TMI Blog2018 (11) TMI 1867X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 11 (6) of the Arbitration Act. Since Article 137 of the Schedule to the Limitation Act, 1963 would apply to the arbitration application under Section 11(6) of the Arbitration Act, Section 5 of the Limitation Act, 1963 would also apply to the arbitration application filed under Section 11(6) of Arbitration Act. Delhi High Court in the case of Yogesh Kumar Gupta [ 2007 (2) TMI 714 - DELHI HIGH COURT ] has held that since the Limitation Act, 1963 specifically applies to the arbitrations, Section 5 of the Limitation Act would also apply to an application/petition under Section 11(5) of the Arbitration Act. Delhi High Court has also considered the provisions of Section 14(1) and 14(2) of the Limitation Act, 1963 and held that it would be open to the applicant to file a fresh application under Section 11(5) of the Arbitration Act. The principles of law laid down by the Delhi High Court in the case of Yogesh Kumar Gupta would apply to the facts of this case. The views expressed by the Delhi High Court in the said judgment, is to be agreed upon. The limitation prescribed under Article 137 of the Schedule to the Limitation Act, 1963 which applies to an application under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce there is no dispute about the existence of arbitration agreement and since the respondents did not appoint any arbitrator inspite of receipt of notices invoking arbitration agreement by the applicant, this commercial arbitration application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable - Mr. Snehal K. Shah, a counsel of this Court is proposed to be appointed as an arbitrator on behalf of the applicant. Application disposed off. - Commercial Arbitration Application No. 107 of 2018 and Notice of Motion No. 814 of 2018 in Commercial Arbitration Application No. 107 of 2018 - - - Dated:- 22-11-2018 - R.D. Dhanuka, J. For Appellant/Petitioner/Plaintiff: G.R. Joshi, Senior Advocate and Deepak Shukla i/by Vinod Mistry Co. For Respondents/Defendant: Anil Anturkar, Senior Advocate, Prathamesh Bhargude, Yatin Malvankar, Shubham Misar and Ranjit Shinde i/by Ajinkya Mohan Udane JUDGMENT By this application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the Arbitration Act ), the applicant seeks appointment of an arbitrator on behalf of the respondents (in addition to the arbitrator nom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 9 of the Arbitration Act for seeking various interim measures. 6. On 31st August 2013, the respondent no. 3 did not agree with the name of the arbitrator suggested by the applicant and suggested another name for appointment as an arbitrator. 7. On 16th September 2013, this Court dismissed the arbitration petition No. 741 of 2013 filed by the applicant under Section 9 of the Arbitration Act on the ground that the said agreement was unregistered and insufficiently stamped. The said order dated 16th September 2013 however was subsequently clarified by this Court by an order dated 25th September 2013 that this Court had only refused the ad-interim relief in favour of the petitioner therein and not dismissed the petition. This Court however, passed an order that since the said agreement was inadequately stamped and was not registered, the same was required to be impounded and to be sent for stamping and registration to the stamp office. This Court directed the Prothonotary and Senior Master of this Court to send the original Memorandum of Agreed Terms dated 7th December 2006 for stamping. It was however directed that the said agreement shall be kept in a sealed cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g arbitration clause and appointing a counsel of this Court as the arbitrator on behalf of the applicant and called upon the respondents to appoint their arbitrator or to concur on the appointment of the arbitrator suggested by the applicant within a period of 30 days from the receipt of the said letter. He also invited my attention to the letter dated 31st August 2013 from the respondent no. 3 through his advocates conveying that he did not agree with the name of the arbitrator suggested by the applicant and suggested the name of a retired Judge of the Hon'ble Supreme Court. 11. It is submitted by the learned senior counsel that the existence of the arbitration agreement is not in dispute. In so far as the issue of limitation raised by the respondents in filing this arbitration application under Section 11(6) of the Arbitration Act is concerned, it is submitted that a distinction has to be drawn between the period of limitation for filing an application seeking appointment of the arbitral tribunal vis-a-vis the period of limitation to file a claim. He submits that the Limitation Act does not apply to the application filed under Section 11(6) of the Arbitration Act. 12. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders Pvt. Ltd. vs. Green Blaze CHS Ltd. (Arbitration Application No. 199 of 2007 - Para 5) and Arjandas Techchand Kashyap Vs. Smt. Pooja Jaiprakash Pamnani Ors. (2014) 2 Bom CR 164 (Para 27). (iii) Yogesh Kumar Gupta (2007) 2 Arb. LR 446 @ 457. (iv) National Insurance Company Vs. Boghara Polyfab Pvt. Ltd., (2009) 1 SCC 267 (para 22) and Bharat Rasiklal Ashra Vs. Gautam Rasiklal Ashra Anr. (para 11). (v) M/s. Duro Felgeura, SA vs. M/s. Gangavaram Port Limited, 2017 (9) SCC 729. (vi) Hari Shankar Singhania Ors. Vs. Gaur Hari Singhania Ors., 2006 (2) Arb. LR 1. 