NEW DELHI: In a significant judgment on March 1, the Supreme Court has favoured Parliament to bring in an amendment to the Arbitration and Conciliation Act, 1996 prescribing a specific period of limitation for a party to approach the court for appointment of arbitrators for resolving a dispute.
A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra said in many other matters, it has been observed that the Limitation Act has to be applied as a result of legislative vacuum as there is no statutory prescription regarding the time limit for it.
"We would again like to reiterate that the period of three years (under Section 137 of the Limitation Act) is an unduly long period and goes against the very spirit of the Arbitration Act, which provides for expeditious resolution of commercial disputes within a time-bound manner," the bench said.
The court noted various amendments to the Act, 1996 have been made over the years so as to ensure that arbitration proceedings are conducted and concluded expeditiously.
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The court was hearing a plea by a Kabul-based company M/s Arif Azim Co Ltd for the appointment of an arbitrator for the adjudication of disputes and claims from Mumbai- based M/s Aptech Ltd.
In the case, the bench appointed Justice Sanjay Kishan Kaul, former Judge of the Supreme Court, to act as the sole arbitrator, in the disputes, including on payment of money.
In the case, the bench said it cannot be said that the claims sought to be raised by the petitioner are ex-facie time-barred or dead claims on the date of the commencement of arbitration.
The bench said in ordinary circumstances, the limitation period available to the petitioner for raising a claim would have come to an end after an expiry of three years, that is, on March 27, 2021.
"However, in March 2020, the entire world was taken under the grip of the deadly Covid-19 pandemic bringing everyday life and commercial activity to a complete halt across the globe.
Taking cognisance of this unfortunate turn of events, this Court vide order dated 23.03.2020 passed in Suo Motu Civil Writ Petition No. 03/2020 directed the period commencing from 15.03.2020 to be excluded for the purposes of computation of limitation. The said extension of limitation was extended from time to time by this Court in view of the continuing pandemic," the bench said.
