Anselm Joseph D’Souza vs Max Vision Builders & Developers & Ors.

By filing the present Application under Section 11 of the Arbitration and Conciliation Act, 1996, the Applicant seeks appointment of an Arbitrator to decide the disputes which have arisen between the parties.

According to the Applicant, the facts which have led to filing of the present Application are as follows. The Applicant is carrying on business and is a co-owner of the building known as ‘Joe-Liz’, situated at Kohinoor City Road, Kamani, Kurla (West), Mumbai 400070, together with the open land attached to the said property. Respondent No.1 is a Partnership Firm and Respondent Nos.2 and 3 are its partners. The Applicant, being a co-owner of the land situated at Kamani, Kurla (West), Mumbai 400070, desired to develop the said property. For that purpose, the Applicant entered into a Memorandum of Understanding dated 17 February 2012 with the Respondents on the terms and conditions contained therein. Clause 15 of the said Memorandum of Understanding contains an arbitration clause. Thereafter, the parties executed an Agreement of Joint Venture dated 13 April 2012, recording terms which had been agreed between them.

Disputes arose between the parties. The Applicant filed an Arbitration Petition before this Court seeking appointment of an Arbitrator, as the Respondents had not agreed to the appointment proposed by the Applicant in the letter invoking arbitration dated 7 March 2013. By an order dated 4 April 2014, this Court appointed Justice S. K. Shah as the Sole Arbitrator to decide the disputes between the parties. Thereafter, by an order dated 14 January 2020, this Court dismissed the Petition filed by the Applicant seeking extension of time for completion of the arbitration proceedings. It is the case of the Applicant that, on several occasions thereafter, the parties discussed and tried to take the matter forward and attempted to develop the property. However, those efforts did not result in any progress. According to the Applicant, the Respondents neither developed the property nor permitted the Applicant to develop it.

In the changed circumstances, the parties entered into a Memorandum of Understanding dated 6 November 2024, reiterating the terms and conditions contained in the earlier agreements. Disputes arose between the parties in relation to the redevelopment of the property, which is the subject matter of the aforesaid three agreements. The Respondents instituted S.C. Suit No. 2092 of 2025 before the Bombay City Civil Court. According to the Applicant, the said suit was filed contrary to the arbitration clause contained in the agreement. The Applicant has filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 in the said suit, seeking reference of the disputes to arbitration. In these circumstances, differences have arisen between the Applicant on one side and the Respondents on the other. The Applicant invoked the arbitration clause by issuing a Notice dated 27 January 2026 to the Respondents and called upon them to agree to the appointment of Shri Deepak Thakre, Advocate, High Court, Bombay, as the Sole Arbitrator to decide the disputes.

Mr. Vishwakarma, learned Advocate appearing for the Applicant, submits that the disputes which have arisen between the parties are covered by the arbitration clause contained in the agreements executed between them. According to him, the Applicant has rightly invoked the arbitration clause and is entitled to seek appointment of an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.

Mr. Vishwakarma submits that the subsequent Memorandum of Understanding dated 6 November 2024 records the continued understanding between the parties in relation to the redevelopment of the property. According to him, the disputes which have now arisen are required to be referred to arbitration in terms of the arbitration agreement between the parties.

Mr. Dube, learned Advocate appearing for the Respondents, submits that the arbitration proceedings sought to be initiated by the Applicant have been adjudicated upon by this Court. According to him, by an order dated 4 April 2014 passed in Arbitration Petition (L) No. 477 of 2014, this Court had appointed an Arbitrator with the consent of the parties. The Applicant failed to proceed with the arbitration and did not file his claim before the learned Arbitrator in terms of the order dated 4 April 2014. According to the Respondents, the said proceedings were allowed to come to an end due to the Applicant's own failure to take steps. Thereafter, after a lapse of about six years, the Applicant filed an application seeking extension of time to proceed with the arbitration. After hearing both sides, this Court, by its order dated 14 January 2020, refused to extend the time under Section 29-A of the Arbitration and Conciliation Act, 1996 and dismissed Arbitration Petition No. 1554 of 2019.

