The Supreme Court held that at the stage of Section 11 ...

Courts to Verify Arbitration Agreement Existence, Leave Time-Barred Claims Assessment to Arbitral Tribunal.

November 9, 2024

Case Laws     Indian Laws     SC

The Supreme Court held that at the stage of Section 11 application under the Arbitration and Conciliation Act, 1996, the referral courts need only examine whether the arbitration agreement exists, and not delve into the merits of the claims. However, in rare cases where it is manifest that the claims are ex facie time-barred and dead, or there is no subsisting dispute, the courts can decline the reference to arbitration. The Court clarified that the period of limitation for filing a petition seeking appointment of an arbitrator cannot be conflated with the period of limitation applicable to substantive claims under the commercial contract. While the respondents contended that the petitioner's claims were time-barred, the Court left it to the arbitral tribunal to adjudicate upon this issue as a preliminary matter, as the existence of the arbitration agreement was not disputed.

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