SCHLUMBERGER ASIA SERVICES LTD. versus OIL & NATURAL GAS CORPORATION LTD.

Citation: [2013] 5 S.C.R. 557 · Decided: 09-05-2013 · Supreme Court of India · Bench: S.S. NIJJAR · Disposal: Case Allowed

Judgment (excerpt)

[2013] 5 S.C.R. 557 
SCHLUMBERGER ASIA SERVICES LTD. 
v. 
OIL & NATURAL GAS CORPORATION LTD. 
ARBITRATION PETITION N0.6 OF 2013 
MAY 09, 2013 
[SURINDER SINGH NIJJAR, J.] 
A 
B 
Arbitration and Conciliation Act, 1996 - s. 11 (6) - Petition 
under - For appointment of nominee Arbitrator on behalf of 
respondent and also appointment of third Arbitrator (Presiding 
C 
Arbitrator) in Arbitral Tribunal to adjudicate disputes between 
the parties - Maintainability - Whether arbitration petition 
liable to be dismissed on ground of limitation as it raises 
dead claims or the matter ought to be left to be decided by 
the Arbitral Tribunal - Held: The Chief Justice or the 
D 
designated Judge can also decide whether the claim was 
dead one or a long-ba"ed claim - But it is not imperative for 
the Chief Justice or his designate to decide the questions at 
the threshold - It can be left to be decided by the Arbitral 
Tribunal - In the present case, there is a dispute as to whether 
E 
the repeated notices sent by the petitioner to the respondents 
were ever received - There are further disputes (even if the 
notices were received by respondent-ONGC) as to whether 
they were actually received in the correct section of 
respondent-ONGC - These are matters of evidence which are 
normally best left to be decided by the Arbitral Tribunal - It 
F 
would be appropriate for Supreme Court to constitute the 
entire Arbitral Tribunal in exercise of powers uls. 11 (6). 
The instant arbitration petition was filed under 
Section-11 (6) of the Arbitration and Conciliation Act, 1996 
G 
seeking direction from this Court for appointment of the 
. nominee Arbitrator on behalf of the respondent and also 
appointment of third Arbitrator (Presiding Arbitrator) in 
557 
H 
558 
SUPREME COURT REPORTS 
[2013) 5 S.C.R. 
A the Arbitral Tribunal to adjudicate the disputes between 
the parties. 
The respondent raised preliminary objection to the 
maintainability of the arbitration petition contending that 
the petitioner had filed the present case only to bring 
8 unnecessary litigation; that the arbitration petition was an 
abuse of process of law and that the claims made were 
barred by a long period of time and were, therefore, dead 
claims. 
C 
Per contra, the petitioner submitted 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; 
that in any event, the petitioner had sent the final notice 
o on 9th January, 2012 and the respondent had denied the 
claim through its letter dated 29th February, 2012, thus, 
the disputes clearly arose only w.e.f. 29th February, 2012 
and therefore, the preliminary objection raised by the 
respondent deserves to be rejected. 
E 
F 
The question which arose for consideration was 
whether the arbitration petition is liable to be dismissed 
on the ground of limitation as it raises dead claims and it 
would not be necessary for this Court to leave the matter 
to be decided by the Arbitral Tribunal. 
Allowing the Arbitration Petition, the Court 
HELD: 1. A bare perusal of the observations made 
by this Court in the judgment in SBP & Co. case makes 
G it clear that the Chief Justice or the designated Judge can 
also decide whether the claim was dead one or a long-
barred claim. But it is not imperative for the Chief Justice 
or his designate to decide .the questions at the threshold. 
It can be left to be decided by the Arbitral Tribunal. The 
observations made in SBP & Co. case were explained by 
H 
SCHLUMBERGER ASIA SERVICES LTD. v. OIL & NATURAL 559 
GAS CORPN. LTD. 
this Court in Indian Oil Co. Ltd. Case. These observations 
A 
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 
B 
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 contractor makes a claim, which c 
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 cla

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