It is submitted on behalf of the Respondents that the Applicant took no steps or made any effective efforts in relation to the Memorandum of Understanding dated 17 February 2012 until August 2025, when the Respondents instituted S.C. Suit No. 2092 of 2025 before the City Civil Court at Bombay seeking substantive reliefs. The Respondents took out a Notice of Motion in the said suit seeking necessary interim reliefs. The Applicant, who is the Defendant in the said suit, took out a Notice of Motion seeking appointment of an Arbitrator. According to the Respondents, it was only after the Respondents instituted S.C. Suit No. 2092 of 2025 seeking substantive reliefs that the Applicant filed the present Application under Section 11 of the Arbitration and Conciliation Act, 1996. It is submitted that the present Application is an abuse of the process of law and is not maintainable. The Respondents consequently submit that the Application deserves to be rejected with costs. It is submitted that S.C. Suit No. 2092 of 2025 pending before the City Civil Court at Bombay involves substantive reliefs and includes necessary and proper parties who are not signatories to the Memorandum of Understanding. According to the Respondents, the jurisdiction of an Arbitral Tribunal is confined to the parties bound by the arbitration agreement. Therefore, according to them, the disputes cannot be divided and partly decided through arbitration. The Respondents submit that the disputes cannot be effectively resolved without the presence of all necessary parties and that complete and effective adjudication of the subject matter can only take place in the pending Civil Suit.

The Respondents submit that the claims which the Applicant now seeks to refer to arbitration are stale and have become dead claims. According to the Respondents, the claims are barred by limitation under the Limitation Act, 1963. It is submitted that the cause of action had arisen and came to an end with the order dated 14 January 2020, by which this Court refused to extend the time for proceeding with the arbitration before the Arbitrator appointed by the order dated 4 April 2014. According to the Respondents, the present Application has been filed beyond the permissible period of limitation and is liable to be rejected.

I have considered the submissions made by Mr. Vishwakarma, learned Advocate for the Applicant, and Mr. Dube, learned Advocate for the Respondents.

The main submission of the Respondents is that the earlier arbitration had come to an end and that the Applicant is now trying to start the same arbitration once again. According to the Respondents, the claims are very old and are barred by limitation. It is submitted that S.C. Suit No.2092 of 2025 is pending before the City Civil Court and some persons joined in that suit are not parties to the arbitration agreement. According to the Respondents, because of this, the whole dispute cannot be decided by an Arbitral Tribunal.

The first question which arises is whether there is an arbitration agreement between the parties. The Agreement of Joint Venture dated 13 April 2012 contains an arbitration clause. Clause 15 provides that if any dispute or difference arises regarding performance of the agreement or any issue arising from the agreement, the parties would first try to settle the matter by mutual discussion and conciliation. If such attempt failed, the dispute was to be referred to arbitration. The parties had acted upon this clause. The Applicant had invoked arbitration and this Court, by order dated 4 April 2014, appointed Justice S. K. Shah as the Sole Arbitrator. Therefore, from the material before the Court, there is no serious dispute that an arbitration agreement exists between the Applicant and the Respondents.

The next question is what is the effect of the earlier appointment of the Arbitrator and the order dated 14 January 2020 by which extension of time was refused. The submission of the Respondents that the Applicant did not proceed with the earlier arbitration with proper speed has some substance. The material shows that the Arbitrator was appointed on 4 April 2014. However, the arbitration did not reach an award. Thereafter, the Applicant sought extension of time and that application was dismissed on 14 January 2020. Therefore, so far as the earlier arbitration before Justice S. K. Shah is concerned, the order dated 14 January 2020 cannot be ignored. It has to be given its proper effect. At the same time, dismissal of the application for extension of time cannot be treated as a decision upon the disputes between the parties. At that stage, the question before the Court was only whether the time for completing the earlier arbitration should be extended. The Court was not deciding that the Applicant had no rights against the Respondents. This difference becomes important because the Applicant is relying upon a subsequent Memorandum of Understanding dated 6 November 2024.