16. In his alternate submission, it is submitted by the learned senior counsel that if this Court comes to the conclusion that even in this case, though the arbitral proceedings had already commenced prior to 23rd October 2015, the amended provisions of Section 11(6) would apply and this arbitration application is treated as an application before the Court under the amended Section 11(6) of the Arbitration Act, the provisions of Section 5 of the Limitation Act, 1963 would be attracted to the application filed under Section 11(6) of the Arbitration Act. 17. Learned senior counsel for the applicant invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus the applicant prays for condonation of delay of 536 days in filing the present commercial arbitration application. 20. In so far as the issue of limitation in making a claim of the applicant in the notice of demand is concerned, the learned senior counsel for the applicant submits that the said question of limitation raised by the respondents is a mixed question of law and fact and can be left open to the arbitral tribunal to decide. He submits that even otherwise the issue as to whether the claims are barred by law of limitation cannot be decided by this Court in view of the limited powers of this Court in view of Section 11(6-A) of the Arbitration Act. He strongly placed reliance on the judgment of the Hon'ble Supreme Court in the case of M/s. Duro Felgeura, SA (supra). It is submitted that the issue as to whether this application is barred by law of limitation or not has to be decided by the arbitral tribunal. 21. Mr. Zaveri, learned counsel for the respondent no. 3 opposes this arbitration application on the ground that the arbitration application is filed before the Commercial Division of this Court and is not maintainable. He submits that under Section 6 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 and thus Article 137 of the Schedule of the Limitation Act, 1963 would apply to this application. 24. It is submitted by the learned senior counsel that the arbitration application under Section 11(6) has been admittedly filed by the applicant on 9th February 2018. The respondents did not agree to the names suggested by the applicant. The arbitration application thus filed on 9th February 2018 by the applicant is ex facie barred by law of limitation in view of the said application not having been filed within three years from the date when the right to apply accrues under Article 137 of the Schedule to the Limitation Act, 1963. In support of his submission, learned senior counsel strongly placed reliance on the judgment of the Supreme Court in the case of Board of Control for Cricket in India Vs. Kochi Cricket Private Limited Ors., (2018) 6 SCC 287 and in particular paragraphs 36 to 39, 75, 76 and 79 thereof. Learned senior counsel also placed reliance on the judgment of the Supreme Court in the case of United India Insurance Co. Ltd. Vs. Hyundai Engineering and Construction Co. Ltd., 2018 SCC OnLine SC 1045 and in particular paragraphs 12 and 14 thereof. 25. It is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings under Section 11(6) of the Arbitration Act were not before the Court and thus the provisions of the Limitation Act were not applicable to such proceedings would not apply to the facts of this case in view of the fact that the expression Chief Justice or his designate has been substituted by the expression Court with effect from 23rd October 2015. It is submitted that admittedly these proceedings filed under Section 11(6) of the Arbitration Act are filed after 23rd October 2015 and are admittedly filed before this Court and not before the Hon'ble Chief Justice of this Court. 30. It is lastly submitted by the learned senior counsel that the issue of limitation in filing of this arbitration application under Section 11(6) cannot kept open to be decided by the arbitral tribunal inspite of limited powers conferred on the Court under Section 11(6-A) of the Arbitration and Conciliation (Amendment) Act, 2015. The issue of limitation in filing the arbitration application has to be decided only by this Court and not by the arbitral tribunal. 31. Mr. Joshi, learned senior counsel for the applicant in rejoinder in so far as the objection of dispute of this arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expression arbitral proceedings mentioned in Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 refers to the arbitral proceedings only before the arbitral tribunal and does not refer to two separate proceedings i.e. one before the arbitral tribunal and another before the Court. 34. Learned senior counsel distinguishes the judgment of the Hon'ble Supreme Court in the case of United India Insurance Co. Ltd. (supra) relied upon by the learned senior counsel for the respondent nos. 1, 2 and 4 and would submit that the arbitration clause dealt with by the Hon'ble Supreme Court in the said judgment is different than the arbitration clause which is the subject matter of this arbitration application. 