The limitation period for filing an application under Sec 8 Arbitration Act says the High Court of Delhi

By
Asif Iqbal
-
Delhi HC to form a special tribunal to monitor the latest motor accident claims scheme

The case deals with the Merits of Arbitration and Limitation. Here two suits were filed by SSIPL Lifestyle Pvt Ltd, against Vamla Apparels Pvt Ltd and M/S Jaya Pramanand Patel, for recovery of sums. The suits were filed under § 8 of Arbitration and Conciliation Act, 1996 but it was accepted that the Limitation time for the said cases have expired and the application was dismissed along with other pending applications.

There were two suits which were filed by SSIPL Lifestyle Private Limited against the defendant, namely, Vamla Apparels (India) Private Limited and Ms Jaya Pramanand Patel (hereinafter Vamla). Both the suits were filed for recovery of sums of Rs. 2,17,31,781/- and Rs. 3,38,73,866/- respectively, includes the interest and other reliefs. The suit was filed due to the agreement which was entered between the parties on 22nd April 2016. The consideration mentioned in the agreement was that the SSIPL will provide Vamla various products for sale from the Vamla Department Store situated in Kanchenjunga, 72 Peddar Road, Mumbai- 400026. The agreement was signed by Jaya Pramanand Patel in behalf of Vamla Apparels (India) Private Limited and there were security deposits of Rupees 35 and 70 Lakhs by SSIPL with Vamla and space was need to be decorated as per the requirement mentioned by the SSIPL. The products belonging to the plaintiff need to be stocked and stored by Vamla at the allocated space. The marketing and promotion of the brand need to be performed by the SSIPL and The sale margin of 14% of the net sales value of the products sold from all allocated space, was to be provided to Vamla.

There was an addendum entered into where some minimum amount of sale was also guaranteed by Vamla. A further side letter was also exchanged between the parties on the same date. The products which were to be sold include products under the brand names – Nike, Adidas and Sports Station. There was a notice which was filed against the plaintiff dated 21st August 2017 wherein they sought the refund of outstanding amounts. The letter dated by SSIPL on 20th October 2017, the agreement was terminated and continuous correspondence between parties including Section 138 of the Negotiable Instruments Act for dishonoring the cheque sum of 5 lakhs. Therefore, the present two suits filed by the plaintiff were to seek recovery of the amounts. Further, the defendant filed two applications under the Section 8 of the Arbitration and Conciliation Act, 1996 in each of the suits and counsels appearing for SSIPL that no arbitral dispute exists between the parties as the period of limitation for filing of the Section 8 application has expired.

The High Court of Delhi opined that “The Legislature has now made a conscious change by using the language “not later than the date of”. The use of the word ‘date’ itself signifies precision. A perusal of the various amendments brought about in 2016 Amendment Act shows that the intention was to tighten the time limit within which arbitration proceedings should commence and conclude.”

Further, it was added by the Court that, “… The amendment is a conscious step towards prescribing a limitation period for filing the Section 8 application. 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 crystallized date and not a ‘period’ before the filing of the first statement on the substance of the dispute.”

The Bench maintained that the defendant didn’t apply to Section 8 within the prescribed period as in any case and this includes case as per Booz Allen and Hamilton Inc., they weren’t filed at the earliest. Thereby, the application under Section 8 was dismissed along with other pending applications.

Key-Features:-

  • The Judgment was given by the Single Judge Justice Prathiba M. Singh.
  • The Plaintiff was represented by Advocate Alishan Naqvee, Mohammad Kamran and Parul Parmar. 

Respondents were factored by Advocate Somya Jaitly. 

  • The Court declined the application recorded under Section 8 as it wasn’t filed within a prescribed period. 
  • There were two applications under Section 8 of the Arbitration Act, each of the suits were filed by the Defendants. 
  • The court also observed that Article 8 of UNCITRAL Model Law was followed in the un-amended Section 8.

Edited by J. Madonna Jephi

Approved & Published – Sakshi Raje

Reference:-

RELATED ARTICLESMORE FROM AUTHOR