The Respondents submit that the present Application is only another attempt to start the same arbitration which had come to an end and that such an attempt should not be permitted. This submission cannot be accepted in such a broad manner. There is a difference between the mandate of an Arbitrator coming to an end and every dispute or future right of the parties under the contract coming to an end. This Court, in Nalin Vallabhbhai Patel v. Atharva Realtors, 2026:BHC-OS:7780, has considered the effect of refusal to extend the mandate under Section 29A. The Court held that what ordinarily comes to an end under Section 29A(4) is the mandate of the Arbitrator. It does not mean that the arbitration agreement comes to an end or that every future dispute arising under the contract can no longer be referred to arbitration. The effect may depend upon the facts of the particular case and the reason for which extension was refused.

There is one important fact in the present case which cannot be ignored. After the order dated 14 January 2020, the parties were not in the same position in which they were in the year 2012. According to the Applicant, discussions continued between the parties and a Memorandum of Understanding dated 6 November 2024 was executed. The Applicant says that the said MOU again recorded the terms and conditions of the earlier agreements and that the Respondents did not act according to the said MOU. Therefore, the Applicant is not relying only upon the old dispute arising from the agreements of 2012. The Applicant is relying upon the later understanding recorded on 6 November 2024 and the disputes which, according to the Applicant, arose because the Respondents did not act according to that understanding.

In my view, this subsequent event is an important circumstance. If there was no MOU dated 6 November 2024, the submission of the Respondents that the Applicant was only trying to revive the old arbitration would have had greater force. But when the same parties entered into another MOU, that document cannot be ignored because an earlier arbitration had not reached its conclusion. The nature of the present dispute has to be considered in the background of the later MOU.

The judgment of the Supreme Court in State of West Bengal and Others v. B.B.M. Enterprises, 2026 SCC OnLine SC 980 deals with old and stale claims. In paragraph 3, the Supreme Court considered the judgment in Vishram Varu and Company v. Union of India and observed that where the claim had arisen many years earlier, a later notice invoking arbitration cannot by create a fresh cause of action. The Court observed that “the mere issuance of a notice in 2018 cannot enable the party to contend that the cause of action arose in the year 2018, after expiry of 32 years.” 18. The Supreme Court held in paragraph 4 of the said judgment that the limitation applicable to the substantive claim and the limitation applicable to an application under Section 11(6) are two different matters. Article 137 applies to an application under Section 11(6). The Supreme Court referred to paragraph 68 of Arif Azim Company Limited v. Aptech Limited, which reads as follows:

Paragraph 5 of State of West Bengal is important. The Supreme Court made it clear that the limitation period for filing a Section 11 application is different from the limitation applicable to the substantive claim arising under the contract. At the same time, if a claim is clearly and hopelessly barred by limitation, the Court is not required to refer such a dead claim to arbitration merely because an arbitration clause exists. The Supreme Court has held that where the basic pleadings themselves show that the claim is clearly barred, the Referral Court can consider that aspect. However, the Court should not conduct a detailed examination of evidence for deciding limitation at the Section 11 stage.

The facts in State of West Bengal are different from the facts in the present case. In that matter, the work was completed on 30 July 2000 and the first notice seeking commencement of arbitration was issued only on 2 June 2022. There was no subsequent agreement between the parties which was relied upon for saying that a fresh dispute had arisen. There was a long and unheld gap of about 21 years. The Supreme Court held in paragraph 5 that the claimant had “slept over its claim for 21 years” and that it was “an ex-facie dead claim.”

The position in the present case is different in some important respects. The Applicant had invoked arbitration in 2013 and an Arbitrator was appointed by this Court on 4 April 2014. Therefore, it cannot be said that the Applicant remained inactive from the beginning. The parties entered into another MOU dated 6 November 2024. The present notice invoking arbitration is dated 27 January 2026. Therefore, if the disputes now sought to be referred relate to the obligations recorded or continued under the MOU dated 6 November 2024 and the alleged failure of the Respondents after that date, such disputes cannot straightaway be placed in the same category as a claim which was raised for the first time after 21 or 32 years without any intervening agreement or other event.

