

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ARBITRATION APPLICATION NO. 34 OF 2009

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Shri U.V. Uttamchandani, Proprietor, Udhaygiri Engineers, Age 71 years, Occupation : Busienss, residing at BD/5E, Munira, New Delhi 110 067

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… Applicant Versus

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M/s. Gleb Engineers Pvt. Ltd. 303, Dheeraj Plaza,Hill Road, Bandra (W), Mumbai 400 050

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The Managing Director,

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M/s. GLEG Engineers Pvt. Ltd. Address as of Respondent no. 1.

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Shri Dheeraj Nihalaney,

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Director,

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M/s. Gleg Engineers Pvt. Ltd. Address as of Respondent No. 1.

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Shri. Akshay Nihalaney, Director, M/s. GLEG Engineers Pvt. Ltd. Address as of Respondent no. 1.

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Shri. Brij Nihalaney, Director, M/s. GLEG Engineers Pvt. Ltd. Address as of respondent no. 1. … Respondents

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Mr. C.S. Joshi for the applicant.

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Mr. D. Dhankar i/by Mr. Sudheer Phadke for respondent no. 1.

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CORAM : R.D. DHANUKA,J. DATED : APRIL 09, 2013

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ORAL JUDGMENT :

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The learned counsel for respondent tenders affidavit in reply which is

taken on record.

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By this application filed under section 11(6) of the Arbitration & Conciliation Act, 1996 the applicant seeks appointment of arbitrator in terms of clause 8 of the agreement dated 15^th October, 1997 entered into between the applicants and respondents. The dispute arose between the parties. By letter dated 14^th October, 2002 the applicants raised the demand upon the respondents. The respondents refuted the said claim. The applicants vide notice dated 7^th December, 2002, to the respondents invoked arbitration agreement recorded in clause 8 of the agreement and suggested that the arbitrator may be appointed from the panel of Indian Council of Arbitration within 30 days. By another letter dated 12^th April, 2006 to the respondents, the applicant requested that the matter be referred to arbitration and the person having technical background and experience in design and construction may be appointed as arbitrator. In response to the said notice the respondents vide their advocates letter informed the applicants that the respondents were agreeable to resolve all the disputes between the applicants and respondents by referring all the disputes between them to the arbitrator with technical background and having experience in design and constructions. The respondents agreed that the arbitrator be appointed from the Indian Council of Arbitration, Federation House, Tansen Marg, New Delhi 110 001. The respondents requested the applicants to suggest five names who are on the panel of the Indian Council of Arbitration Federation to enable the respondents to nominate to whom the arbitration can be referred to. In response to the said letter, the applicants by letter dated 18^th August, 2006 suggested five names and requested the respondents to agree to one of the name. As the

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respondent did not give any response to the said letter the present application is filed under section 11(6) of the Act. The learned counsel for the respondents submits that though the notice of demand was raised as far back as on 14^th October, 2002, present application is filed on 2^nd March, 2009 and thus the application under section 11 not having been filed within three years from the date of cause of action, the claims as well as application filed under section 11 are time barred. The learned counsel placed reliance upon the judgment delivered by the designate Judge of the Supreme Court in the case of Speech and Software Technologies (India) Pvt. Ltd. Vs. Neos Interactive Limited, (2009) 1 SCC 475 and more particularly paragraph 11 thereof which reads thus :

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“11. By now it is well settled that exercise of power under Section 11(6) of the Act is judicial power. After the decision of this Court in SBP and Company v. Patel Engineering Ltd. MANU/SC/1787/2005 : AIR2006SC450 , the Designated Judge has to consider the claim of both the parties to the matter and pass a reasoned order. It is also well settled that existence of arbitration agreement is a condition precedent before exercise of powers under Section 11(6) of the Act. The preliminary matters to be considered by the court are (1) existence of arbitration agreement, (2) territorial jurisdiction, (3) whether there are live issues to be referred to the arbitrator, and (4) whether application is filed within the period of limitation prescribed by the law. If the court finds that the arbitration agreement does not exist or is rescinded then the prayer for referring the dispute to the arbitrator will have to be rejected.”

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The next submission of the learned counsel for the respondent is that

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both the parties had entered into MOU in the meeting held on 14^th July, 2003 by which the applicants had confirmed that all the claims submitted by the applicants were withdrawn and in future also no such claim of any sort would

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be made by the applicants against the respondents.

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Relying upon the said MOU it is submitted that there is total accord and satisfaction of the claims made by the applicants and thus there are no live claims which can be referred to arbitration. The learned counsel for the applicants disputes the execution of any such MOU dated 14^th July, 2003 relied upon by the respondents.

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As far as issue of limitation raised by the learned counsel for the respondent is concerned, perusal of record indicates that the demand was raised by the applicants on 14^th October, 2002 which demand was not met with by the respondents, the applicants had invoked arbitration agreement by notice dated 7^th December, 2002 which is admittedly within three years from the date of accrual of cause of action in favour of the applicants. On reading of section 21 of the Arbitration & Conciliation Act, 1996 it is clear that the arbitration proceedings commences on the date when notice for appointment of arbitrator is received by the respondent. It is not in dispute that the respondents received the notice dated 7^th December, 2012 in the month of December, 2002 itself. In my view, when the notice invoking arbitration agreement is received by the respondents, the arbitration proceedings commences and limitation stops. There is thus no substance in the submission made by the learned counsel for the respondents that merely because the application under section11 is filed in the year 2009, the claims are barred by law of limitation.

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As far as as the issue of limitation raised by the learned counsel

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regarding application filed under section 11 is concerned, the Constitution Bench of the Supreme Court in the case of SBP Vs. Patel Engg. 2005 (8) SCC 618 has held that the proceedings under section 11 of the Arbitration & Conciliation Act, 1996 is not before the court. In my view as the application under section 11 is not before the court, the provisions of the Limitation Act, 1963 are not applicable to such application filed under section 11. In my view, thus there is no substance in the submission of learned counsel for the respondent that application under section 11 having been filed in the year 2009 is barred by law of limitation.

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In so far as reliance placed on the MOU dated 14^th July, 2003 by the learned counsel for the respondent is concerned, the execution of the said MOU is seriously disputed by the learned counsel for the applicants. Be that as it may, perusal of the letter dated 12^th July, 2006 addressed by the respondents through their advocates to the applicants indicates that though there was reference to the said alleged MOU dated 14^th July, 2003, in the said letter, the respondents unconditionally agreed to resolve all the disputes between the parties by referring the said disputes to arbitration. The respondent had agreed that the arbitrator be appointed from the Indian Council of Arbitration, Federation House, Tansen Road, New Delhi. By the said letter, the respondents had requested the applicants to suggest five names which were suggested by the applicants vide letter dated 18^th August 2006. Perusal of the said letter clearly indicates that even otherwise, the parties have recorded arbitration agreement in terms of section 7(4)(a) of the Arbitration & Conciliation Act,1996.

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Considering the nature of dispute between the parties, Shri. N.N.

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Shrikhande is appointed as sole arbitrator. Application is disposed of. There shall be no order as to costs.

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(R.D. DHANUKA.J.)

U.V. Uttamchandni v. Gleg Engineers Pvt. Ltd. and 4 Ors.

Case brief

What is this about?

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U.V. Uttamchandni v. Gleg Engineers Pvt. Ltd. and 4 Ors.

Case brief

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