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Punjab and Haryana High Court: In a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’) for appointment of an independent Arbitrator, a Single Judge Bench of Jasgurpreet Singh Puri, J., held that there is a distinction between a claim to be made and petition under Section 11 to be filed, thus, the present petition was filed within the period of limitation of 3 years and appointed the second arbitrator since the respondent-company had failed to respond to the notice served by the petitioner-company.
Background
In the present case, there was an agreement between the petitioner company and the respondent company, and when a dispute arose between the parties, the respondent instead of invoking the arbitration clause, filed a civil suit for mandatory injunction and for recovery of damages before the Additional District Judge, Commercial Court (‘Add. DJ’). The petitioner did not file any application under Section 8 of the Arbitration Act but at the same time, he had taken specific objection in the written statement that when there was an arbitration clause, the civil suit was not maintainable. However, he also filed an application for treating the said objection as a preliminary objection, but the same was rejected by the Add. DJ and thereafter the petitioner challenged the said order. However, his application for dismissal of civil suit was rejected by filing a civil revision petition before the High Court.
Thereafter, the petitioner preferred SLP (Civil) which was dismissed. Thereafter, the civil suit commenced and ultimately was dismissed on the ground of maintainability because of the existence of an arbitration clause, and that the civil suit was not decided on merits.
Petitioner contended that the civil suit which was filed by the respondent for mandatory injunction and damages was never decided on merits, and it was rather dismissed on the ground of maintainability because of the existence of an arbitration clause. Thereafter, none of the parties assailed the said judgement passed by the Civil Court and after that the petitioner invoked the arbitration clause by issuance of notice since the dispute was still in existence and also nominated his proposed arbitrator but the same was not replied by the respondent and therefore, the petitioner approached the High Court through the present petition.
The respondent relied on Geo Miller and Co. Pvt. Ltd. v. Rajasthan Vidyut Utpadan Nigam Ltd. (Geo Miller case) 2019 SCC Online SC 1137 and submitted that the notice for invoking the arbitration clause was served on 17-1-2025 which was way beyond the period of limitation and therefore, not only is the claim was barred but also filing of the present petition was barred by limitation.
Analysis and Decision
The Court considered the objection regarding the issue of res judicata and stated that since the dispute was not decided by way of a civil suit on merits, rather was dismissed on the ground of existence of the arbitration clause, thus it could not be operated as res judicata. Therefore, the Court held that the first objection raised by respondent was not sustainable.
Regarding the second objection with respect to the limitation, the Court stated that it is a settled law that the period of limitation for filing a petition under Section 11 of the Arbitration Act would be reckoned from the date the notice invoking the arbitration clause is served upon the other party. This period will not be reckoned from the date of breach of any contract or dispute. There is a distinction between a claim to be made and petition under Section 11 to be filed. The Court further stated that so far as the claim being time barred is concerned, the same is also a fact which can be gone into and is within the scope and subject matter of the Arbitrator or the Arbitral Tribunal.
With respect to the limitation pertaining to filing of the petition under reference, the Court noted that the same was 3 years from the date of service of the notice and stated that the reliance placed upon Geo Miller case (supra), was misplaced as it had been dealt with by Supreme Court in Arif Azim Co. Ltd. v. Aptech Ltd., 2024 SCC OnLine SC 215. The Court stated that in the present case, the date of issuance of notice was 17-1-2025, and the petition was filed on 16-5-2025 which was within the period of 3 years. Therefore, the present petition was filed within the period of limitation of 3 years.
Further, the Court stated that the petitioner had already nominated the arbitrator, therefore, the second Arbitrator was required to be appointed by the High Court since the respondent had failed to respond to the notice served by the petitioner. The Court stated that all the essential conditions for appointment of an Arbitrator under Section 11 of the Arbitration Act stood satisfied. Thus, the Court allowed the present petition and nominated the second arbitrator.
The Court stated that the arbitrator nominated by the petitioner and the second arbitrator appointed by the High Court would nominate the Presiding Arbitrator, thereby constituting an Arbitral Tribunal as per the arbitration clause.
[Shinryo Suvidha Engineers India Pvt. Ltd. v. Cosmas Research Lab Ltd., 2026 SCC OnLine P&H 773, decided on 22-1-2026]
Advocates who appeared in this case:
For the Petitioner: Kartik Rai, Advocate
For the Respondent: Nitin Thatai, Advocate
Buy Arbitration and Conciliation Act, 1996 HERE
