Arbitration Law

State of Goa vs. Praveen Enterprises [AIR 2011 SC 3814]: Supreme Court of India

The limitation period for counter-claim is calculated as on the date of filing of counter-claim unless such notice of arbitration for such claim has been given earlier

17. As far as counter claims are concerned, there is no room for ambiguity in regard to the relevant date for determining the limitation. Section 3(2)(b) of Limitation Act, 1963 provides that in regard to a counter claim in suits, the date on which the counter claim is made in court shall be deemed to be the date of institution of the counter claim. As Limitation Act, 1963 is made applicable to arbitrations, in the case of a counter claim by a Respondent in an arbitral proceedings, the date on which the counter claim is made before the arbitrator will be the date of “institution” in so far as counter claim is concerned. There is, therefore, no need to provide a date of ‘commencement’ as in the case of claims of a claimant. Section 21 of the Act is therefore not relevant for counter claims. There is however one exception. Where the Respondent against whom a claim is made, had also made a claim against the claimant and sought arbitration by serving a notice to the claimant but subsequently raises that claim as a counter claim in the arbitration proceedings initiated by the claimant, instead of filing a separate application under Section 11 of the Act, the limitation for such counter claim should be computed, as on the date of service of notice of such claim on the claimant and not on the date of filing of the counter claim.