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Srinivasan, J.—The only question which arises for consideration is whether the reference to arbitration is as per Clause 46 of the agreement
between the parties. First respondent requested the appellant to appoint an Arbitrator by letter dated 29.4.1992. An Arbitrator took the view that
it was barred by limitation as Clause 46 of the agreement provided for a period of three months for reference. Challenging the said opinion of the
Arbitrator an application was filed on the original side and the learned single Judge has reversed the order of the Arbitrator. Learned single Judge
has found that the reference to arbitration has commenced when the first respondent wrote to appellant to nominate an Arbitrator on 24.9.1992. In
this connection learned Judge has placed reliance on the judgment in New Agrex S.A. v. Baltic shipping Co. Ltd. and Intershipping Charter Co.
(1976 (2) L LR 47).
Clause 46 of the agreement between the parties to the extent to which it is relevant reads as follows:
....... the dispute shall be referred to Arbitration by the Arbitrator/or Arbitrators, appointed by the Authority provided that no reference shall be
made to arbitration after the expiry of three months from the date on which the dispute arose, the said date being reckoned as the date on which
claim was rejected by the Employer and if no reference to arbitration has been made within such period, any claim before any authority whatsoever
in respect of any dispute under the Agreement shall be deemed to have been totally waived and shall cause absolutely for ever.
In Nea Agrex S.A. v. Baltic Shipping Co. Ltd. and Intershipping Charter Co. (1976 (2) L L R 47) Lord Denning, M.R. said,
Article III, Rule (6) It follows, therefore, that there is incorporated into this charter-party the time bar clause under which the ship owners are
discharged from all liability ""unless suit is brought with one year after delivery of the goods.
It has been held in this Court that the clause applies to an arbitration as well as to a suit in a Court of law, see The Merak, (1964) 2 LR. 527 :
(1965) P.223; and I am not disposed to question this. But that case leaves open the question: at what time is a suit brought? so far as the courts of
law are concerned, there is no difficulty. The suit is ""brought"" at the time when the writ is issued, even though it is not served on the defendant until
some time later. But, so far as arbitrations are concerned, there is more difficulty. I do not know of any authority which tells us when an arbitration
is commenced; nor of any statute save the Limitation Act, 1939, Section 27(2). Both parties agreed before us that that action should be applied by
analogy in applying Art. III, Rule 6. It says (so far as material) that:
.... an arbitration shall be deemed to have commenced when one party to the arbitration serves on the other party or parties a notice requiring him
or them to appoint an arbitrator or agree to the appointment of an arbitrator.
Section 37(3) of the Arbitration Act is in the following terms:
For the purposes of this section and of the Indian Limitation Act, 1908(9 of 1908), an arbitration shall be deemed to be commenced when one
party to the arbitration agreement serves on the other parties thereto a notice requiring the appointment of an arbitrator, or where the arbitration
agreement provides that the reference shall be to a person named or designated requiring that the difference be submitted to the person so named
or designated.
In the light of the provisions of Section 37(3) of the Act if we look into the terms of the agreement in Clause 46 it is clear that the parties intended
only that arbitration is to commence within three months from the date on which the dispute arose. In this case, the dispute arose on 4.3.1992
when the claim of the first respondent was rejected by the appellant. Within a month from thereafter the first respondent has prayed for nomination
of the arbitrator by the appellant, in view of the fact, mat the agreement does not name the Arbitrator. Hence, we have no hesitation to hold that
the reference to arbitration has been made within a period of three months as contemplated by Clause 46 of the agreement.
In the result, we agree with the view expressed by the learned Judge and dismiss the appeal.