Arbitration Claim barred by limitation – Powers of Section 34 Court
The appellant – claimant is the Company incorporated under the laws of Korea. The respondent – Tema is incorporated under the laws of India.
In 2008, the claimant Seok company had confirmed the purchase orders of the respondent for the supply of forgings. However, there were outstanding dues payable by Tema. There was lot of correspondence for the payments but no payments were forthcoming.
In 2013, there was MoU on payment of the outstanding dues. However, no payments were made.
Seok filed company petition in 2015 for winding up of Tema company. However, by the order dated 26.9.2017, the High Court referred the disputes to arbitration.
Tema had opposed the arbitration claim primarily on the ground of limitation.
The Arbitrator had framed four issues including issue No.1 on limitation vide order dated 6.4.2018. However, the Arbitral Award was passed in favour of the Claimant Seok.
The learned Single Judge, in section 34 petition, held that the claim was barred by limitation.
HELD that the failure of Tema to pay the debts was pleaded to be of a “continuous nature”. A plea of continuing wrong is a legal plea. Section 22 of the Limitation Act provides for computation of limitation in the case of continuing breach of contract or tort, to provide that a fresh period of limitation begins to run at every moment at the time during which the breach or the tort, as the case may be, continues.
Section 34 does not permissible the Court to re-appreciate evidence and come to a different conclusion than recorded by the Arbitrator analyzing the documentary and oral evidence on the issue of limitation namely; on the applicability of Section 18 of the Limitation Act. Thus, even if there was an erroneous application of law, it was not the province of the Court in exercising jurisdiction under Section 34, reaching to a different conclusion on limitation, purporting to fault the award on the ground of patent illegality.
The Division Bench while allowing section 37 petition directed the respondent – Tema to bear the cost of Section 34 and also Section 37 proceedings, the quantum of such costs to be decided by the Taxing Master, High Court, Original Side, in terms of the provisions of the Commercial Courts Act, 2015.
Judgment dated 6.6.2025 of the Division Bench of the High Court of Bombay in Commercial Arbitration Appeal (L) No.18048 of 2024 in Commercial Arbitration Petition No.342 of 2020 of Seok-Am-Tech Co. Ltd Vs. Tema India Private Ltd
