West End Motors v. Delhi Metro Rail Corporation Ltd

1. The petitioner has filed the present petition under Section 11 ofthe Arbitration and Conciliation Act,1996for appointmentofan Arbitrator.

2. Learned counsel for the respondent does not dispute that certain works were done by the petitioner. There is an arbitration clause existing in the agreement and before filing of the present petition, the petitioner also invoked the arbitration. It is a matter offact that in 2010 also the petitioner tried toinvoke the arbitration. However,the same could not be materialised due to further correspondences exchanged between the parties. The facts and circumstances ofthe case are mentioned in the petition pertaining to the delay. The correspondences were exchanged between the parties up to January,2012. As the respondent was not agreeable to accept the claims of i the petitioner,it is left with no option butto invoke the arbitration in 2014.

3. As perth^ petitioner,its claim is aboutRs.60 lacs.

4. The main objection ofthe respondentfor appointmentofan Arbitrator 2016:DHC:8301 \ > is that claim is time'barred as no response was received from the petitioner w.e.f. 3"^ January, 2011 as the petitioner has failed to submit the detail drawings and specifications for the modification ofthe ramp proposed for modification and got the same approved from MCD. The petitioner vide letter dated 29^ December,2010 finally decided to file a case against the respondent.:

5. The petitioner itselfhas admitted that vide letter dated 9^ April,2010 the petitioner invoked the arbitration clause for appointment of the Arbitrator. Thus,it is apparent that the cause ofaction had arisen in April, th 2010 when the petitioner as per its own admission issued the letter dated 9 April,2010 invoking the clause seeking resolution ofdispute for arbitration. It is further submitted that in view ofthe facts and Submissions made above as well as in the,brieffacts ofthe case no arbitrable dispute survives in the matter as now thke is no live claim and the claim is barred by time.

6. I have heard the learned counsel for both the parties. After hearing and having gone through the correspondence exchanged between the parties from the year 2010 to 2012,I am ofthe view that there is a live dispute existing between the parties. The claims raised by the petitioner are prima facie not dead claim. The objection ofihe respondent on limitation can be decided by the Arbitral Tribunal. Unless it is clear that there is no live claim(s) normally the issue of limitation is a mixed question of law and facts. The claims in the present case are not ex-facie time barred. Therefore references ofJthe claims are necessary to be adjudicated by the Arbitral Tribunal.

7. The prayer made in the present petition is even otherwise liable to be allowed in view ofthe decision given by the Supreme Court in the case of Schlumberger Asia Service Ltd. v. Oil and Natural Gas Corporation Ltd.,AIR2013 SC;3778. Para25 ofthe saidjudgmentreads as under: XXX: XXX XXX XXX XXX ''14. To find:out whether a claim is barred by res judicata, or whether a claim is 'mala fide', it will be necessary to examine the facts and relevant documents. What is to be decided in an application under Section 11 ofthe Act is whether there is an arbitration agreement between the parties. The ChiefJustice or his designate is not expected to go into the merits ofthe claim or examine the tenability ofthe claim, in an application under Section 11 ofthe Act. The ChiefJustice or his designate may however choose to decide whether the claim is a dead (long- T barred) claim or whether the parties have, by recording satisfactioh, exhausted all rights, obligations and remedies under the contract,so that neitherthe contract northe arbitration I ^ agreement survived. When it is said that the ChiefJustice or his designate? may choose to decide whether the claim is a dead claim, it is implied that he will do so only when the claim is evidently,andpatently a long time-barred claim and there is no need for any detailed consideration of evidence. We may elucidate by an illustration: if the contractor makes a claim a decade or so after completion ofthe work without referring to any acknowledgment ofa liability or other factors that kept the claim alive in law, and the claim is patently long time-barred, the Chief Justice or his designate will examine whether the claim is a dead claim(that is, a long time-barred claim). On the other hand,ifthe contractor makes a claim for payment,beyond three ypars ofcompleting ofthe work but say within five years ofcompletion ofwork,and alleges that the final bill was drawn up and payments were made within three years beforethe claim, the Court will not enter into a disputed question whether the claim was barred by limitation or not. The Court will leave the matter to the decision ofthe Tribunal.Ifthe distinction between apparent and obvious dead claims, and claims involving disputed issues of limitation is not kept in view, the Chief Justice or his designate will end up deciding the question oflimitation in all applications under Section 11 ofthe Act." (emphasis supplied) These observations make it clear that it is optional for the Chief Justice or his designate to decide whether the claim is dead (long-barred). It is also made clear by this Court that the Chief Justice or his designate would do so only when the claim is evidently and patently a long time-barred claim. The claim could be said to be patently long time-barred, ifthe contractor makes it a decade or so after completion of the work without referring to any acknowledgment ofa liability or other factors that kept the claim alive in law. On the other hand, if the contractor makes a claim,which is slightly beyond the period of three years of completing the work say within five years of completion,the Court will not enter into the disputed questions offact as to whether the claim was barred by limitation or not. Thejudgmentfurther makes it clear thatthere is no need for any detailed consideration ofevidence."

8. The liberty is granted to the respondentto raise the issue oflimitation before the learned Arbitrator at any stage. Ms.Aditi Sharma, Advocate, Mob. No.9899674082, who is present in Court, is appointed as sole Arbitrator to adjudicate the disputes between the parties as mentioned in the present petition. The parties are also allowed to file their respective claims and counter-claims before the Arbitrator. The parties to appear before the Arbitrator on l'^ July,2016in DelhiHigh CourtBarRoom No.18.

9. The arbitration proceedings shall take place in the High Court premises itself. The Arbitrator shall ensure the compliance ofthe provisions ofArbitration and Conciliation(Amendment)Act,2015 before commencing the arbitration. The fees ofthe learned Arbitrator is fixed at Rs.1,00,000 /which shall be shared by both the parties in equal proportions.

10. The petition is accordingly disposed of.

11. Copy ofthis order be given dastito the learned counselforthe parties and a copythereofbe delivered to thelearned Arbitratorforthwith.

APRIL 04,2016/jk H,J O M i