Delhi High Court
Triveni Pattern Glass Ltd vs Triveni Glass Ltd & Anr on 24 July, 2025
Author: Jyoti Singh
Bench: Jyoti Singh
$~96
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 24th July, 2025
+ ARB.P. 442/2025
TRIVENI PATTERN GLASS LTD .....Petitioner
Through: Mr. Mukul Gupta, Senior Advocate
with Mr. Vibhor Garg, Mr. Sumit Mishra and Ms.
Diksha Kakkar, Advocates.
versus
TRIVENI GLASS LTD & ORS. .....Respondents
Through: Mr. Omar Ahmad, Mr. Vikram Shah,
Mr. Ishan Gaur, Mr. Simranjeet and Mr. Ritik
Kumar Rath, Advocates for R-1.
Mr. Arjun Pall, Advocate for R-2.
Mr. Tushar Gupta, Advocate for R-3.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J. (ORAL)
1. This petition is filed on behalf of the Petitioner under Section 11(6) of
the Arbitration and Conciliation Act, 1996 (‘1996 Act’) for appointment of a
sole Arbitrator to adjudicate the inter se disputes between the parties.
2. Facts to the extent relevant and as averred in the petition are that a
Business Transfer Agreement (‘BTA’) was executed between Respondent
No. 1 and Navilan Merchants Pvt. Ltd. (‘NMPL’) on 29.03.2019 for sale and
transfer of fully operative and functional glass manufacturing and processing
Plant located at Kondagudem, West Godawari District, Rajamundry,
Andhra Pradesh, as a going concern on ‘as is where is basis’ in terms of the
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 1 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
said BTA along with all current stocks, inventory etc., in the said Plant.
Respondent No. 2, the Managing Director of Respondent No. 1, stood as
personal guarantor as stated in Article 9.7 of BTA and also executed the
BTA on behalf of Respondent No. 1. Parties to the BTA agreed that they
will endeavour to ensure that there is no disruption of services, supplies etc.
from the date of execution of BTA till closure on 31.08.2019, which date
was extended till 30.11.2019 by subsequent Addendums to the BTA.
3. It is averred by the Petitioner that effective from 01.04.2019, all
operations of the Plant including raw material and stock were transferred in
favour of NMPL i.e. predecessor-in-interest of the Petitioner and all benefits
from the sale proceeds and incidental benefits were on account of NMPL,
which were to be regularly remitted by TGL in favour of NMPL. This
intention of the parties was also incorporated in the Sole Selling and
Distribution Agreement (‘SSDA’) dated 23.04.2019. An Addendum No. 1
dated 26.04.2019 was also executed between Respondent No. 1 and NMPL,
which form part of the BTA.
4. It is further averred that pursuant to these agreements and upon
incorporation of the Petitioner, a Tripartite Assignment Agreement (‘TAA’)
was executed between the Petitioner, Respondent No. 1 and NMPL on
08.05.2019, whereby NMPL assigned all its rights and interests accruing
under BTA and SSDA in favour of the Petitioner and Respondents became
confirming party to the TAA. Post execution of TAA, Respondent No. 1
accepted monies from the Petitioner and also executed three Addendums,
which also form part of BTA. Upon receipt of consideration in terms of and
in performance of these agreements, Respondent No. 1 also executed
Tripartite Agreement dated 21.01.2020 with GAIL (India) Limited,
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 2 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
registered Sale Deed dated 05.02.2020 for land measuring 26.65 acres
including built up structure and certificate dated 20.02.2020 confirming
surrender of all licenses, permissions etc.
