Prima Facie Existence Of Arbitration Agreement And Arbitrable Dispute Sufficient To Allow Application For Appointment Of Arbitrator: Delhi HC
The Delhi High Court observed that the reference courts at the stage of deciding an application for appointment of an arbitrator under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, cannot enter hyper-technical questions or the integrities of the same and prima facie if there is an arbitration clause and arbitrable dispute, the matter should be referred to the arbitrator.
The Respondent had contended that the claim by the Petitioner herein is ex facie time-barred, to which the Court reiterated that limitation is a mixed question of law and fact and therefore, must be decided by the Arbitrator.
The Bench of Justice Dinesh Kumar Sharma observed, “The court while deciding such petitions have also to take into account the intention of the legislature behind the enactments. The Arbitration and Conciliation Act has basically been enacted to encourage the settlement of disputes through alternative dispute remedies. The purpose of such an agreement is also to foster confidence amongst the parties that they will stand by their agreements. The Reference Courts at this stage cannot enter hyper-technical questions or the integrities of the same. If on the face of it, there is an agreement which contains the arbitration clause and there is an arbitrable dispute, the matter is required to be referred to the arbitrator.”
Advocate Sharukh Ejaz appeared for the Petitioner whereas Advocate Alok K. Aggarwal appeared for the Respondent.
The Court also held, “It is a settled law that limitation is a mixed question of facts and law and the same is required to be adjudicated by learned Arbitrator. However, the learned Arbitrator shall frame the preliminary question on the point of limitation and shall proceed ahead only after the preliminary issue is decided…If the claim is found to be barred by the limitation then the arbitrator need not proceed further. If the claim is found to be within the time the dispute shall be adjudicated in accordance with law.”
The Court reiterated the law on the jurisdiction of courts under Section 11 of the Arbitration Act and said that if the claims are ex facie or patently barred by limitation, they cannot be referred to arbitration, however, at the same time, the court is conscious of the fact that the limitation is a mixed question of fact and form and that is required to be adjudicated based on the facts and circumstances of each case.
Consequently, the Court appointed a former high court judge as the Sole Arbitrator in the matter and accordingly, disposed of the petition.
Cause Title: T.V. Today Network Ltd. v. Home and Soul Pvt. Ltd.
Appearances:
Petitioner: Advocates Sharukh Ejaz, Nilotpal Bansal and Farheen Penwale.
Respondent: Advocates Alok K. Aggarwal, Anushka Sharma and Raj Duggal.