Delhi High Court recently delivered a judgment in Tirupati Constwell Private Limited v. Delhi States Employees Federation CGHS Ltd., 2025 DHC 3649. that arose from a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“A&C Act”). Tirupati Constwell Private Limited (“Petitioner”), sought appointment of arbitrators to adjudicate disputes arising out of a construction contract executed in 2005. The main issue before the Hon’ble Court was whether the petition filed in July 2024 was barred by limitation, since the notice invoking arbitration had been issued more than five years earlier, in February 2019.

Petitioner was awarded a contract in 2005 by the Delhi States Employees Federation CGHS Ltd. (“Respondent”) for the construction of 131 dwelling units in a cooperative group housing society in Dwarka, New Delhi. As disputes arose regarding non-payment of substantial dues (allegedly claimed to be INR 80,92,26,992/-), the Petitioner initially sent a notice for conciliation in December 2018, followed by a formal notice invoking arbitration under Clause 39.1 of the agreement on February 22, 2019. The Respondent replied on March 16, 2019, denying the arbitration clause and stating that the complete record have never been provided by the previous Management Committee to the Respondent, hence, the Respondent is not in a possession of the original agreement. After the Respondent refused to participate in arbitration, the architect (one of the arbitrators) stepped in to mediate. However, mediation failed, and the architect eventually recused himself from the process on August 24, 2019, leaving it open for the Petitioner to appoint an arbitrator. The Petitioner, thus, approached the Hon’ble Court for appointment of arbitrators to resolve the dispute.

The Petitioner argued that the limitation period under Section 11 of the A&C Act should exclude the time between March 27, 2019 and August 24, 2019, during which the architect allegedly acted as a mediator holding meetings and issuing notices for dispute resolution. However, the Court rejected this contention, finding no evidence of any request for mediation or bonafide negotiation efforts. It was found that there was no express or implied request by either party asking the architect to mediate. Instead, all the documents and proceedings during this period consistently described the architect as acting in the capacity of an arbitrator, not a mediator and later recused himself due to a challenge to his impartiality. Relying on judgments in Geo Miller & Company Pvt. Ltd. v. Chairman, Rajasthan Vidyut Utpadan Nigam Ltd (2020) and SBI General Insurance v. Krish Spinning (2020), the Court held that suspension of limitation requires clear efforts at amicable resolution and a definitive "breaking point" both of which were absent in the present dispute.

The Hon’ble Court held that the limitation for filing a petition under Section 11 of the A&C Act commences from the date of refusal to arbitrate. Since the Respondent had unequivocally refused arbitration on March 16, 2019, the limitation began from that date and ran uninterrupted. The Hon’ble Court rejected the Petitioner’s claim that informal mediation attempts by the architect could extend limitation, finding them neither legally recognized nor mutually agreed upon.

Relying on Arif Azim v. M/s Aptech Ltd.(2024), the Court reiterated that at the Section 11 stage, it must examine whether the petition is within limitation and whether the claims are ex-facie deadwood. Finding the petition being time-barred, the Court declined to consider the merits and dismissed the petition.

By - Akarsh Pandey