35. It is submitted by the learned senior counsel that though the expression Chief Justice or his designate in Section 11(6) of the Arbitration Act prescribed prior to amendment of the said provision has been substituted by the expression Court by the Amendment Act, 2015 and though these proceedings can be considered as the proceedings filed before the Court, the Hon'ble Chief Justice has powers to delegate his powers to another Judge of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not in dispute that prior to 23rd October 2015, in the event of the parties failing to appoint an arbitrator within 30 days from the receipt of a request from the other party, the appointment was made, upon request of a party, by filing an application before the Chief Justice of the High Court or the Hon'ble Supreme Court or, as the case may be, the High Court or any person or institution designated by him. With effect from 23rd October 2015, in view of the amendment to Section 11(4)(b), 11(5) and 11(6) which are relevant for the purpose of deciding this application, the words the Chief Justice or any person or institution designated by him is substituted by the words the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court. As a result of the said amendment, the proceedings under Sections 11(6) and 11(9) are now required to be filed before the High Court or the Supreme Court respectively and not before the Chief Justice of that Court. 40. It is thus clear that with effect from 23rd October 2015, the Hon'ble Chief Justice of the High Court or the Hon'ble Chief Justice of India does not remain to be perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, Article 137 of the Schedule to the Limitation Act, 1963 was not applicable. In my view, those judgments thus would not apply to the facts of this case. Admittedly, this arbitration application has been filed by the applicant before this Court and not before the Hon'ble Chief Justice of the High Court. 44. Delhi High Court in the case of Yogesh Kumar Gupta (supra) has held that since the Limitation Act, 1963 specifically applies to the arbitrations, Section 5 of the Limitation Act would also apply to an application/petition under Section 11(5) of the Arbitration Act. Delhi High Court has also considered the provisions of Section 14(1) and 14(2) of the Limitation Act, 1963 and held that it would be open to the applicant to file a fresh application under Section 11(5) of the Arbitration Act. In my view, the principles of law laid down by the Delhi High Court in the case of Yogesh Kumar Gupta (supra) would apply to the facts of this case. I am in respectful agreement with the views expressed by the Delhi High Court in the said judgment. 45. The Hon'ble Supreme Court in the case of Hari Shankar Singhania Ors. (supra) while dealing with the proceedings arising out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such other party being an appointing authority. 48. In my view, the limitation prescribed under Article 137 of the Schedule to the Limitation Act, 1963 which applies to an application under Section 11(6) or Section 11(9) of the Arbitration Act filed before the High Court or before the Hon'ble Supreme Court cannot be mixed up with the period of limitation applicable to the claims prescribed in various other Articles of the Schedule to the Limitation Act, 1963. Both these periods of limitation i.e. one applicable to the claims being made and another being applicable to the application under Section 11(6) or Section 11(9) of the Arbitration Act to which Article 137 of the Schedule to the Limitation Act, 1963 applies, are two different periods of limitation and cannot be made applicable to each other. 49. A question then arises for consideration is whether the applicant has made out a sufficient cause for condonation of delay of 536 days in filing this arbitration application without prejudice to the rights and contention of the applicant that there was no delay in filing this application under Section 11(6) of the Arbitration Act. 50. It is not in dispute that the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said appeal filed by the applicant. The said order was received by the applicant in the last week of January, 2016. On 24th November 2015, the applicant took time in Arbitration Petition No. 741 of 2013 to pay the amount of stamp duty and penalty as determined by the Collector of Stamps. On 18th January 2017, the Arbitration Petition No. 741 of 2013 was dismissed on account of non-payment of stamp duty. The applicant preferred an appeal being Appeal (L) No. 262 of 2017 before the Division Bench of this Court impugning the said order dated 18th January 2017. On 15th December 2017, the Division Bench of this Court disposed of the said appeal filed by the applicant and permitted the applicant to deposit the stamp duty and penalty on the said agreement. 