I do not accept the submission of the Respondents that the order dated 14 January 2020, by, makes every later dispute between the parties dead and barred by limitation. The order dated 14 January 2020 certainly brought the earlier proceedings for extension of the arbitration to an end. But from the material before the Court, that order did not decide what effect the subsequent MOU dated 6 November 2024 would have. A dispute arising from an alleged failure to comply with a later agreement cannot be treated as the same cause of action which had come to an end in January 2020.

Another important principle is found in Aslam Ismail Khan Deshmukh v. ASAP Fluids Private Limited (2025) 1 SCC 502 . The Supreme Court has held that the limitation applicable to a Section 11 application is different from the limitation applicable to the substantive claim under the contract. The Court has held that, at the Section 11 stage, the Referral Court should make only a limited examination and should not conduct a detailed examination of evidence regarding limitation. Ordinarily, the question of limitation of the substantive claim is to be considered by the Arbitral Tribunal unless the claim is hopelessly barred on the face of the record.

In the present case, the Applicant issued the notice dated 27 January 2026 invoking arbitration and proposed the appointment of Shri Deepak Thakre, Advocate, as the Sole Arbitrator. The main objection of the Respondents is that the claims themselves are barred by limitation. That objection cannot be decided merely by looking at the year 2020. The pleadings themselves refer to the MOU dated 6 November 2024 and the alleged failure of the Respondents to act according to that MOU. That subsequent event has to be considered while examining the objection based on limitation.

The Respondents submit that the MOU dated 6 November 2024 only repeats the earlier terms and cannot give a new life to the old claims. This submission, by, is not sufficient. Even if the later MOU repeats some or all of the earlier terms, the Court has to consider why the parties executed that document and what exactly they agreed under it. If the parties in 2024 consciously recorded that their earlier arrangement would continue and the Applicant says that the Respondents failed to perform the obligations so recorded, that dispute cannot at the initial stage be rejected only by saying that the original transaction was of the year 2012.

Whether the MOU dated 6 November 2024 created a fresh arrangement, or merely confirmed the rights and obligations which were existing, or continued the earlier arrangement, has to be understood from the document and the pleadings. At this stage, the said MOU cannot be treated as having no legal relevance.

The Respondents have submitted that the filing of S.C. Suit No.2092 of 2025 before the City Civil Court shows that the present Application is an abuse of the process of law. This submission cannot be accepted merely because the civil suit has been filed. The Applicant has stated that it has filed an application under Section 8 of the Arbitration and Conciliation Act in that suit and has sought reference of the disputes to arbitration. Filing of a civil suit by one party does not by bring an existing arbitration agreement to an end. The nature of the disputes and the reliefs claimed in the suit have to be examined.

The Respondents have pointed out that there are third parties in the civil suit who are not signatories to the arbitration agreement. This aspect certainly requires consideration. An Arbitral Tribunal gets its jurisdiction from the arbitration agreement and ordinarily cannot pass an award against a person who is not bound by that agreement. But merely because a civil suit contains some additional parties does not necessarily mean that every dispute between the parties who are signatories to the arbitration agreement becomes incapable of arbitration.

The real question is whether the disputes which the Applicant seeks to refer are disputes between the Applicant and the Respondents arising from their relationship and whether those disputes can be decided without granting any relief against persons who are not parties to the arbitration agreement. This has to be considered with reference to the prayers and the nature of the reliefs claimed.

On the material available, the Applicant is seeking adjudication of disputes between and Respondent Nos.1 to 3, who are parties to the arrangement. Nothing has been shown to the Court to establish that the arbitration clause has been deleted, cancelled or expressly given up by the parties. The Respondents mainly rely upon the earlier arbitration, the question of limitation and the pendency of the civil suit. These circumstances, taken separately or together, do not establish that the arbitration agreement between the parties has ceased to exist.