5. Petitioner avers that it made various payments to Respondent No. 1
and to third parties on its behalf both directly and through NMPL towards
consideration and running of the Plant effective from 01.04.2019 under due
acknowledgment on representation by Respondent No. 1 that amounts will
be repaid. However, no payment was made and as per books of accounts and
ledgers for the period 01.04.2019 to 31.03.2023, maintained by the
Petitioner in ordinary course of business, a sum of Rs.4,36,03,064/- is due to
the Petitioner from Respondent No. 2 as on 31.03.2023 excluding interest of
18% per annum. Demand notice was issued by the Petitioner on 20.09.2023
but payment was not made albeit Respondents in their reply dated
02.11.2023 admitted execution of BTA, SSDA and TAA. There being an
arbitration agreement in the BTA, Petitioner invoked the arbitration clause
Article 24 and sent a notice dated 21.12.2023 calling upon Respondents to
appoint a mutually agreeable Arbitrator within 30 days failing which
Petitioner would take recourse to legal remedies, however, Respondents
failed to agree to the appointment, compelling the Petitioner to file the
present petition.
6. At the outset, learned counsel appearing on behalf of Respondent
No. 1 takes a preliminary objection to the maintainability of this petition
referring to the detailed reply filed. It is urged that TAA was executed on
08.05.2019 containing Clause 15 which is the arbitration agreement between
the parties, whereby parties expressly agreed that any dispute that may arise
under TAA or BTA shall be first resolved amicably between the parties and
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 3 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
only upon failure to do so, would the disputes under BTA will be referred to
a sole Arbitrator, to be appointed by mutual consent of the three parties i.e.
Petitioner, Respondent No. 1 and NMPL. Thus, all disputes arising under
BTA were governed by Clause 15 in TAA and by virtue thereof, Petitioner
was obliged to attempt amicable resolution of the disputes before resorting
to invocation of arbitration. Having not taken recourse to the mandatory
pre-arbitral mechanism, Petitioner cannot approach this Court under Section
11(6) of the 1996 Act and being premature, petition deserves to be
dismissed. It is emphasised that the expression ‘shall’ in Clause 15 fortifies
the agreement between the parties that invoking arbitration would only be a
second step in case the amicable resolution failed. In support of this plea,
learned counsel relies on the judgment of the Division Bench of this Court in
Welspun Enterprises Ltd. v. NCC Ltd., 2022 SCC OnLine Del 3296,
wherein examining a similar Dispute Resolution Clause, the Court held that
if the arbitration agreement requires parties to exhaust the pre-reference
procedure and engage in negotiations or amicable settlement of disputes,
right to refer the disputes to arbitration would arise only after parties have
exhausted the said procedure and even in cases where such process
consumes significant time, cause of action to invoke arbitration would arise
only after such process has irrevocably broken down.
7. Per contra, Mr. Mukul Gupta, learned Senior Counsel appearing on
behalf of the Petitioner submits that there is no merit in the preliminary
objection raised by Respondent No. 1. It is urged that if a party who has
genuine claims against the other party to the arbitration agreement and
makes an attempt to amicably settle the disputes but for some reason the
other party simply sits back and allows time to pass, it cannot be argued that
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 4 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
the first party will be precluded from taking recourse to arbitration as
mechanism for dispute resolution, as this would be highly unfair and
detrimental to the interest of a party aggrieved. Therefore, it cannot be urged
by Respondent No. 1 that as a thumb rule no party can invoke arbitration till
it exhausts the pre-reference procedure of amicable settlement/conciliation
even though it may be so prescribed in the dispute resolution clause agreed
upon between the parties.
8. To buttress this plea, Mr. Gupta relies on the judgments of the
Co-ordinate Benches of this Court in Continuum Power Trading (TN)
Private Limited v. Solar Energy Corporation of India Limited, ARB. P.
562/2024, decided on 17.05.2024 as also Sri Ganesh Engineering Works v.
