SC asks Parliament to bring period of limitation for arbitrator appointment

The court also pointed out various amendments to the Act have been made over the years so as to ensure that arbitration proceedings are conducted and concluded expeditiously.

New Delhi: The Supreme Court has suggested Parliament to bring in an amendment to the Arbitration and Conciliation Act, 1996 prescribing a specific period of limitation within which a party may move the court for making an application for appointment of arbitrators.

A bench of Chief Justice of India D Y Chandrachud and Justices J B Pardiwala and Manoj Misra pointed out that in many other matters, it has been observed that the Limitation Act has to be applied as "a result of legislative vacuum as there is no statutory prescription regarding the time limit". 

"We would again like to reiterate that the period of three years (under Section 137 of the Limitation Act) is an unduly long period and goes against the very spirit of the Arbitration Act, which provides for expeditious resolution of commercial disputes within a time-bound manner," the bench said.

The court also pointed out various amendments to the Arbitration and Conciliation Act, 1996 have been made over the years so as to ensure that arbitration proceedings are conducted and concluded expeditiously.

The court made the suggestion to Parliament for amendment while hearing a plea by an Afghanistan based company M/s Arif Azim Co Ltd for the appointment of an arbitrator for the adjudication of disputes and claims arising out its contract of March 21, 2013 entered with Mumbai based M/s Aptech Ltd.

The bench picked up Justice Sanjay Kishan Kaul, former Judge of the Supreme Court, to act as the sole arbitrator in the disputes, including on payment of money.

In the case, the bench said it cannot be said that the claims sought to be raised by the petitioner are ex-facie time-barred or dead claims on the date of the commencement of arbitration.