Rajasthan High Court: In an application filed by petitioner, under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes arising out of an agreement entered into with Bharat Sanchar Nigam Limited (BSNL), a single-judge of Anoop Kumar Dhand, J., held that the application is maintainable as it is not barred by limitation and appointed the Sole Arbitrator to adjudicate the dispute.
In the instant matter, the petitioner, a construction firm, entered into a contractual agreement with BSNL dated 29-02-2016. The agreement contained a detailed arbitration clause (Clause 17) providing for resolution of disputes through arbitration by the Chief General Manager of BSNL or a designated officer.
Disputes arose after BSNL terminated the contract in October 2019 and forfeited certain amounts allegedly payable to the petitioner. A legal notice seeking arbitration was issued by the petitioner on 03-08-2021, however, no response was received. Consequently, the petitioner approached this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator.
The petitioner argued that the limitation for filing the application would begin from the date on which the arbitration notice was served, 03-08-2021. It was contended that the application filed on 29-11-2023 was well within the three-year limitation under Article 137 of the Limitation Act, 1963. The petitioner relied on Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313, where the Supreme Court held that the limitation begins to run from the date of service of notice invoking arbitration.
However, the respondents contended that the application was barred by limitation as the cause of action arose in October 2019 and the petitioner remained dormant thereafter. It was argued that the notices were never served on them. The respondents relied in B&T AG v. Ministry of Defence, 2023 SCC OnLine SC 657, to support their contentions.
The Court observed that the agreement between the parties and the termination of contract in 2019 is not disputed. The Court found that notices dated 03-08-2021 was issued to the respondents, and the application was filed on 29-11-2023, within three years of issuance of the notice.
The Court relied on Arif Azim Co. Ltd. (supra), and asserted that limitation commences from the date of service of notice invoking arbitration, not the date of accrual of cause of action. The Court held that “the view taken by the Larger Bench of the Hon’ble Supreme Court at later stage will preside over the view taken on earlier occasions.”
With regard to the appointment of arbitrator, the Court observed that the arbitration clause provided for appointment of an arbitrator by the Chief General Manager, BSNL, or his delegate and the respondents failed to appoint an arbitrator despite the issuance of notice dated 03-08-2021.
The Court allowed the application and appointed Shri Mahaveer Prasad Sharma (Retd. District Judge), resident of C-10, Near Ojha Ji Ka Bag, Gandhi Nagar, Tonk Road, Jaipur, as the Sole Arbitrator with following directions —
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Appointment will be subject to declaration under Section 12 of the Arbitration and Conciliation Act.
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Arbitration fee to be as per the Manual of Procedure for ADR, 2009 (as amended in 2017), or as determined by the Arbitrator with the parties’ consent.
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Parties to appear before the Arbitrator on 26-05-2025 or such other date fixed.
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Respective E-mail/ contact number/ mobile number of parties/their counsel to be provided in order to facilitate the Arbitrator to send information/communication to the parties, whenever required
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The information send by the Arbitrator, on such address/ E-mail/ cellphone of the parties or to their authorized representatives/ Lawyers, shall be treated as sufficient communication unless same is not changed.
[Sinsinwar Construction Co. v. Bharat Sanchar Nigam Ltd., 2025 SCC OnLine Raj 2244, Decided on 08-05-2025]
Advocates who appeared in this case :
Mr. Anshuman Saxena and Mr. Divyansh Saini, Counsel for the Petitioner
Mr. Jitendra Sharma, Counsel for the Respondents
Buy Arbitration and Conciliation Act, 1996 HERE
