Full Judgment
AP No.1327 of 2013 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE NETAI MAITY Versus NEMAI MAITY BEFORE: The Hon'ble JUSTICE SANJIB BANERJEE Date : 10th January, 2014.
Appearance: Mr.P.P.
Mukherjee, Adv..for the petitioner Mr.S.N.
Mitra, Sr.Adv..for the respondent The Court : Two objections are taken on behalf of the respondent to this request under Section 11 of the Arbitration and Conciliation Act, 1996.
The respondent says that the substantive claim of the petitioner is barred by limitation and even the right to go to arbitration is time-barred.
The arbitration clause is contained in a partnership deed executed in the year 1997.
Ordinarily, it would be difficult to sustain an objection of limitation in respect of a claim to go to a reference pursuant to an arbitration agreement contained in a partnership deed.
The petitioner says that though a petition under Section 9 of the 1996 Act was filed before the Howrah Court in the year 2010 and a contemporaneous request made for constitution of the arbitral tribunal, in the petitioner not having taken any steps to have the arbitral tribunal constituted, the petitioner can no longer seek the order that is sought on the present request.
The respondent says that the claims as made in the petition under Section 9 of the 1996 Act, or as evident therefrom, have been substantially reproduced in the letter seeking the appointment of an arbitrator consequent upon which the present request under Section 11 of the Act has been carried to the Chief Justice of this Court or his designate.
There is a distinction between the substantive claim being barred and the right to go to arbitration being barred.
Both the 1940 Act and the 1996 Act recognise the distinction.
As far as the contention as to the substantive claim being barred, it is a matter that ought to be left to the arbitrator as disputed questions of facts arise which cannot be conveniently addressed in couRs.of the present request.
From the letter of September 14, 2013, requesting the constitution of the arbitral tribunal, and the present request, it appears that the petitioner claims that the petitioner has been denied any share of the profits of the partnership firm and the right to participate in the business.
Even if a part of the claim on profits for the period three years prior to the commencement of the present arbitration within the meaning of Section 21 of the 1996 Act is barred, it cannot be said that the petitioner cannot espouse the claim to participate in the business or the claim to a share in the profits for the three years preceding the commencement of the arbitration.
On the basis of the material now carried, the substantive claim of the petitioner does not appear to be barred by limitation; though the issue need not be decided conclusively and may be left for the arbitrator to adjudicate upon.
As to the objection on the ground of the right to arbitration being barred, it must be appreciated that every arbitration agreement is potentially capable of generating innumerable references.
The manner of assessment would be somewhat different depending on the transaction covered by the matrix contract governed by the arbitration clause.
In the present case where the matrix contract is a partnership agreement and where the disputes arise pertaining to the right to participate in the business and the share of profits therein, a subsequent request for a reference may be made notwithstanding steps not being taken pursuant to a previous request invoking the arbitration agreement.
At the highest, such part of the substantive claim of the petitioner as may be attributed to the period prior to three years from the date of commencement of the arbitration may be said to be barred, but the right to go to a reference under an arbitration clause contained in a partnership deed would be difficult to deny on the ground of limitation.
The right to go to arbitration is alive and such issue is decided conclusively.
The extent to which the substantive claim of the petitioner would be admissible in view of the laws of limitation is a matter which is left to be decided by the arbitral tribunal.
Accordingly, AP No.1327 of 2013 is disposed of by appointing Ms.Hasnuhana Chakraborty, Advocate, as the arbitrator to adjudicate upon the disputes between the parties covered by the arbitration agreement.
The arbitrator will be paid a consolidated remuneration of Rs.1 lakh to be shared by the parties in equal measure.
It does not appear, from the kind of claim made by the petitioner, that the arbitration should last any more than four to six weeks after the date of completion of the pleadings.
There will be no order as to costs.
Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) bp.