On February 19, 2020 Delhi High Court Single Judge bench of Justice Prathiba M Singh has ruled that the period of limitation provided for filing written statements in Code of Civil Procedure, 1908 (CPC) and Commercial Courts Act, 2015, would also apply to written statements filed under section 8 of the Arbitration and Conciliation Act, 1996.
The Petitioners argued that under Section 8 application, seeking the dispute between both the parties to be referred up arbitration, is maintainable as it was filed prior to filing of any other substantive defence by the Petitioners. While on the other hand, the Defendants argued that no arbitrable dispute exists between the parties as the period of limitation for filing of the Section 8 application has expired.
After Analysing arguments from both side, two questions were raised before the court were:
- Whether there is a limitation period prescribed for filing of an application under Section 8 of the Arbitration and Conciliation Act?
- Whether the limitation for filing of the written statement as prescribed in the Civil Procedure Code, 1908 as also the Commercial Courts Act, 2015 would be applicable for filing of a Section 8 application.
The court observed Amicus Curia Mr. Darpan Wadhwa submission that there is a divergence of opinion on whether the time limit for filing the written statement would apply for filing of Section 8 application. It is further submitted that the Supreme Court in Booz Allen (supra) though held that there is no time limit, the application had to be filed `at the earliest.
Court before answering the two questions tried to find out why the difference in the language to the extent it is different, for the purpose of this case, is on the phrase not later than when submitting and not later than the date of submitting.
The Court also observed that Article 8 of the UNCITRAL Model Law was followed in the un-amended Section 8. However, in the amended Section 8, there is a departure. In the un-amended Section 8, it is also settled that the objections as to Section 8 could be contained in the written statement itself and it is also settled that a Section 8 application could be moved along with the written statement itself.
Section 8, it is also settled that the objections as to Section 8 could be contained in the written statement itself and it is also settled that a Section 8 application could be moved along with the written statement itself. Therefore, the moot question before the court was, whether the adding of the words 'the date of' in the amended section 8 means that the date for filing a written statement in a suit would be considered as the limitation period for filing of a Section 8 application.
The court answered that question in affirmative by noting that:
'Viewed in the background of the amendments in the CPC including the recent amendments in CPC in the context of the Commercial Courts Act, 2015 and the amendments in the Arbitration Act, 2016, this Court concludes that the amendment is a conscious step towards prescribing a limitation period for filing the Section 8 application.'
It is further highlighted by the court that the mention of the word "date" in the amended provision means that it is a precise date and usually incapable of ambiguity. The same is a crystalized date and not a period prior to the filing of the first statement on the substance of the dispute. It says:
The entire intention is that those parties who wish to proceed for arbitration ought to do so with alacrity and speed and not merely procrastinate.
The court, therefore, dismissed Petitioner's application under section 8 of the Arbitration and Conciliation Act by saying:
"The Defendant cannot defeat the intention behind the amendments in the Civil Procedure Code and the Arbitration Act, by choosing to file a Section 8 application at its own sweet will".
Author Satwik Sharma
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