In Brief
BSNL withheld Rs. 99.7 crores from Nortel Networks for alleged breach of contract. Nortel claimed the deduction on 13 May 2014; BSNL rejected it on 4 August 2014. Over 5½ years later, on 29 April 2020, Nortel invoked arbitration. The Court held that the limitation period for filing a Section 11 appointment application is 3 years under Article 137 of the Limitation Act, 1963, running from failure to appoint the arbitrator. Since the notice was issued 5½ years after rejection with no pleaded facts extending the limitation, it was ex facie time-barred. The Court allowed BSNL's appeal and set aside the High Court's referral, holding that in rare cases where claims are manifestly time-barred and no subsisting dispute exists, courts may refuse arbitration referral.
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