Northern Railways and Another, 2024 SCC OnLine Del 8985, wherein it is
held that pre-arbitration dispute resolution mechanism cannot be read to
preclude the parties from invoking arbitration, if parties have sincerely tried
to resolve the disputes and in a given situation asking the parties to wait for
settlement talks to culminate could be counterproductive. Therefore,
non-exhaustion of the remedy to resolve the disputes amicably cannot
preclude a party to approach the Court for appointment of Arbitrator
invoking the jurisdiction under Section 11(6) of 1996 Act. Mr. Gupta relies
on judgment of the Supreme Court in B and T AG v. Ministry of Defence,
(2024) 5 SCC 358, where the Supreme Court referring to the judgment of
the Supreme Court in Geo Miller & Co. (P) Ltd. v. Rajasthan Vidyut
Utpadan Nigam Ltd., (2020) 14 SCC 643, held that whether any particular
facts constitute a cause of action has to be determined with reference to facts
of each case and with reference to the substance rather than form of action.
If an infringement of a right happens at a particular time, the whole cause of
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 5 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
action will be said to have arisen then and there. In such a case, it is not open
to a party to sit tight and not file an application for settlement of dispute of
his right which has been infringed within the limitation period provided and
allow his right to be extinguished by lapse of time and thereafter, to wait for
another cause of action and then file an application under Section 11 of 1996
Act for establishment of his right, which was not then alive. The argument is
that if a party is precluded from taking recourse to Section 11 on account of
non-exhaustion of pre-arbitral mechanism of amicable resolution of
disputes, then in a given case a situation may arise where disputes are not
immediately resolved and by the time the procedure culminates, the petition
under Section 11 becomes time barred under Article 137 of the Limitation
Act, 1963.
9. Without prejudice to the aforesaid contention, Mr. Gupta submits that
even otherwise Respondent No. 1 is factually incorrect in stating that
Petitioner has not taken recourse to pre-arbitral procedure of resolving the
disputes amicably as envisaged in the arbitration clause inasmuch as
Petitioner through its Demand Notice dated 20.09.2023 had called upon the
Respondents to amicably resolve the disputes by making the outstanding
payment mentioned therein so that parties could part ways amicably.
However, in response thereto, Respondents completely denied the liability
and made serious allegations against the Petitioner of cheating and fraud
with a threat to take recourse to criminal action. Therefore, it cannot be said
that Petitioner did not exhaust the first step of attempting amicable
settlement before approaching this Court and the petition is maintainable.
10. Heard learned Senior Counsel for the Petitioner and learned counsels
for the Respondents.
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 6 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
11. Since a preliminary objection is raised to the maintainability of this
petition, it needs to be adjudicated at the outset. Broadly understood, the
objection to the maintainability of the petition is that Petitioner has not
exhausted the pre-reference procedure of resolving the disputes amicably
before invoking arbitration and thus the petition is premature. To decide the
rival contentions, it would be useful to refer to the arbitration clause, which
is extracted hereunder, for the ease of reference:-
“Article 24 – Dispute Resolution
In the event of any dispute or differences arising between the Parties
hereto either touching or concerning the construction, meaning or effect of
this Agreement or the respective rights and obligations of the Parties
hereto, or their enforcement there under, it shall be first settled amicably
through discussions and consultation between the Parties. If the dispute is
not resolved then it would be referred to Arbitration by appointment of
sole Arbitrator in accordance with the provisions of the Arbitration and
Conciliation, Act 1996. The arbitration award made by arbitrator shall be
final and binding on the Parties and the Parties agree to be bound thereby
and to act accordingly. The award shall be enforceable in competent
courts of law. The place and seat of Arbitration shall be New Delhi. All the
Arbitration proceedings shall be conducted in English language. The
award shall be in writing. When any dispute is under arbitration, except
for the matters under dispute the Parties shall continue to exercise their
remaining respective rights and fulfil their remaining respective
obligations under this Agreement during the pendency of the arbitration
proceedings.
15. That the Parties hereby agree that they shall work together to resolve
any dispute that may arise under this agreement or under the BTA and in
the event that disputes do arise, which parties are unable to settle
amicable, the dispute shall be referred to arbitration as per Arbitration
and Conciliation Act. 1 996. That the dispute arising out of this agreement
or under the Business Transfer Agreement including its Addendum I shall
be referred to a sole arbitrator to be appointed by mutual consent of all
the three parties and the place/seat/venue of Arbitration shall be New
Delhi.”
