What is the period of limitation for filing an application under Section 11 of the Arbitration and Conciliation Act, 1996?

Last updated: 17 March 2021

Court :
Supreme Court of India

Brief :
The present Appeals raise two important issues for our consideration : (i) the period of limitation for filing an application under Section 11 of the Arbitration and Conciliation Act, 1996 (“the 1996 Act”); and (ii) whether theCourt may refuse to make the reference under Section 11 where the claims are ex facie time-barred?

Citation :
CIVIL APPEAL Nos. 843-844 OF 2021

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL Nos. 843-844 OF 2021
(Arising out of SLP (C) No. 1531-32/ 2021)

BHARAT SANCHAR NIGAM LTD. & ANR. …APPELLANTS

Versus

M/S NORTEL NETWORKS INDIA PVT. LTD. …RESPONDENT

J U D G M E N T

INDU MALHOTRA, J.

Leave granted.

1. The present Appeals raise two important issues for our consideration : (i) the period of limitation for filing an application under Section 11 of the Arbitration and Conciliation Act, 1996 (“the 1996 Act”); and (ii) whether theCourt may refuse to make the reference under Section 11 where the claims are ex facie time-barred?

2. (a) The factual matrix in which the present issues have arisen for our consideration is the issuance of a tender notification by the AppellantCompany [hereinafter referred to as “BSNL”] inviting bids for planning, engineering, supply, insulation, testing and commissioning of GSM based cellular mobile network in the southern region covering the Kerala, Karnataka, Tamil Nadu, Andhra Pradesh Circles, and the Chennai telephone district. In the tender process, the Respondent-Company [hereinafter referred to as “Nortel”] was awarded the purchase order. On completion of the Works under the purchase order, BSNL deducted / withheld an amount of Rs.99,70,93,031 towards liquidated damages and other levies.

(b) Nortel vide communication dated 13.05.2014 raised a claim for payment of the said amount.

BSNL vide letter dated 04.08.2014 rejected the claim of Nortel.

(c) After a period of over 5 ½ years, Nortel vide letter dated 29.04.2020 invoked the arbitration clause, and requested for appointment of anindependent arbitrator, wherein it was contended that the dispute ofwithholding the aforesaid amounts, would fall within the ambit of arbitrable disputes under the agreement.

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