Limitation Period U/S. 11 Of Arbitration Act Begins Only Upon Valid Invocation Notice: Madras High Court

The Madras High Court has reiterated that the limitation period for filing a petition under Section 11 of the Act can commence only when a valid notice invoking arbitration has been sent by the petitioner to the respondents.

The Single Bench of Justice Abdul Quddhose also ruled that once a party nominates an arbitrator in response to a notice issued under Section 21 of the Arbitration and Conciliation Act, 1996, it cannot later challenge the claim as time-barred in a petition under Section 11 of the Act.

The Bench while allowing a petition seeking the appointment of an arbitrator, observed that the respondent, having appointed an arbitrator upon receiving the arbitration invocation notice, could not subsequently argue that the petitioner's claim was barred by limitation.

"Once this Court is prima-facie satisfied that there exists an arbitration clause in the contract, which is the subject matter of the dispute raised by the petitioner, and the petitioner having complied with the statutory requirement of issuing notice as per the provisions of Section 21 of the Act, this Court will have to necessarily appoint an Arbitrator when there is no consensus between the parties with regard to the name of the Arbitrator. The petitioner has also satisfied the requirements of Section 21 of the Act, which stipulates that a mere request has to be made to the respondent for arbitration and nothing more is mandated. Therefore, the contention of the learned counsel for the respondent that a valid notice as per Section 21 of the Act was not sent by the petitioner has to be rejected by this Court," the Court observed.

Background of the Case

The dispute arose out of a water supply agreement dated July 25, 2013, under which the petitioner was required to supply desalinated water to the respondent. The petitioner alleged that the respondent had breached the contract and failed to pay certain dues. The agreement contained an arbitration clause, leading the petitioner to invoke arbitration on September 10, 2024, before filing the present petition under Section 11 of the Arbitration Act.

The respondent contended that the claim was barred by limitation, arguing that the contract expired on December 31, 2015, while arbitration was initiated only in 2024. It was also claimed that the arbitration notice pertained only to other contracts, including a subsequent agreement dated October 1, 2014.

Court's Observations

The High Court reiterated that, in deciding a Section 11 petition, the referral court must only determine the prima facie existence of an arbitration clause. Since the contract dated July 25, 2013, contained an arbitration clause, and the petitioner had raised disputes under it, the matter had to be referred to arbitration.

The Single Judge noted that the petitioner’s arbitration notice explicitly referenced the 2013 contract, satisfying the requirements of Section 21 of the Arbitration Act. The Court further clarified that the limitation period commenced from the date of arbitration invocation (September 10, 2024) and that the present petition, filed within three years from that date, was within the limitation period.

Citing the Supreme Court’s ruling in SBI General Insurance Co. Ltd. v. Krish Spinning (2024), the Court held that the respondent could not raise a limitation defense after appointing an arbitrator in response to the notice. Accordingly, the petition was allowed, and an arbitrator was appointed.

Cause Title: South Ganga Waters Technologies (P) Ltd., Rep. By its Authorized Signatory Mr. Vijay Ramesh, Chennai v. Vedanta Limited [Neutral Citation No. 2025:MHC:574]

Appearance:-

Petitioner: Advocate Anirudh Krishnan

Respondent: Advocate Rahul Balaji

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