12. Indisputably, the clause envisages that the parties will work together
to resolve any dispute that may arise under TAA dated 08.05.2019 and BTA
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 7 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
dated 29.03.2019 amicably and only when parties are unable to settle,
disputes shall be referred to arbitration as per 1996 Act. The only question
that arises for consideration before this Court is whether Petitioner is
precluded from taking recourse to arbitration in the absence of having taken
recourse to amicable settlement of the disputes arising between the parties.
The answer to this question need not detain this Court as this issue has been
decided by the Division Bench of this Court in Welspun (supra).
13. It is pertinent to mention that the Division Bench was deciding an
appeal under Section 37(1)(c) of 1996 Act, where a challenge was laid to an
order passed by the learned Single Judge of this Court dismissing a petition
under Section 34 of 1996 Act against arbitral award dated 23.07.2018. The
award was rendered by majority of 2:1 by an Arbitral Tribunal comprising
of three members. While majority was of the view that the claims of
Welspun in the final bill were barred by limitation, minority member
expressed a contrary view and learned Single Judge concurred with the view
that claims were barred by limitation since arbitration was not commenced
within three years from the due date of payment of the final bill, as claimed.
It is this controversy which the Division Bench was called upon to decide
and in this context, the Division Bench examined whether in light of the
dispute resolution mechanism agreed to by the parties, period of limitation
would commence prior to the parties exhausting the agreed pre-reference
procedure/remedies. Referring to several judgments of the Supreme Court as
also this Court, including the judgment in Geo Miller (supra) and of this
Court in Alstom Systems India Pvt. Ltd. v. Zillion Infraprojects Pvt. Ltd. in
O.M.P.(COMM.) 351/2021, decided on 31.01.2022, the Division Bench
held that period of limitation for referring the disputes to arbitration cannot
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 8 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
commence till parties have exhausted the pre-reference procedure as
provided in the dispute resolution clause. In this backdrop, the Court also
decided the issue of obligation of a party to take recourse to pre-reference
mechanism, if provided in the arbitration clause, before invoking arbitration
and held that if the arbitration clause requires the parties to engage in
negotiations or to attempt to resolve the disputes in mediation/conciliation,
right to refer the disputes to arbitration would arise only after negotiations
for amicable settlement have failed and parties have exhausted their
endeavours to resolve the disputes. Relevant paragraphs of the judgment are
as follows:-
“66. In Alstom Systems India Pvt. Ltd. v. Zillion Infraprojects Pvt. Ltd., a
Single Bench of this Court had considered the question whether the period
of limitation for referring the disputes to arbitration would commence
from the date of failure of mediation. The Court referred to the decision of
the Supreme Court in Geo Miller & Company Pvt. Ltd. v. Chairman,
Rajasthan Vidyut Utpadan Nigam Ltd. and held as under:
“21. No doubt, the opening sentence of para 28 in Geo Miller talks
of exclusion of the period of negotiation, while computing the
period of limitation for the purposes of 1996 Act. Mr. Sethi had,
with some justification, sought to capitalize on this observation to
contend that, at best, the learned Arbitral Tribunal could only have
excluded the period during which the petitioner and the respondent
were negotiating. The learned Arbitral Tribunal could not, submits
Mr. Sethi, have postponed the cause of action to 27th September
2020, when the efforts at mediation failed.
