1999 (12) TMI 783 - HC - Companies Law

Summary

Issues:
Challenge to arbitration award based on limitation period.

Analysis:
The petitioner challenged an arbitration award directing them to return shares or pay the price, citing limitation. The Capital Market Trading Regulations provide a three-month limitation for referring disputes to arbitration. The cause of action arose on 23-7-1996, but the dispute was referred on 20-12-1998, beyond the limitation. The Arbitrator's interpretation of the Bye-laws was disputed by the petitioner, claiming the claim was time-barred. The respondents argued that shares returned on 17-12-1997 extended the cause of action. However, the letter cited did not acknowledge liability. The absence of evidence within the limitation period supported the petitioner's argument. The court referred to Regulation No. 5, emphasizing the three-month limitation from the date of the cause of action. The respondents admitted the dispute arose on 23-9-1996, requiring referral within three months. No acknowledgment within the limitation period was presented, rendering the February 1998 reference untimely. Citing a relevant court judgment, the petition was allowed, granting relief to the petitioner in line with their plea.