Delhi HC: Prima Facie Existence of Arbitration Agreement And Arbitrable Dispute Sufficient To Allow Application For Appointment of Arbitrator

Delhi High Court Law Insider

Published on: April 13, 2024 at 11:45 IST

Delhi High Court has emphasized the importance of recognizing the prima facie existence of an arbitration agreement and an arbitrable dispute. The court observed that at the stage of deciding an application for the appointment of an arbitrator under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, hyper-technical questions should not impede the process. Instead, if there is an arbitration clause and an arbitrable dispute, the matter should be referred to the arbitrator.

The Bench of Justice Dinesh Kumar Sharma observed, “The court while deciding such petitions have also to take into account the intention of the legislature behind the enactments. The Arbitration and Conciliation Act has basically been enacted to encourage the settlement of disputes through alternative dispute remedies. The purpose of such an agreement is also to foster confidence amongst the parties that they will stand by their agreements. The Reference Courts at this stage cannot enter hyper-technical questions or the integrities of the same. If on the face of it, there is an agreement which contains the arbitration clause and there is an arbitrable dispute, the matter is required to be referred to the arbitrator.”

The recent case, T.V. Today Network Ltd. v. Home and Soul Pvt. Ltd., saw Advocates Sharukh Ejaz, Nilotpal Bansal, and Farheen Penwale representing the petitioner, while Advocates Alok K. Aggarwal, Anushka Sharma, and Raj Duggal appeared for the respondent.

The respondent contended that the petitioner’s claim was ex facie time-barred. However, the court reiterated that limitation being a mixed question of law and fact must be decided by the arbitrator. It emphasized that if the claim is found to be within the time limit, it should be adjudicated in accordance with the law.

“It is a settled law that limitation is a mixed question of facts and law and the same is required to be adjudicated by the learned Arbitrator,” stated the court. It further elaborated that the arbitrator should frame preliminary questions on the point of limitation and proceed after their decision.

The court clarified the jurisdiction of courts under Section 11 of the Arbitration Act, emphasizing that claims patently barred by limitation cannot be referred to arbitration. Nevertheless, it acknowledged that limitation is a mixed question of fact and law, to be adjudicated based on the facts and circumstances of each case.

Consequently, the Delhi High Court appointed a former high court judge as the Sole Arbitrator in the matter, effectively disposing of the petition and paving the way for the arbitration process to begin.

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