BHARAT SANCHAR NIGAM LTD. & ANR. versus M/S NORTEL NETWORKS INDIA PVT. LTD.

Citation: [2021] 2 S.C.R. 644 · Decided: 10-03-2021 · Supreme Court of India · Bench: INDU MALHOTRA · Disposal: Appeal(s) allowed

Cited by 10 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
644
SUPREME COURT REPORTS
[2021] 2 S.C.R.
BHARAT SANCHAR NIGAM LTD. & ANR.
v.
M/S NORTEL NETWORKS INDIA PVT. LTD.
(Civil Appeal Nos. 843-844 of 2021)
MARCH 10, 2021
[INDU MALHOTRA AND AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act, 1996 – s.11 – Application
under – Period of limitation – Tender issued by appellant –
Respondent awarded the purchase order – On completion of the
works, appellant withheld certain amount towards liquidated
damages/other levies – Respondent raised claim for payment of the
same in May 2014 – Rejected by appellant in August 2014 – In
2020, respondent invoked the arbitration clause for appointment
of arbitrator – Rejected by appellant – Respondent filed application
u/s.11 – High Court referred the disputes to arbitration – Review
petition – Dismissed – On appeal, held: Period of limitation for
filing an application u/s.11 would be governed by Article 137 of
the First Schedule, 1963 Act – It will begin to run from the date
when there is failure to appoint the arbitrator – In exceptional cases,
where claims are ex facie time- barred, the Court may refuse to make
reference – In the present case, cause of action arose on 04.08.14,
when the claims made by respondent were rejected by appellant –
Notice of arbitration invoked on 29.04.20 was rejected by appellant
on 09.06.20 – Thus, application u/s.11 filed before High Court on
24.07.20 was within limitation period prescribed u/Article 137 i.e.
within 3 years of rejection of the request for appointment of the
arbitrator – However, claims are ex-facie time barred by over 5½
years – Disputes between the parties cannot be referred to arbitration
– Impugned orders set aside – Application filed by respondent u/
s.11, dismissed – Limitation Act, 1963 – First Schedule- Article 137
– Arbitration and Conciliation (Amendment) Act, 2015 – ss.11(13),
29A, 34(6) – Arbitration and Conciliation (Amendment) Act, 2019
– s.11(6A), (8) – Commercial Courts Act, 2015 – s.13, 14 – Maxims.
Arbitration and Conciliation Act, 1996 – Scheme & object of
the Act – ss.8, 9(2), 11, 13, 116(2), 34(3) – Amendment to s.11 –
Held: Parliament may consider amending s.11 to provide a period
[2021] 2 S.C.R. 644
644
A
B
C
D
E
F
G
H
645
of limitation for filing an application under this provision in
consonance with the object of expeditious disposal of arbitration
proceedings.
Arbitration and Conciliation Act, 1996 – s.11 – Jurisdiction
under – Scope of – Pre & post amendment position – Discussed.
Arbitration and Conciliation Act, 1996 – Limitation –
Jurisdictional issue or admissibility issue – Discussed.
Allowing the appeals, the Court
HELD: 1.1 Period of limitation for filing an application under
Section 11 of the Arbitration and Conciliation Act, 1996.
The Arbitration and Conciliation Act, 1996 has been framed
for expeditious resolution of disputes, and various provisions have
been incorporated in the Act to ensure that the arbitral
proceedings are conducted in a time-bound manner. Various time
lines have been provided in the 1996 Act. The 1996 Act was
amended by the Arbitration and Conciliation (Amendment) Act,
2015 to incorporate further provisions for expeditious disposal
of arbitral proceedings. Section 11 does not prescribe any time
period for filing an application under sub-section (6) for
appointment of an arbitrator. Since there is no provision in the
1996 Act specifying the period of limitation for filing an application
under Section 11, one would have to take recourse to the
Limitation Act, 1963, as per Section 43 of the Arbitration Act,
which provides that the Limitation Act shall apply to arbitrations,
as it applies to proceedings in Court. Since none of the Articles
in the Schedule to the Limitation Act, 1963 provide a time period
for filing an application for appointment of an arbitrator under
Section 11, it would be covered by the residual provision Article
137 of the Limitation Act, 1963. The limitation for filing an
application under Section 11 would arise upon the failure to make
the appointment of the arbitrator within a period of 30 days’ from
issuance of the notice invoking arbitration. In other words, an
application under Section 11 can be filed only after a notice of
arbitration in respect of the particular claim(s) / dispute(s) to be
referred to arbitration [as contemplated by Section 21 of the Act]
BHARAT SANCHAR NIGAM LTD. v. M/S NORTEL NETWORKS
INDIA PVT. LTD.
A
B
C
D
E
F
G
H
646
SUPREME COURT REPORTS
[2021] 2 S.C.R.
is made, and there is

Excerpt shown. Read the full judgment & AI analysis in Lexace.