22 May 2024 Arbitration >> Corporate Law   |   Contract Law >> Corporate Law  

A recent court case involved a dispute over an unpaid balance arising from a contract. The petitioner, who had completed the work under the contract, argued they were owed an additional sum. The respondent, however, maintained they had already paid the full amount.

The petitioner was awarded a tender by the respondent in 2012. After completing the work, the petitioner claimed they were owed Rs. 50,39,134 more than what they had received. Unable to resolve the matter amicably, the petitioner issued a legal notice in 2014 followed by a notice invoking arbitration.

The case went through several rounds of arbitration. Initially, an arbitrator awarded a sum close to what the parties had negotiated as a settlement, though the settlement never materialized. The petitioner challenged this award, and it was subsequently set aside by the court in 2018.

Following the court order setting aside the initial award, the petitioner waited over five years before filing a new petition to appoint a fresh arbitrator. The respondent argued that this latest petition was barred by limitation, meaning it had been filed outside the permissible timeframe.

The court agreed with the respondent. While the Limitation Act allows for excluding the period between the commencement of arbitration and the date the award is set aside, the court found the petitioner had not acted with due diligence. The significant delay in filing the new petition after the previous award was set aside was deemed unreasonable.

The court further noted that the petitioner had already received the full amount awarded by the arbitrator, including some additional money. This detail emerged during the hearing when the petitioner conceded they had received the entire principal sum but were only contesting the lack of interest payment.

Taking into account both the limitation issue and the fact that the petitioner had already received the full amount owed, the court dismissed the petition to appoint a new arbitrator.

  Arbitration and Conciliation Act, 1996    Limitation Act, 1963