22. If one were to read the first sentence in para 28 of Geo Miller
divorced from the rest of the paragraph, perhaps this submission
might have merited consideration. It is, however, trite that the
judgments of Court are not to be read like statutes. Equally, words
used by the Supreme Court, in its judgments, are all to be accorded
due importance. A paragraph in a judgment is to be read as a
whole, and not in a vivisected fashion, relying on one sentence and
overlooking others. Para 28 of Geo Miller clearly goes on to hold
that, once the ‘breaking point’, being the date on which any
reasonable party would have abandoned the efforts at settlement,
is determined, the cause of action would be deemed to arise fromSignature Not Verified
Digitally Signed ARB.P. 442/2025 Page 9 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
that date, for referring the dispute to arbitration. These words are
clear, unambiguous and unequivocal. They entirely support the
view, expressed by the learned Arbitral Tribunal, that the cause of
action, in the present case, would be deemed to arise on
7th September 2020, being the date on which efforts at mediation
between the parties ultimately failed. That once the ‘breaking
point’, being the date on which any reasonable party would have
abandoned the efforts at settlement, is determined, the cause of
action would be deemed to arise from that date, for referring the
dispute to arbitration. These words are clear, unambiguous and
unequivocal.”
[emphasis added]
67. We concur with the aforesaid view. The period of limitation for
referring the disputes to arbitration cannot commence till the parties have
exhausted the necessary pre-reference procedure. If the arbitration clause
requires the parties to engage in negotiations or to attempt to resolve the
disputes in mediation/conciliation, the right to refer the disputes to
arbitration would arise only after the negotiations for an amicable
settlement have failed and the parties have exhausted their endeavors to
resolve the disputes through mediation/conciliation.
68. Several courts in various decisions have consistently held that pre-
reference arbitration mediation/settlement processes are required to run
the full course. Even in cases where such processes have consumed a
significant period of time, the courts have held that the cause of action to
invoke the arbitration would arise only after such process has irrevocably
broken down.
70. In National Highways Authority v. Progressive Construction Ltd., a
Single Bench of this Court considered a case whether the disputes had
been pending resolution before a committee constituted by the petitioner
(National Highways Authority). The reference of the disputes to a
committee was not a part of the dispute resolution clause; the committee
had been set up in an ad hoc fashion after the disputes had arisen during
the performance of the contract in question. The process for amicable
resolution of disputes continued for almost six years before it was
explicitly rejected. Thereafter, the disputes were referred to arbitration. In
the arbitral proceedings, an objection was raised that the claims were
barred by limitation. It was contended that the period of limitation
commenced from the original date when the disputes had first arisen prior
to reference of the same to the committee. The Arbitral Tribunal rejected
the said contention and found that the claims were within the period of
limitation. The arbitral award was challenged before this Court. The
learned Single Judge of this Court upheld the arbitral award and observed
as under:
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 10 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
“20. On reading of the findings of the Arbitral Tribunal it would
disclose that the arguments of the petitioner on the issue of
limitation are without any force, as there is a finding of fact by the
Arbitral Tribunal that the Variation Orders for the entire increased
quantity were not issued on 26th March, 2003, and yet further the
issue as to the revision of the rates was under the active
consideration of the respondent for a very long time from 29th May,
2003, to 27th April, 2009, as the respondent had formed a
Committee for revising the rates and forwarding the revised rates
to NHAI for approval, and the respondent had also appeared
before the Committee in an attempt to amicably resolve the issue.
The respondent rejected the proposal for revised rates only on
27th April, 2009, and therefore the contention of the petitioner is
that the cause of action began on 26th March, 2003, cannot be
accepted. It is settled law that when the parties are actively trying
to resolve the disputes, then the cause of action for resorting to
arbitration cannot be said to have commenced.”
71. The decision of the learned Single Judge in National Highways
Authority v. Progressive Construction Ltd. was upheld by a Division
Bench of this Court by an order dated 08.09.2014. The relevant extract of
the said decision reads as under:
“24. The third condition concerns limitation.
25. As per NHAI the cause of action arose when variation order
for change in quantity of items were issued on March 26, 2003.
26. The learned Single Judge has noted that the learned Arbitral
Tribunal has dealt with the factual aspect of this issue, which
reasoning has been verbatim noted in paragraph 19 of the
impugned decision.
