The Delhi High Court has held that the provision for filing written statements under section 8 of the Arbitration and Conciliation Act is governed by the law of limitation.
The Single Bench of Justice Prathiba M Singh has ruled that the period of limitation provided for filing written statements in CPC and Commercial Courts Act, 2015, would also apply to written statements filed under section 8 of the Arbitration and Conciliation Act.
The present ruling has come in a case where maintainability an application under section 8 of the Arbitration & Conciliation Act was a disputed issue.
The Petitioners argued that a Section 8 application, seeking the dispute between both the parties to be referred up arbitration, is maintainable as it was filed prior to filing of any other substantive defence by the Petitioners.
On the other hand, the Defendants argued that no arbitrable dispute exists between the parties as the period of limitation for filing of the Section 8 application has expired.
In the present suit, the court was faced with the following question of law:
Senior Counsel Darpan Wadhwa, who was appointed as an Amicus in the case, submitted before the court that there is a divergence of opinion on whether the time limit for filing the written statement would apply for filing of Section 8 application.
He further highlighted that Supreme Court in Booz Allen case had held that there is no such time limit, but the application must be filed `at the earliest'.
While analysing the submissions, the court observed at the outset that the difference in the language to the extent it is different, for the purpose of this case, is on the phrase "not later than when submitting" and "not later than the date of submitting".
The court also observed that Article 8 of UNCITRAL Model Law was followed in the un-amended Section 8. However, in the amended Section 8, there is a departure. In the un-amended
Section 8, it is also settled that the objections as to Section 8 could be contained in the written statement itself and it is also settled that a Section 8 application could be moved along with the written statement itself.
Therefore, the moot question before the court was, whether the adding of the words 'the date of' in the amended section 8 means that the date for filing a written statement in a suit would be considered as the limitation period for filing of a Section 8 application.
The court answered that question in affirmative by noting that:
'Viewed in the background of the amendments in the CPC including the recent amendments in CPC in the context of the Commercial Courts Act, 2015 and the amendments in the Arbitration Act, 2016, this Court concludes that the amendment is a conscious step towards prescribing a limitation period for filing the Section 8 application.'
It is further highlighted by the court that The mention of the word "date" in the amended provision means that it is a precise date and usually incapable of ambiguity. The same is a crystalized date and not a 'period' prior to the filing of the first statement on the substance of the dispute. It says:
'The entire intention is that those parties who wish to proceed for arbitration ought to do so with alacrity and speed and not merely procrastinate.'
The court, therefore, dismissed Petitioner's application under section 8 of the Arbitration and Conciliation Act by saying :
"The Defendant cannot defeat the intention behind the amendments in the Civil Procedure Code and the Arbitration Act, by choosing to file a Section 8 application at its own sweet will".
Click here to download the Judgment