TMI Blog2013 (5) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... patently long time-barred, if the contractor makes it a decade or so after completion of the work without referring to any acknowledgment of a liability or other factors that kept the claim alive in law. On the other hand, if the contractor makes a claim, which is slightly beyond the period of three years of completing the work say within five years of completion, the Court will not enter into disputed questions of fact as to whether the claim was barred by limitation or not. In the present case, there is a dispute as to whether the repeated notices sent by the petitioner to the respondents were ever received. There are further disputes (even if the notices were received by ONGC) as to whether they were actually received in the correct section of ONGC. These are matters of evidence which are normally best left to be decided by the Arbitral Tribunal. Thus it would be appropriate for this Court to constitute the entire Arbitral Tribunal in exercise of my powers under Section 11(6) of the Arbitration and Conciliation Act, 1996. In exercise of the aforesaid powers, Justice V.N. Khare, Former Chief Justice of India as the Chairman and Justice D.P. Wadhwa and Justice S.N. Variava, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor and the Arbitrators so appointed shall appoint the third Arbitrator who will act as Presiding Arbitrator. The party desiring the settlement of dispute shall give notice of its intention to go for arbitration clearly stating all disputes to be decided by arbitral tribunal and appoint its own arbitrator and call upon the other party to appoint its own arbitrator within 30 days. In case a party fails to appoint an arbitrator within 30 days from the receipt of the request to do so by the other party or the two Arbitrators so appointed fail to agree on the appointment of third Arbitrator within 30 days from the date of their appointment, upon request of a party, the Chief Justice of India or any person or institution designated by him (in case of International Commercial Arbitration) shall appoint the Arbitrators/Presiding Arbitrator. In case of domestic Contracts, the Chief Justice of the High Court or any person or institution designated by him within whose jurisdiction the subject purchase order/CONTRACT has been placed/made, shall appoint the arbitrator/Presiding Arbitrator upon request of one of the parties. If any of the Arbitrators so appointed dies, resigns, incapacitate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et of Gyro Equipment Services (Gyro) collectively referred to as Equipments for carrying out its operation. Accordingly, the respondent issued a tender No.MR/DS/MAT/CT/MWD/ 142(390) 2003- 04/P46KC04002. The petitioner had the necessary experience of carrying out operation as stated in the tender and submitted a bid on 8th June, 2004 under offer No.SASL/D M/ONGC 4002/2002-02 for providing the required services against the respondent s tender in accordance with the terms and conditions set-forth therein. The respondent accepted the bid of the petitioner and placed a firm order dated 6th August, 2004 under No.MR/DS/MAT/CT/MWD/142(390)2003-04/DY8DF0301/ 9010002261. Accordingly, on 7th December, 2004, the parties entered into and duly executed a contract effective from the date of issue of the firm order i.e. 6th August, 2004. The petitioner agreed to perform a work defined in Appendix-III of the Contract. The respondent in consideration thereto promised to pay the amounts set out in Appendix-IV of the Contract at the time and in the manner prescribed in the contract. The duration of the contract was initially for a period of 2 years from the date of receipt of Equipments at Nhava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent failed to discharge this obligation also. 10. Since no payment had been received, the petitioner sent a letter to the respondent on 11th July, 2008 demanding the payment of the outstanding amount. However, there was no response to the aforesaid communication. The petitioner, therefore, issued a legal notice dated 14th November, 2008 invoking arbitration under Clause 27 of the Contract. In the aforesaid notice, the petitioner detailed the disputes that have arisen between the parties. In the same notice, the petitioner informed the respondent that it has nominated the Arbitrator and called upon the respondent to nominate their Arbitrator within 30 days from the date of receipt of the notice, failing which the petitioner shall be constrained to initiate legal steps for appointment of Arbitrator on behalf of the respondent. According to the petitioner, the aforesaid notice was duly served upon the respondent but no steps were taken by them for appointment of Arbitrator. Thereafter, the petitioner sent a reminder letter on 21st May, 2009 calling upon the respondent to nominate an Arbitrator within 30 days from the date of receipt of the notice. The petitioner reiterated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for correspondence was given as ONGC Limited, Drilling Services, Mumbai Region, 3B, Vasundhara Bhavan, Bandra- East, Mumbai-51. This was changed to ONGC Limited, Drilling Services, Directional Drilling Section, Mumbai Region, 2nd Floor, 11-High, ONGC, Sion (W), Mumbai-400017 in October, 2005. This was known to the petitioner as it had submitted the invoices to ONGC at new address. However, notices dated 21st May, 2009 and 11th August, 2010 were still sent to the earlier address. In any event, notice dated 14th November, 2008 was never received by the respondent. Mr. Luthra submits that mere sending of subsequent show cause notice/letters would not extend the limitation as the date of cause of action was fixed on the expiry of 30 days from the first notice dated 14th November, 2008. Mr. Luthra points out that Section 43 of the Arbitration and Conciliation Act, 1996 provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceedings in Court. Relying on Section 43(2) read with Section 21 of the aforesaid Act, the learned counsel submitted that the arbitration shall be deemed to have commenced on the date on which a request for that dispute referred to arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limitation as it raises dead claims. It would not be necessary for this Court to leave the matter to be decided by the Arbitral Tribunal. 14. On the other hand, Mr. Sanjiv Puri, learned senior counsel appearing for the petitioner submits that the limitation stops running from the date mentioned in the notice invoking arbitration and in the present case, the notice invoking arbitration was sent on 14th November, 2008. Learned counsel also relied on Section 3 of the Arbitration and Conciliation Act, 1996 in support of the submission that the notice is deemed to have been received by respondent as it was delivered to the addresses mentioned in the contract. In any event, the learned counsel submitted that the petitioner had sent the final notice on 9th January, 2012 and the respondent had denied the claim through its letter dated 29th February, 2012. The disputes clearly arose only w.e.f. 29th February, 2012. Therefore, the preliminary objection raised by the respondent deserves to be rejected. 15. In any event, learned senior counsel submitted that this Court in the case of Indian Oil Corporation Ltd. Vs. SPS Engineering Ltd. (2011) 3 SCC 507 has considered and explained the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond three years of completing of the work but say within five years of completion of work, and alleges that the final bill was drawn up and payments were made within three years before the claim, the Court will not enter into a disputed question whether the claim was barred by limitation or not. The Court will leave the matter to the decision of the Tribunal. If the distinction between apparent and obvious dead claims, and claims involving disputed issues of limitation is not kept in view, the Chief Justice or his designate will end up deciding the question of limitation in all applications under Section 11 of the Act. These observations make it clear that it is optional for the Chief Justice or his designate to decide whether the claim is dead (long-barred). It is also made clear by this Court that the Chief Justice or his designate would do so only when the claim is evidently and patently a long time-barred claim. The claim could be said to be patently long time-barred, if the contractor makes it a decade or so after completion of the work without referring to any acknowledgment of a liability or other factors that kept the claim alive in law. On the other hand, if the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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