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2023 (5) TMI 853 - SC - Indian LawsAppointment of an arbitrator for the adjudication of disputes and claims - period of limitation - what is the breaking point for commencement of arbitration - Section 11(6) of the Arbitration and Conciliation Act, 1996 - alleged wrongful encashment of warranty bond by the respondent - whether time-barred claims or claims which are barred by limitation, can be said to be live claims, which can be referred to arbitration? HELD THAT:- The starting point of limitation under Article 137 according to third column of the Article is the date when ‘the right to apply arises’. This being a residuary Article to be adopted to different classes of applications, the expression ‘the right to apply’ is an expression of a broad common law principle and should be interpreted according to the circumstances of each case. ‘ In SBP. & CO. VERSUS PATEL ENGINEERING LTD. & ANR. [2005 (10) TMI 495 - SUPREME COURT], this Court held that dragging a party to an arbitration when there existed no arbitrable dispute, can certainly affect the right of that party, and, even on monetary terms, impose on him a serious liability for meeting the expenses of the arbitration. In Panchu Gopal Bose v. Board of Trustees for Port of Calcutta [1993 (4) TMI 302 - SUPREME COURT] this Court had held that the provisions of the Act 1963 would apply to arbitrations and notwithstanding any term in the contract to the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party, in respect of any such matter at the time when it should have accrued but for the contract. Cause of arbitration shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator - Defaulting party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred. It was further held that where the arbitration agreement does not really exist or ceased to exist or where the dispute applies outside the scope of arbitration agreement allowing the claim, after a considerable lapse of time, would be a harassment to the opposite party. It was accordingly held in that case that since the petitioner slept over his rights for more than 10 years, by his conduct he allowed the arbitration to be barred by limitation and the Court would be justified in relieving the party from arbitration agreement under Sections 5 and 12(2)(b) of the Act. The case on hand is clearly and undoubtedly, one of a hopelessly barred claim, as the petitioner by its conduct slept over its right for more than five years. Statutory arbitrations stand apart - Petition dismissed.
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