The case, filed under Section 11 of the Arbitration and Conciliation Act, 1996, centers around a water supply agreement dated 25.07.2013 between the two companies. South Ganga Waters sought arbitration, claiming breach of contract and outstanding payments from Vedanta.
Key Legal Insights
Justice Abdul Quddhose, while delivering the order, highlighted critical legal principles governing arbitration proceedings. The court emphasized that at the referral stage, judicial interference is limited to examining the "prima facie existence of the arbitration agreement."
Limitation Period Clarification
The court addressed the respondent's argument about the claim being time-barred, noting that the limitation period for filing a Section 11 petition commences from the date of arbitration invocation notice. In this case, the notice was issued on 10.09.2024, making the petition well within the three-year limitation period.
Notable Observations
"The object of the Arbitration and Conciliation Act is for expeditious resolution of commercial disputes within a time-bound period," Justice Quddhose remarked, emphasizing the legislative intent behind streamlined dispute resolution.
Dispute Background
The original water supply contract, which expired on 31.12.2015, became contentious when Vedanta issued a force majeure notice on 16.04.2018, indicating inability to accept supplies. South Ganga Waters subsequently issued a termination notice on 31.05.2024.
Court's Directions
The court's order includes:
- Appointment of Justice Sanjib Banerjee as sole arbitrator
- Remuneration as per Schedule IV of the Arbitration Act
- Mandate to pass the arbitral award within the stipulated period
Significant Legal Precedents
The judgment referenced recent Supreme Court rulings, including:
- Interplay between Arbitration Agreements and Indian Stamp Act
- SBI General Insurance Co. Ltd. vs. Krish Spinning
- Vedanta Limited vs. State of Tamil Nadu
The court's nuanced approach underscores the evolving judicial interpretation of arbitration proceedings, balancing procedural requirements with the spirit of dispute resolution.
keywords: Arbitration, Madras High Court, Water Supply Contract, Vedanta Limited, Commercial Dispute, Justice Sanjib Banerjee
