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TMI Blog2024 (11) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... d is whether there exists an arbitration agreement. All other aspects touching upon the merits or maintainability of the claim/s are required to be dealt with by a duly constituted Arbitral Tribunal. Likewise, the fact that there are proceedings pending under Section 138 of the NI Act as also the fact that the petitioner, in the first instance, sought to seek resolution of the matter through pre-litigation mediation under the CC Act, would not preclude the petitioner from taking recourse to arbitration and seek adjudication of the disputes on merit - there is no impediment to constitution of an Arbitral Tribunal to adjudicate the disputes between the parties. A perusal of the arbitration agreement shows that it contemplates a three-member Arbitral Tribunal. At this stage, learned counsel for the respondent submits that a Sole Arbitrator be appointed by this Court. The same request is also made by the learned counsel for the petitioner. The learned Sole Arbitrator may proceed with the arbitration proceedings subject to furnishing to the parties requisite disclosure as required under Section 12 of the A C Act - It is agreed between the parties that the arbitration shall take place un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner invoked the arbitration clause and issued a notice dated 16.02.2024. A response thereto, was sent by the respondent on 12.03.2024 whereby the existence of the arbitration agreement was not disputed, however, various contentions were made by the respondent on the merits of the disputes. Subsequently the present petition came to be filed. 5. Learned counsel for the respondent opposes the present petition on three grounds. Firstly, it is submitted that the present petition is hopelessly time barred, inasmuch as it has been filed after the expiry of more than three years from the date of execution of the MoU. Secondly, it is submitted that the proceedings are precluded on account of the pending proceedings under Section 138 of the NI Act. Thirdly, it is contended that since the petitioner has already sought to avail pre-litigation mediation, as contemplated under the CC Act, it is incumbent on the petitioner to file a civil suit and the petitioner is precluded from taking recourse to arbitration. 6. I find no merit in the aforesaid contentions. 7. The understanding of the learned counsel for the respondent that the limitation period for invocation of the arbitration would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sending a notice seeking reference under the Act 1996 because they are unclear of when the cause of action arose, the claim can become time-barred even before the party realises the same. 56. Russell on Arbitration by Anthony Walton (19th Edn.) at pp. 4-5 states that the period of limitation for commencing an arbitration runs from the date 35 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 take place upon the dispute concerned. 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 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. Even if the arbitration clause contains a provision that no cause of action shall accrue in respect of any matter agreed to be referred to until an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court at the stage of appointment of arbitrator shall examine the existence of a prima facie arbitration agreement and not any other issues. The relevant observations are extracted hereinbelow: 209. The above extract indicates that the Supreme Court or High Court at the stage of the appointment of an arbitrator shall examine the existence of a prima facie arbitration agreement and not other issues . These other issues not only pertain to the validity of the arbitration agreement, but also include any other issues which are a consequence of unnecessary judicial interference in the arbitration proceedings. Accordingly, the other issues also include examination and impounding of an unstamped instrument by the referral court at the Section 8 or Section 11 stage. The process of examination, impounding, and dealing with an unstamped instrument under the Stamp Act is not a timebound process, and therefore does not align with the stated goal of the Arbitration Act to ensure expeditious and time-bound appointment of arbitrators. [ ] (Emphasis supplied) 114. In view of the observations made by this Court in In Re : Interplay (supra), it is clear that the scope of enquiry at the stage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recourse to arbitration and seek adjudication of the disputes on merit. A Co-ordinate bench of this Court in Newton Engineering and Chemicals Limited and Ors. v. UEM India Pvt. Ltd. 2023:DHC:8476 , following the decision of the Supreme Court in Sri Krishna Agencies v. State of A.P. Anr., (2009) 1 SCC 69, has held as under:- 6. The relevant part of the Supreme Court judgment in Sri Krishna Agencies (supra) is set out below:- 4. Mr Adhyaru, learned Senior Counsel appearing in support of the appeal, submitted that the High Court has apparently confused the issue relating to the continuance of the arbitration proceedings as also the criminal proceedings, since when the cheques were dishonoured, a separate liability arose in terms of Section 138 of the Act, whereas the arbitration proceedings were under the agreement signed between the parties. It was submitted by him that the commencement and the continuance of the arbitration proceedings could in no way affect the criminal proceedings taken separately. 5. In support of his submissions, Mr Adhyaru referred to the decision of this Court in Trisuns Chemical Industry v. Rajesh Agarwal where the same question arose in relation to arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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