Mere Exchange Of Letters Cannot Extend Limitation For Plea For Appointment Of Arbitrator: Kerala High Court

The Kerala High Court on Tuesday held that mere exchange of letters or representations between parties cannot extend the limitation period for filing an application seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Justice S. Manu observed that once limitation begins to run, recurrent communications between parties cannot stop or stretch the statutory period.

“If a party waits indefinitely, without seeking reference by approaching the Court under S.11 of the Act, even after the 'breaking point', it cannot be permitted to justify the delay citing repeated communications with the opposite party,” it held.

The court made the observation while dismissing an arbitration request filed by Beautiful Properties Pvt. Ltd. against the Airports Authority of India (AAI) seeking appointment of an arbitrator.

The dispute arose from a licence agreement between AAI and NL Forex Ltd., which operated a money exchange counter at Trivandrum International Airport. In 2011, AAI alleged that NL Forex had occupied 1.70 sq. m. in excess of the allotted space and raised a demand of ₹8.81 lakh towards additional charges, which NL Forex disputed.

NL Forex invoked the arbitration clause in April 2012 seeking the appointment of an arbitrator. In 2013, AAI informed the company that, under its policy guidelines, the disputed amount had to be deposited before the matter could be referred to arbitration. Although AAI repeatedly stated that the appointment of an arbitrator was under consideration, no arbitrator was appointed.

Following NL Forex's amalgamation with Beautiful Properties Pvt. Ltd., the petitioner again sought appointment of an arbitrator in 2025. As no arbitrator was appointed, it approached the High Court under Section 11 of the Arbitration Act.

AAI opposed the plea, contending that its request for appointment of an arbitrator was received on April 23, 2012, and, after expiry of the statutory 30-day period for making the appointment, the petitioner had only three years to approach the Court.

Since the petition was filed only on July 2, 2025, AAI argued that the arbitration request was time-barred and that the underlying claims were "hopelessly time barred."

The petitioner, on the other hand, contended that under the arbitration agreement, AAI was obligated to nominate the arbitrator and had repeatedly represented that the matter was under consideration.

Accepting AAI's limitation objection after examining the rival submissions and applicable Supreme Court precedents, the Court reiterated that the limitation period for filing an application under Section 11 begins after expiry of 30 days from receipt of the request for appointment of an arbitrator.

It noted that since the request was received on April 23, 2012, the limitation period expired on May 21, 2015, whereas the petition was filed only on July 2, 2025.

Relying on precedents, the court observed,“...it is settled beyond any uncertainty that once the period of limitation starts running, it cannot be extended by recurrent communications between the parties. Such communications cannot stop ticking of clock. Neither can they help to stretch the period of limitation.”

The Court further observed that although AAI's conduct in repeatedly stating that the matter was under consideration was not appreciable, such conduct could not override the statutory limitation.

“If it was vigilant and diligent, the petitioner should have approached this Court before the expiry of the period of limitation. The petitioner ought to have noticed that the remedy of approaching this Court under Section 11 of the Act would ordinarily become unavailable upon the expiry of the period of three years,” it noted.

Holding the arbitration request to be time-barred, the Court dismissed the petition while leaving the other contentions of the parties open.

For Petitioner: Advocate G Sreekumar (Chelur)

For Respondent: Advocate V Santharam