27. Pithily stated that the learned Single Judge has brought out
that after the variation order, notifying change of quantities, was
issued on March 26, 2003, parties discussed the vexed question of
in what manner the same had to translate into price payable to the
contractor. The learned Single Judge has noted that the Arbitral
Tribunal had succinctly brought out that the variation order issued
on March 26, 2003 was not for an entire increased quantity. The
learned Single Judge has noted that the Arbitral Tribunal has
brought out the impact of the issue of revision of rates being
discussed. The learned Single Judge has noted that on April 27,
2009, NHAI itself had formed a committee to resolve the impasse.
To put it pithily, the dispute was not on the increased quantity as
per price variation; the dispute concerned the revision of rates. It
is not the case of NHAI that on a particular date it unequivocally
closed the chapter on the revision of the rates leaving no furtherSignature Not Verified
Digitally Signed ARB.P. 442/2025 Page 11 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
scope for any discussion and further with respect to said date
cause of action would accrue.
28. The objections filed by NHAI show a total confusion in the
mind of NHAI between a cause of action and cause of action
accruing. Whereas the former encompasses such facts, if traversed,
required to be proved to sustain a claim, the latter would mean the
date on which the right to sue accrues.”
[emphasis added]
72. It is necessary to note that the Coordinate Bench of this Court had
held that there was a clear distinction between “cause of action” for
prosecuting a claim and the “cause of action accruing” for invoking
arbitration.
76. We are unable to concur with the aforesaid reasoning of the learned
Single Judge in Ravinder Kumar Verma v. BPTP Ltd. Section 77 of the
A&C Act expressly proscribes the parties from initiating any judicial
proceedings in respect of disputes that are subject matter of conciliation
proceedings except where in the opinion of the party “such proceedings
are necessary for preserving his rights”. The period of limitation to refer
the disputes to arbitration commences only upon the parties exhausting the
necessary pre-reference procedure, hence, the question of taking recourse
to Section 11 of the A&C Act for appointment of an arbitrator for
preserving the right to arbitration does not arise.
77. The necessary question to be addressed is whether the period of
limitation for referring the disputes to arbitration commences to run prior
to the parties exhausting the agreed pre-reference procedures. In our
view, the answer is in the negative. If the period of limitation does not
commence running till the pre-arbitration processes have been exhausted –
as has been held in various decisions-there is no need for protecting the
remedy of arbitration against the bar of limitation prior to completion of
the pre-reference procedure. We are unable to accept that if the
arbitration agreement requires a party to refer the disputes to conciliation
before referring the same to arbitration, the period of limitation would
commence prior to the parties exhausting the remedy to resolve the
disputes through conciliation.
78. The idea of mediation, even in cases of litigation, is encouraged in
many countries. Austria, for example, provides methods of regulating
limitation periods and permits suspension of such limitation period before
initiating court proceedings. Poland requires for interruption of the
limitation period in cases of pre-litigation mediation, that is, the limitation
period ceases entirely upon commencement of the mediation process. The
position in Hungary appears to be similar. In Singapore, however, the
mediation process does not generally postpone or pause the period
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 12 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
expended in settlements efforts before invoking arbitration.
93. In the facts of the present case, the Arbitration Clause expressly
required the parties to attempt resolving the disputes and differences by
mutual negotiations. If the efforts to resolve the disputes did not yield fruit
within a period of one month from the date the same had arisen, the
parties were bound to refer the disputes to their respective Chief
Executives. The parties could refer the disputes to arbitration only if the
Chief Executives failed to arrive at a consensus.
97. Welspun was not expected to immediately institute the dispute
resolution mechanism on the Completion Certification being issued on
30.11.2010. The letter dated 10.09.2012 indicates that the controversy
between the parties had crystalized after 30.11.2010. However, it is also
clear from the letter dated 10.09.2012 that the disputes had arisen between
the parties and the parties had failed to resolve the same. Within a period
of three months after receipt of the letter dated 10.09.2012, Welspun
invoked the dispute resolution mechanism and by a letter dated
26.11.2012, made a request for their respective Chief Executives to meet
to resolve the disputes.
