Limitation For Plea-Seeking Arbitrator Appointment Begins From Failure Of Opposite Party To Act On Invocation Notice: J&K&L High Court

The Court was hearing two arbitration petitions filed by a contractor-firm seeking appointment of an arbitrator for disputes arising out of two separate contracts allotted by the Union of India through its department in the years 2006 and 2007. The petitions were filed in November 2025, whereas the petitioner had first invoked the arbitration clause in June 2013. The respondents raised a preliminary objection that the petitions were hopelessly barred by limitation.

The bench of Justice Sanjay Dhar observed,

"Thus, the breaking point, which gives rise to commencement of cause of action in favour of a party approaching the court under Section 11(6) of the Act, is the refusal/neglect on the part of the adverse party or the designated authority to respond to the letter invoking arbitration agreement. The cause of action would start running against the party approaching the court from that date and once it starts running, it would not stop running against the party approaching the court thereafter."

Background:

The petitioner-K.K. Enterprises was allotted two contracts by the respondent-department in 2006 & 07. Both contracts were subsequently cancelled by the respondents in 2012.

According to the petitioner, it had invoked the arbitration clause through communications i. 2024 & 2025 requesting the designated authority to appoint an arbitrator. The petitioner claimed that as many as 14 claims amounting to Rs. 92,88,279.64 arose in the first contract, and 15 claims amounting to Rs. 1,08,90,547.40 arose in the second contract.

The government department contended that the petitioner had previously invoked the arbitration clause through notices dated June 19, 2013 and June 20, 2013, followed by another communication on April 5, 2016. According to the respondents,the limitationn for filing a petition under Section 11(6) started running from thirty days after issuance of the 2013 notices, and the petitions filed in November 2025 were therefore hopelessly time-barred. The respondents also alleged that the petitioner had suppressed material facts regarding the earlier invocation letters.

When the respondents raised the objection of limitation, the petitioner filed applications placing on record subsequent correspondence from the year 2023 and 2024, including a communication dated August 9, 2024 issued by respondent No. 3 asking the petitioner to furnish an undertaking expressing no objection to change in the appointing authority.

Court's Observation:

The Court analyzed the legal position regarding limitation for applications under Section 11(6) of the Act. Referring to the Supreme Court decision in Arif Azim Company Ltd v. Aptech Limited (2024), the Court observed that a petition under Section 11(6) is covered under Article 137 of the Limitation Act, 1963, which prescribes a limitation period of three years from the date when the right to apply accrues.

The court noted that limitation commences only after a valid notice invoking arbitration has been issued and there has been either a failure or refusal on the part of the other party to comply with the requirement of the notice.

It further referred to the Supreme Court judgment in Aslam Ismail Khan Deshmukh v. Asap Fluids Pvt. Ltd. (2025) , which clarified that the referral court must conduct only a limited enquiry to examine whether the Section 11(6) application has been filed within the limitation period of three years.

Examining the facts of the case, the Court noted that the respondents had placed on record communications dated June 19, 2013 and June 20, 2013 addressed by the petitioner to the designated authority praying for reference of disputes to sole arbitration, as well as a communication dated April 5, 2016 reiterating the request. The Court observed that the petitioner had suppressed these communications while filing the petitions, and it was not the petitioner's case that these communications were not addressed by it to the designated authority.

The Court held that the petitioner had invoked the arbitration clause in both cases in June 2013 itself, and the present petitions filed in November 2025 were more than twelve and a half years after such invocation. The Court rejected the petitioner's reliance on subsequent correspondence, noting that the said communication was not addressed by the appointing authority. More importantly, the Court observed that once time for the limitation had started running against the petitioner upon service of the notice of invocation, it would not stop in any circumstances whatsoever.

Referring to Section 9 of the Limitation Act, 1963, which applies to arbitration proceedings, the Court stated that once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it. The Court further held that mere reiteration and repetition of letters invoking the arbitration agreement would not extend the limitation period, and such conduct would not defer the date from which the cause of action arises.

The Court also found that the petitioner was guilty of suppression of material facts, as it had conveniently suppressed the previous invocation of theyearsr 2013 and 2016 to give an impression that the arbitration clause was invoked only in 2024 and 2025. The Court noted that even after the respondents brought these invocation letters to the Court's notice, the petitioner did not amend the petition to explain the circumstances under which the letters were suppressed.

The Court concluded that the petitions were hopelessly barred by time and dismissed both petitions on that ground alone.

For Petitioners: Advocate Anil Mahajan

For Respondent: Advocates Sumant Sudan, Vishal Sharma, DSGI.