I find that there is substance in the submission of the Respondents that the Applicant was not diligent in taking the earlier arbitration to its conclusion. The material shows that the Arbitrator was appointed in 2014, that the arbitration did not result in an award and that the Applicant sought extension of time. Therefore, the Applicant cannot say that there was no delay on its part. But the consequence of that delay had been considered when this Court refused to extend the earlier arbitral proceedings by its order dated 14 January 2020. That delay cannot, without something more, destroy every right which may have arisen between the parties thereafter.

The principle stated by the Supreme Court in State of West Bengal is that a party cannot take a dead claim and give it a new appearance merely by issuing a fresh notice invoking arbitration. This principle would certainly apply where nothing happened between the parties for many years and only a later notice is relied upon to say that a new cause of action has arisen. But the same principle cannot mean that when the parties enter into another agreement, no dispute arising from that subsequent agreement can ever be referred to arbitration. Paragraph 6 of State of West Bengal states that arbitration is an alternate method of dispute resolution which should be encouraged. At the same time, the basic principle remains that “law favours the diligent and not the indolent”. The Supreme Court considered the period of limitation applicable to the claim in that case and the commencement of arbitration under Section 21.

In the present matter, the Applicant is not relying only upon the notice dated 27 January 2026 to convert an old and barred claim into a fresh claim. The Applicant relies upon the intervening MOU dated 6 November 2024 and the alleged breaches after that MOU. That subsequent event is relevant while considering the question of limitation.

Paragraph 7 of State of West Bengal shows that where the claimant was of the view that the Engineer-in-Charge had failed to determine the amount payable, it was for the claimant to take appropriate steps at that time. The Supreme Court did not permit an unheld delay of 21 years. The facts here are different. The Applicant had taken steps in 2013. An Arbitrator was appointed in 2014. The earlier proceedings came to an end in the context of Section 29A in 2020. Thereafter, the parties entered into the MOU dated 6 November 2024. The Applicant issued the present notice in January 2026. Therefore, from the material before the Court, the facts necessary to hold that the present claim is an ex-facie dead claim are not established.

The Respondents have submitted that if the present Application is allowed, it would in effect amount to reviewing or cancelling the order dated 14 January 2020. I do not find this submission correct. The Applicant is not asking this Court to extend the time of the earlier arbitration before Justice S. K. Shah. The Applicant is not asking this Court to change or reconsider the order dated 14 January 2020. What is sought now is appointment of an Arbitrator in relation to the disputes which are pleaded on the basis of the subsequent MOU dated 6 November 2024. These are two different matters. At the same time, the present reference cannot be understood as giving the Applicant an unlimited right to reopen every claim arising from the original agreements of 2012. If the Applicant seeks to revive claims which had become barred and which were part of the earlier arbitration alone, the principles stated in State of West Bengal, Arif Azim and Aslam Ismail Khan Deshmukh will apply. A fresh application under Section 11 cannot bring back a substantive claim which had become dead. The present reference, therefore, has to be understood with reference to the disputes which the Applicant says arose from the MOU dated 6 November 2024 and the alleged failure to perform the obligations recorded therein.

The objection regarding the pending civil suit cannot by result in dismissal of the present Section 11 Application. The Applicant has invoked Section 8 in the said suit. Whether all the reliefs claimed in the suit are capable of being referred to arbitration, whether any particular relief requires the presence of a non-signatory, and whether any part of the suit has to continue before the Civil Court are matters which have to be considered with reference to the pleadings, parties, and prayers in that suit. The mere fact that the suit is pending does not mean that there is no arbitrable dispute between the present parties.

For these reasons, I am of the view that the present Application cannot be rejected merely because an Arbitrator had been appointed earlier in 2014 and extension of the earlier arbitration was refused in 2020. It cannot be rejected merely because S.C. Suit No.2092 of 2025 is pending before the City Civil Court. The MOU dated 6 November 2024 is an important subsequent event. It gives the present dispute a different factual background. Therefore, the objection of the Respondents that the entire claim made by the Applicant is stale, dead and barred by limitation is not established from the material before the Court.

In the aforesaid circumstances, the present Application under Section 11 of the Act, is deserved to be disposed of in terms of the following order:

All issues on merits are expressly kept open to be agitated before the arbitral tribunal appointed hereby.

All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on this Court’s website.