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1996 DIGILAW 23 (MAD)

M. M. D. A. reb. by its S. E. Construction Wing Circle II, etc. . . Appellant v. National Buildings Constructions Corporation Ltd & another

1996-01-09

ABDUL WAHAB, SRINIVASAN

body1996
Judgment :- Srinivasan, J. 1. 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 24. 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 29. 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) Lloyd’s Law Reports 47). 2. 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) Lloyd’s Law Reports 47) Lord Denning, M.R.said, “Article III, R. (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 Lloyd’s Rep. 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. 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, S.27(2). Both parties agreed before us that that action should be applied by analogy in applying Art.III, R.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.” 3. 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 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, that 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. 4. In the result, we agree with the view expressed by the learned Judge and dismiss the appeal.