The Supreme Court has recently suggested that it is necessary for the Parliament to effect an amendment to Section 11 of the Arbitration and Conciliation Act, 1996, prescribing a specific period of limitation within which a party may move the court for making an application for appointment of the arbitrator under said section.
The Apex Court observed that in view of the legislative intent of the Act as amended in 2015 and 2019 (providing for expeditious conduction and conclusion of arbitration proceedings), the period of 3 years for filing an application under Section 11 would run contrary to the scheme of the Act.
It noted that since there was no provision prescribing period of limitation for such application, according to various decisions of the Court, Article 137 of the Limitation Act, prescribing 3 years, would apply.
The Court in Bharat Sanchar Nigam Ltd. v. Nortel Networks India Pvt. Ltd. however held that the period of limitation to file an application under Section 11 for appointment of an arbitrator would be 3 years from the date of refusal to appoint the arbitrator, or on expiry of 30 days’, whichever is earlier.
It may be noted that the Apex Court also held that where the claims are ex facie time barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference.