In Brief
A Swiss arms manufacturer sought court appointment of an arbitrator to resolve disputes with India's Ministry of Defence regarding alleged wrongful deduction of liquidated damages (LD) and encashment of a bank guarantee worth €201,793.75. The disputes arose in February 2016, but the company only invoked arbitration in November 2021—over five years later. The Supreme Court held that the "breaking point" (when a reasonable party would abandon settlement hopes) occurred in 2016 when the guarantee was encashed and amounts transferred to government accounts. Mere subsequent negotiations cannot postpone the statutory three-year limitation period under the Limitation Act, 1963, Article 137. The Court rejected the petition as hopelessly time-barred.
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