Arbitration Case No.74 of 2006 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No.74 of 2006 Decided on : 30-01-2009 M/s Dham Engineering Corporation ....Petitioner VERSUS Indian Oil Corporation Ltd. & another ....Respondents CORAM:-HON'BLE MR. JUSTICE HEMANT GUPTA. Present:- Mr. C.S. Pasricha, Advocate for the petitioner. Mr. Harminderjit Singh, Advocate for respondents. HEMANT GUPTA, J The present petition is for appointment of an Arbitrator in terms of the agreement dated 01.02.1996, which was in respect of internal haulage contract for the period 1.2.1996 to 31.01.1999. It is averred that an amount of Rs.20 lakhs approximately, have not been paid to the petitioner, therefore, the petitioner has invoked the arbitration by the named Arbitrator i.e. General Manager, Indian Oil Corporation, New Delhi vide communication dated 25.03.2001 in terms of the said contract. The petitioner invoked the jurisdiction of District Judge, Ambala, under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment of an Arbitrator vide application dated 27.04.2005 since the Arbitrator named in the agreement, has not taken cognizance of the dispute. The said matter was transferred to this Court after the judgment of Hon'ble Supreme Court in M/s SBP & Co. Vs. M/s Patel Engineering Ltd. & Another, J.T. 2005 (9) SC-219. Arbitration Case No.74 of 2006 -2- The dispute alleged to have arisen between the parties is required to be decided by an Arbitrator in terms of the Clause 16 of the contract agreement, which reads as under:- “In case of any dispute or difference arising out of this agreement the matter shall be referred to the sole arbitration of the General Manager, Indian Oil Corporation Ltd., (Marketing Division) New Delhi whose decision shall be final and binding on the contractor/s. The Contractor/s has/have agreed to this reference knowing full well that the Arbitrator so agreed to this is the manager of the corporation and it shall not be opened to him/them to challenge the reference and award on this ground.” Learned counsel for the respondent has argued that the communication dated 25.03.2001 was never received by the respondents, therefore, in absence of receipt of the said letter, it cannot be said that the named Arbitrator was required to take cognizance of the dispute. Alternatively, it was contended that even if such letter was written by the petitioner, still the petitioner has failed to invoke the jurisdiction for appointment of an Arbitrator within 3 years of the date on which cause of action arose to the petitioner i.e. on account of the failure of the respondents to appoint an Arbitrator as a consequence to letter dated 25.03.2001. It is the case of the petitioner that there is no period of limitation for invoking the jurisdiction of this Court for appointment of an Arbitrator under Section 11(6) of the Act as the petitioner has already invoked the jurisdiction of the Arbitrator vide letter dated 25.03.2001 sent on 9.4.2001. Arbitration Case No.74 of 2006 -3- The petitioner has sought cognizance of the dispute by the named Arbitrator vide communication dated 25.3.2001. The respondents have not responded to such communication. Therefore, on refusal or inaction of the respondents in not taking cognizance of dispute, the cause of action arose to the petitioner. In terms of Article 137 of the Schedule-I to the Limitation Act, 1963, an application for which limitation is not prescribed specifically is required to be filed within three years from the date the cause of action arises to the petitioner. The present petition has been filed on 27.4.2005 i.e. much after the letter dated 25.3.2001 was allegedly sent by the petitioner. Therefore, even as per the case set up by the petitioner, the present petition is barred by limitation. The argument that once notice has been sent for appointment of an Arbitrator, the limitation will not begin to run, is misconceived. The cause of action to seek appointment of an Arbitrator through the process of the Court arose to the petitioner on account of inaction of the named Arbitrator to take cognizance of the dispute. Therefore, the invokation of the jurisdiction of this Court to seek appointment of an Arbitrator by way of the present petition is beyond the period prescribed in law. Consequently, the present petition is dismissed being barred by limitation. (Hemant Gupta) Judge 30th January, 2009. monika/ds