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Judgment
Vipin Sanghi, CJ
1) I have heard learned counsel for the parties.
2) On 25.08.2023, the submission of the respondent that the claim is barred by limitation was taken note of. The said order reads as follows :
“1. Mr. Shobhit Jain and Mr. Pankaj Semwal, learned counsels for the applicant.
Mr. Salvador Rebello, learned counsel for the respondents.
The respondent has filed his counter affidavit, and counsels have also advanced their submissions.
The respondent has raised the issue that the claim of the applicant is clearly barred by limitation, and there is no disputed question of fact required to be determined to determine – whether the claim is barred by limitation, or not.
The agreement between the parties was entered into in the year 2012. The same was terminated on 22.02.2017. The first demand raised by the applicant was on 13.10.2021, i.e., well after the expiry of period of three years from the termination of the agreement.
Whatever right accrued to the applicant crystallized on the date of termination of the agreement, and it is not even stated – as to how cause of action arose on any date after the termination of the agreement.
The respondent sent a reply to the said demand notice on 27.10.2021, denying the claim of the applicant. The applicant thereafter again kept quite and invoked the arbitration agreement only on 12.03.2022. The said notice was again replied to by the respondent on the same day, where after the applicant has preferred this application after expiry of one year of the invocation of the arbitration agreement. Prima facie, it appears that the claim of the applicant is barred by limitation, since arbitration was not invoked within the period of limitation.
Counsel for the applicant seeks one weeks’ time to get ready with his submissions.
At his request, list on 01.09.2023.
It is, however, made clear that no adjournment shall be granted.”
3) Today, learned counsel for the applicant submits that the applicant had terminated the agreement between the parties vide notice dated 22.09.2017, w.e.f. 30.11.2017. Thereafter, the applicant had issued a demand notice on 13.10.2021, raising a demand of Rs.50,10,654/- on the respondent as the outstanding amount due to the applicant. Since the applicant did not comply with the said demand, the applicant had invoked the arbitration agreement on 12.03.2022.
4) Learned counsel submits that since the termination became effective w.e.f. 30.11.2017, the applicant had three year’s limitation to invoke the arbitration agreement from the said date. However, the COVID-19 pandemic intervened in the meantime. The demand notice dated 13.10.2021 was issued by the applicant during the period when the limitation was still in force, and COVID-19 pandemic was raging. The invocation notice was issued on 12.03.2022, when the period of limitation stood suspended, by virtue of the Suo Motu order passed by the Supreme Court in SMW (C) No. 03 of 2020, dated 10.01.2022.
5) Counsel for the applicant has drawn my attention to the order passed by the Supreme Court on 10.01.2022 in the aforesaid proceedings. The supreme Court in those proceedings, inter alia, held that in cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event, the actual balance period of limitation remaining w.e.f. 01.03.2022 is greater than 90 days, that longer period shall apply.
6) Counsel for the applicant points out that within 90 days of 01.03.2022, the applicant had invoked the arbitration agreement vide notice dated 12.03.2022. The respondent has also replied to the said notice on the same day.
7) In the light of the aforesaid, it appears that arbitration commenced on 12.03.2022, which appears to be within the period of limitation. I am, therefore, not satisfied that the present claim is clearly barred by limitation. The respondent neither disputes the agreement between the parties - which contains the arbitration agreement, nor the fact that the respondent has invoked the same, though, it is the claim of the respondent that the same has not been invoked within the period of limitation.
8) Aforesaid being the position, I am inclined to allow the present application. Accordingly, I appoint Mr. K.S. Khurana, retired District Judge, Delhi, Mobile No. 9810257327, to act as the sole Arbitrator to adjudicate all the disputes between the parties arising out of their aforesaid super distributorship agreement dated 15.02.2012. All pleadings are left open to be raised by the parties before the Arbitral Tribunal. The Arbitral Tribunal shall hold the proceedings virtually, except with the consent of the parties, in which case they may appear physically.
9) Arbitration application stands disposed of.