The Delhi High Court in Information TV Private Limited Vs. Jitendra Dahyabhai Patel (ARB.P. 1143/2023 decided on 06.02.2024) held that the limitation for filing of Petition under Section 11(6) of the A&C Act is governed by Article 137 of the Limitation Act, 1963. The limitation period of 3 years commences after the invocation of the arbitration.
FACTS
Information TV Private Limited (hereinafter referred to as the “Petitioner”) had entered into a Memorandum of Understanding on 01.05.2018 (hereinafter referred to as the “MOU”) with Jitendra Dahyabhai Patel (hereinafter referred to as the “Respondent”) to operate a television channel “India News Gujarati”.
In furtherance to the MOU, the Respondent was to invest Rs. 14 crores into a new company that was to be incorporated. The dispute in the present case arose in respect of the said MOU. Clause 6 of the MoU provided that in case of any dispute between the parties, the same shall be settled by arbitration and shall be referred to the Sole arbitrator (appointed by both parties mutually).
The Petitioner invoked Arbitration and filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “A&C Act”) vide OMP (I) (COMM) 376/2020 and was disposed of with a direction to restraining the Respondent not to interfere in the day to day functioning of the Company till the conclusion of the arbitral proceedings.
The Petitioner issued a notice invoking arbitration under Section 21 of the A&C Act on 07.03.2021, which was not replied to by the Respondent. The Petitioner sent another letter dated 05.04.2021, requesting for the nomination of an Arbitrator.
Hence, the Petitioner has filed the present Petition under Section 11(6) of the A&C Act for the appointment of a Sole Arbitrator in terms of Clause 6 of MOU.
ISSUE BEFORE THE DELHI HIGH COURT
Whether the present Petition filed under Section 11(6) of the A&C is maintainable?
CONTENTIONS OF THE PARTIES
The Petitioner relied upon Sundaram Finance Ltd. v. NEPC India Ltd., [(1999) 2 SCC 479] and contended that the intent to arbitrate and the effective steps in furtherance to the same for commencement of arbitral proceedings.
The Petitioner argued that the Petitioner had complied with both conditions; invocation of arbitration notice was issued within 90 days of the order of Section 9 Application. Further, the letter for the nomination of Arbitrator was also not replied by the Respondent.
The Respondent relied on Ezen Aviation Pty Limited & Anr. v. Big Charter Private Limited (2021: DHC: 4152-DB) and argued that the timeline for filing of Petition under Section 11(6) of the A&C Act is only for 90 days after the order of Section 9 Application, and hence, the present Petition was time-barred.
The Respondent further argued that out of Rs.14 Crores, over Rs.10 Crores were invested by the Respondent. Hence, the Petitioner had failed to deliver the obligations under the MOU.
DECISION AND FINDINGS
The Delhi High Court relied on Bharat Sanchar Nigam Limited v. Nortel Networks India Private Limited, [(2021) 5 SCC 738] and Secunderabad Cantonment Board v. B. Ramachandraiah and Sons, [(2021) 5 SCC 705] and observed that the limitation for filing of Section 11(6) of the A&C Act would be covered under the residual provision of Article 137 of the Limitation Act, 1963.
The Delhi High Court further observed that the Notice for Invocation of Arbitration was issued within 90 days of the order of the Section 9 Application. Hence, as the present Petition is filed within 3 years of invoking Arbitration, the present Petition is within limitation.
The High Court appointed Mr. Sandeep Mahapatra, Advocate as the sole Arbitrator and disposed of the Petition.
AMLEGALS REMARKS
The Delhi High Court in the present case held that the limitation for filing of a petition under Section 11 of A&C Act would be governed by Article 137 of the Limitation Act, 1963. Moreover, after the disposal of an application filed under Section 9 of the A&C Act, the arbitration has to be invoked within 90 days. Moreover, further within 3 years of invocation of Arbitration, petition under Section 11 of the A&C Act has to be filed.
The High Court has upheld the legislative intent of speedy redressal of disputes and hence, allowed the present petition and appointed an arbitrator for adjudication of the proceedings.
-Team AMLEGALS, assisted by Ms. Surbhi Talreja (Intern)
For any query or feedback, please feel free to get in touch with rohit.lalwani@amlegals.com or himanshi.patwa@amlegals.com
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