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TMI Blog2023 (5) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... held in April 2017, and on perusal of the minutes of the meetings, I am of the view that the discussions between the parties were exhaustive wherein both the sides made certain specific commitments in relation to the pending work at site and bill payments. Therefore, even though the respondent had unilaterally short closed the contract, the resolution recorded in the said meetings indicated their intent to have the pending work completed with set timelines. The limitation period will not be operative against the petitioner from February 05, 2019 onwards, and hence, the present petition is well within time and not barred by limitation. Ultimately, the scope of judicial interference under section 11 finds its genesis in VIDYA DROLIA AND OTHERS VERSUS DURGA TRADING CORPORATION [ 2020 (12) TMI 1227 - SUPREME COURT] , as extremely limited, and only in those cases, where no iota of doubt regarding a claim being ex-facie time-barred is present. If and when the Court is in doubt, it has to refer the matter to the arbitral tribunal for adjudication. Justice Sahidullah Munshi, Former Judge, Calcutta High Court, appointed as a sole arbitrator to arbitrate upon the disputes which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as within a period of 26 months from the date of start of work, and within a period of 15 months from the date of start of work for Part II. 5. Even though both LOIs and contracts were with independent scope of work, they were part of the same site and work was carried on simultaneously on locations adjacent to each other. Therefore, the communications as well as billing for the two sites were done together. The first milestone activity related to the project was completed on December 21, 2011. 6. The present arbitration petition is concerned with the Phase II LOI wherein disputes arose between the parties with regard to, among other causes, execution of the project and contractual obligations of the parties. 7. The respondent was irregular in payments of bills since October 2012 onwards and the petitioner vide emails dated January 17, 2013 and January 18, 2013 informed the respondent about the stage of the work and asked for clear instructions on whether the respondent wanted them to stop the work or temporarily demobilise the site. The petitioner also requested for payment of long standing dues against the bills raised. 8. However, the respondent vides email dated Jan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om where the contract was issued or such other place as the arbitrator at his discretion may determine. The said clause does not provide for seat of the arbitration. 15. On receipt of the afore-mentioned legal notice, the respondent again called for a meeting on March 06, 2019 with the petitioner at its regional office in Kolkata. Subsequent to this meeting, the petitioner submitted its claim on March 16, 2019 with all its requisite documents. On March 28, 2019, the respondent, on its part, acknowledged the receipt of the claim with a request to withdraw the arbitration notice dated January 16, 2019. 16. On failure on the part of the respondent to make any headway with the claims and possible amicable settlement, the petitioner wrote on September 15, 2019 communicating its intent to initiate the arbitration proceedings. In reply, the respondent vide its email dated September 26, 2019 asked the petitioner to submit work order wise bifurcation of the claims without which assessment of the claims are not possible, and the petitioner responded immediately with reasons of its inability to do so. 17. The respondent vide email dated September 27, 2019, reiterated the efforts on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natural justice principle of nemo judex in causa sua that is 'no one should be made a judge in his own case'. For arbitration decisions to be respected and accepted as decrees of the court, a similar level of integrity in the appointment of arbitrators must be ensured. 23. Keeping the aforesaid principles in mind, this Court is of the firm opinion that the appointment procedure as per clause 2.21 of the contract cannot be sustained as it is in direct contravention to the aforecited judicial pronouncements and legal principles. 24. Now, before proceeding ahead with the appointment of a sole arbitrator, the arguments advanced by Mr. Bhattacharya, counsel for the respondent, cannot be overlooked and needs to be adjudicated upon by this Court. He argued on the point of limitation and stated that the claims are hopelessly time-barred and the same would entail this Court to decline referring the matter to arbitration at the first instance. Mr. Kumar, counsel for the petitioner relied upon Uttarakhand Purv Sainik Kalyan Nigam Ltd.-v-Northern Coal Field Ltd. reported in 2020 2 SCC 455 to argue that limitation is a mixed question of facts and law which can be decided by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having perused through the relevant precedents, we agree that on a certain set of facts and circumstances, the period during which the parties were bona fide negotiating towards an amicable settlement may be excluded for the purpose of computing the period of limitation for reference to arbitration under the 1996 Act. However, in such cases the entire negotiation history between the parties must be specifically pleaded and placed on the record. The Court upon careful consideration of such history must find out what was the 'breaking point' at which any reasonable party would have abandoned efforts at arriving at a settlement and contemplated referral of the dispute for arbitration. This 'breaking point' would then be treated as the date on which the cause of action arises, for the purpose of limitation. The threshold for determining when such a point arises will be lower in the case of commercial disputes, where the party's primary interest is in securing the payment due to them, than in family disputes where it may be said that the parties have a greater stake in settling the dispute amicably, and therefore delaying formal adjudication of the claim. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despite petitioner's earlier communication dated October 14, 2019 elaborating its inability to do so. The ensuing emails by the respondent were merely reminders of its email dated October 24, 2019. It is to be noted here that final bills could never be issued by the petitioner as the project was on 'Hold', and in fact, there existed pending dues for the bills previously raised bills by the petitioner. 32. Therefore, after a careful perusal of the aforesaid facts, it would not be incorrect to state that the cause of action herein has been of a 'continuous' nature. The claims of the petitioner never attained finality, and remained a 'live claim' as the parties were in mutual discussion to resolve the disputes between them. The arbitration petition was filed on July 28, 2021 that is within a period of one and half years from the respondent's last communication vide email dated January 09, 2020, and within a period of two and half years from the issuance of Section 21 notice dated January 16, 2019. 33. In any case, the petitioner company is undergoing CIRP proceedings before the Ld. NCLT, Principal Bench, New Delhi wherein an order of moratorium wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium (supra), the respondent had categorically stated that no claim was existing after the settlement of the final bill. In that particular case the claimant/petitioner continuously issued notices, therefore, the respondent held meetings with the claimant without prejudice to their rights and contentions. The present case is distinguishable as is clear from the facts noted above wherein the respondent never denied the claim of the petitioner and kept calling the petitioner for amicable settlement talks. In light of the same the breaking point as discussed in the Supreme Court judgement in Geo Miller (supra) was never reached till January, 2019 when the Section 21 notice was issued by the petitioner. In fact, even after this date, meetings were held between the parties to try and sort out the issues but the same could not be done. Ergo, the Section 21 notice dated January 16, 2019 and the filling of the Section 11 petition on July 28, 2021 were not time barred. Accordingly, the present case would not fall under the realm of deadwood and is therefore required to be referred to arbitration. 34. Moving on, the argument put forth by Mr. Bhattacharya that the present petition is prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal. 36. In light of the aforesaid findings, I appoint Justice Sahidullah Munshi, Former Judge, Calcutta High Court, as a sole arbitrator to arbitrate upon the disputes which have arisen between the parties. The learned arbitrator has already been appointed by me to resolve similar disputes between the parties in AP No. 312 of 2021 and AP No. 314 of 2021. The learned arbitrator will be guided by the Arbitration and Conciliation Act, 1996, and shall make all positive efforts to complete the arbitration proceedings expeditiously. The appointment is subject to submission of declaration by the Arbitrator in terms of Section 12(1) in the form prescribed in the Sixth Schedule of the Act before the Registrar, Original Side of this Court within four weeks from today. 37. The Registry is directed to immediately send a copy of this order to the sole arbitrator. The learned counsels for the parties are also at liberty to bring it to the notice of the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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