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TMI Blog1993 (4) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... e long after 10 years the arbitration cannot be proceeded with. Accordingly finding that it to be an exceptional case for interference, the learned Single Judge cancelled the arbitration clause 68 of the contract in matter Nos. 1326, 1364 and 1365/90 dated November 23. 1990. On further appeals the division bench by its order dated December 18, 1992 in Appeal Nos 104/90 etc. dismissed the appeals. Thus these special leave petitions. The contention of the petitioner appearing in person is that Clause 68 of the Contract provides for appointment of an arbitrator and when the petitioner has legally invoked clause 68 and issued notice to the respondent, the respondent is duty bound to appoint an arbitrator and on its failure it is open to him to approach the Court for appropriate remedy under s. 8 of the Act for appointment of an arbitrator. The High Court scuttled this procedure in exercising the power under S. 5 of the Act which is illegal and ultra vires. He further contented that Section 5 has no application to the facts of this case. We have heard also Shri D.P. Gupta, the learned Solicitor General for the respondent. The question for consideration is whether the High Court was ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances to grant leave to a contracting party to have the arbitrator or umpire removed and the-arbitration agreement entered into with other contracting part revoked. Where the Court grants such authority consequentially arbitration agreement shall cease to have effect with respect to the difference or dispute. It flows therefrom that there exist implied power vested in the court permitting a party to avail the remedy under ss. 5 & 12 to rescind the arbitration agreement. In all cases it is not a condition precedent that there should in the first instance be an order appointing an arbitrator or he should enter upon reference for adjudication. In given circumstances and the factual background the court may be justified to exercise the power under ss.5 and 12. The question then is under what circumstances such power would be exercised. This Court in M/s Amarch and Lalit Kumar v. Shree Ambica Jute Mills Ltd. [1963] 2 SCR 953 at 969 held thus: "In exercising its discretion cautiously and sparingly the Court has no doubt (kept) these circumstances in view, and consider that the parties should not be relieved from a tribunal they have chosen because they fear that the arbitrator's de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y matter required by the agreement to be referred until an award is--made under the agreement, a cause of action shall, for the purpose of limitation, be deemed to have accrued in respect of any such matter at the time when it would have accrued but for that term in the agreement. Sub-section (3) thereof states that for the purposes of this section and of the Indian Limitation Act, 1908 an arbitration shall-be deemed to be commenced when one party to the arbitration agreement serves on the other party thereto a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement, requiring that the difference be submitted to the person so named or designated. Sub-sections (4) and (5) are omitted as being not material. It would, therefore, be clear that the provisions of the Limitation Act would apply to arbitrations and notwithstanding any term in the contract to the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party in respect of any such matter at the time when it should have accrued but for the. contract. Cause of arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a claim in any application that might be made to the law courts. This ratio was approved by House of Lords in Naamlooze Vennootschap Handels-En- Transport-Maatschappij "Vulcaan' v. A/S J. Ludwig Mowinckels Rederi [1938]2 All E.R. 152, Lord Maugham, L.C. speaking for the unanimous Court held that in considering whether the Limitation Act would apply to arbitration (pre-statutory arbitrations), it was held that this seems to be a good reason for holding that there may well be cases where the object of both parties to the arbitration might be to determine whether a sum was due, though possible or certainly not recoverable by legal Proceedings. We are, however, here concerned with an arbitration in which legal rights are being advanced or denied If the defence of the statute is to be deemed in admissible, it would seem that the claims of one party or the other might be put forward long after the persons who could give useful evidence had died and the most relevant documents had been destroyed If the legal defence were to be excluded, it was in this agreement that one would expect to find such a provision The matter does not rest cause we have to consider how far the suggested elimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin a shorter period than that allowed by statute; but the court then has power to enlarge the time so agreed. The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned. Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued. Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued. In Russell on Arbitration, at pages 72 and 73 it is stated thus: "Disputes under a contract may also be removed, in effect, from the jurisdiction of the court, by including an arbitration clause in the contract, providing that any arbitration under it must be commenced within a certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. Defaulting party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred. The question, therefore, as posed earlier is whether the court would be justified to permit a contracting party to rescind the contract or the court can revoke, the authority to refer the disputes or differences to arbitration. Justice Bachawat in his Law of Arbitration, at p. 552 stated that "in an appropriate case leave should be given to revoke the authority of the arbitrator'. It was also stated that an ordinary submission without special stipulation limiting or conditioning the functions of the arbitrator carried with it the implication that the arbitrator should give effect to all legal defences such as that of limitation. Accordingly the arbitrator was entitled and bound to apply the law of limitation. Section 3 of the Limitation Act applied by way of analogy to arbitration proceedings, and like interpretation was given to s. 14 of the Limitation Act, The Proceedings before the arbitration are like civil proceedings before the court within the meaning of s. 14 of the Limitation Act, By consent the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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