53. Pursuant to the said order dated 15th December 2017, on 21st December 2017, the applicant deposited the said sum of ₹ 70,00,000/- and ₹ 1,51,20,000/- and also further sum of ₹ 35,00,000/-. On 12th January 2018, the applicant also paid costs imposed by this Court. On 22nd January 2018, the Collector of Stamps returned the said original agreement duly stamped to the applicant. On 9th February 2018, the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment being insufficiently stamped and unregistered. The applicant thus could not rely upon the said agreement in view of the said agreement insufficiently stamped and unregistered even for the purpose of filing of the application under Section 11 of the Arbitration Act. In my view, the applicant was thus prosecuting the application under Section 9 relying upon the said agreement which is relied upon in this arbitration application for the purpose of appointment of an arbitrator in good faith and due diligence. The applicant is thus entitled to take the benefit of the principles of Section 14 of the Limitation Act, 1963 for the purpose of computing the limitation under Article 137 of the Schedule to the Limitation Act, 1963 in filing this arbitration application under Section 11(6) of the Arbitration Act. In my view, there is thus no delay in filing this arbitration application. This Court thus need not consider a separate relief in the notice of motion filed by the applicant. 58. The judgment of the Delhi High Court in the case of Yogesh Kumar Gupta (supra) on this issue would squarely apply to the facts of this case. I am in respectful agreement with the views expressed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf while considering such application under Section 11(6) of the Arbitration Act and such issue cannot be left open to be decided by the arbitral tribunal. 61. There is no dispute about the proposition of law laid down by the Hon'ble Supreme Court in the case of M/s. Duro Felgeura, SA (supra) relied upon by the learned senior counsel for the applicant. The said judgment however would not assist the case of the applicant. There was no issue before the Hon'ble Supreme Court in the said judgment whether the application under Section 11(6) of the Arbitration Act itself was barred by law of limitation and whether such issue of limitation in filing such application under Section 11(6) also could be kept open to be adjudicated upon by the arbitral tribunal. Similarly the judgment of the Hon'ble Supreme Court in the case of National Insurance Company (supra) and Bharat Rasiklal Ashra (supra) relied upon by Mr. Joshi, learned senior counsel for the applicant also would not apply to the facts of this case at all. There was no issue of limitation in filing the application under Section 11(6) of the Arbitration Act before the Hon'ble Supreme Court in the said judgments also. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent nos. 1, 2 and 4. The Hon'ble Supreme Court in the case of Board of Control for Cricket in India (supra) has also held that the arbitral proceedings under Section 11 (6) of the Arbitration Act would also fall under the expression arbitral proceedings. In my view, the judgment of the Hon'ble Supreme Court in the case of Board of Control for Cricket in India (supra) is not a precedent on the proposition that the expression arbitral proceedings prescribed in second part of Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 would include the arbitral proceedings filed under Section 11(6) of the Arbitration Act before this Court. 66. In so far as the submission of the learned senior counsel for the respondent no. 3 that this commercial arbitration application filed before the Commercial Court Division is not maintainable in view of the fact that the property in question was not used for commercial purpose is concerned, Mr. Joshi, learned senior counsel for the applicant invited my attention to various provisions of the said agreement and would submit that under the said agreement, the suit property was to be developed and was used for commercia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on into the arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996. 69. In my view, since there is no dispute about the existence of arbitration agreement and since the respondents did not appoint any arbitrator inspite of receipt of notices invoking arbitration agreement by the applicant, this commercial arbitration application filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable. 70. The applicant has already nominated Mr. Snehal K. Shah as its nominee arbitrator. The respondents however, has not nominated any arbitrator. 71. I therefore pass the following order: - (i) Mr. Snehal K. Shah, a counsel of this Court is proposed to be appointed as an arbitrator on behalf of the applicant. (ii) I propose to appoint Smt. Justice Vasanti A. Naik, a former Judge of this Court having her office address at 322, Varma Chambers, 11, Homji Street, Horniman Circle, Fort, Mumbai - 400 001 as nominee arbitrator on behalf of the respondents. (iii) The prospective arbitrators proposed in this order are requested to file a statement of disclosure in terms of Section 11(8) read with Section 12(1) of the Arbitratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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