98. It is not clear as and when the negotiations between the parties to
amicably resolve the disputes commenced and failed. However, it is clear
that Welspun had escalated resolution of the disputes to the second tier by
seeking a reference to the respective Chief Executives well within the
period of limitation. Clearly, Welspun could not have sought a reference to
arbitration prior to referring the disputes for resolution to the respective
Chief Executives. Concededly, an attempt to resolve the disputes by the
Chief Executives failed on 21.12.2012. It is on the said date that the right
to refer the disputes arose in favour of Welspun. Welspun could not have
referred the disputes prior to exhausting the remedies of referring the
disputes to the respective Chief Executives for resolution. The period of
limitation for referring the disputes to arbitration thus, must commence
from the said date, that is, 21.12.2012. Welspun commenced arbitration on
27.01.2014, that is, after a period of thirteen months and six days, which
was within the period of three years from the date on which the right to
refer the disputes to arbitration arose.
99. In view of the above, it is clear that the decision of the Arbitral
Tribunal (majority) to reject the claims made by Welspun as being barred
by limitation is erroneous and the impugned award is liable to be set
aside. The said error is self-evident from the record.
100. The learned Single Judge accepted that it was necessary for the
parties to explore the possibility of settlement through reference of the
disputes to the Chief Executives before invoking the arbitration. However,
the learned Single Judge erroneously concluded that Welspun was not
considering the reference to the Chief Executives as a precondition for
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 13 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
invocation of the arbitration but as a step for attempting an amicable
resolution of the disputes.
101. This Court is unable to concur with the said view. Once it is accepted
that it is necessary for Welspun to make a reference of the disputes to the
Chief Executives of the parties, it follows that Welspun could seek a
reference to arbitration only if the said proceedings were terminated. As
noted above, the reference to the Chief Executives of the parties resulted in
failure on 21.12.2012. Welspun could have invoked the arbitration
immediately thereafter but its failure to do so does not render its reference
barred by the Limitation Act.”
14. In light of the judgment of the Division Bench, there is merit in the
preliminary objection raised by Respondent No. 1 that Petitioner ought to
have exhausted the pre-reference procedure of amicable settlement of the
disputes before approaching this Court for appointment of Arbitrator and the
judgments of the Coordinate Benches can be of no aid to the Petitioner.
Albeit Mr. Gupta referred to the judgment of the Supreme Court in B and T
AG (supra) but in his usual fairness, candidly submitted that the said
judgment does not deal with the issue arising in the present case and also
conceded that there is no judgment of the Supreme Court holding contrary to
the judgment of the Division Bench in Welspun (supra). Insofar as the
argument that Petitioner did attempt to amicably settle the disputes is
concerned, I have carefully perused the notice sent by the Petitioner on
20.09.2023 but I am unable to discern any request by the Petitioner to
amicably resolve the disputes.
15. Accordingly, this petition is dismissed as premature since Petitioner
has not taken recourse to pre-reference mechanism of resolving the disputes
through settlement talks.
16. At this stage, learned Senior Counsel for the Petitioner and counsel
for Respondent No. 1 submit, on instructions, that they are willing to explore
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 14 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
the possibility of amicable settlement of their inter se disputes. It is also
agreed that parties will convene a meeting on 11.08.2025 at 04:00 P.M. at a
mutually convenient venue, which will be decided in advance.
17. Let the parties explore the possibility of amicable settlement as
agreed. Needless to state that if the settlement talks fail for any reason,
parties will be at liberty to take recourse to resolution of disputes through
arbitration. It is made clear that this Court has not expressed any opinion on
the merits of the case and all rights and contentions of the parties are left
open.
JYOTI SINGH, J
JULY 24, 2025/Shivam
Signature Not Verified
Digitally Signed ARB.P. 442/2025 Page 15 of 15
By:KAMAL KUMAR
Signing Date:31.07.2025
11:03:34
[ad_1]
Source link