(1.) THIS appeal under Section 37(1) of Arbitration and Conciliation Act,1996 impugns the judgment of the court below dated 01.10.2013 by which the objections of the respondent/Union of India filed under Section 34 of the Arbitration and Conciliation Act, 1996 were allowed by setting aside the Award of the arbitrator dated 19.5.2011 and remanding the matter to the arbitrator for a fresh decision in accordance with law.
(2.) BY the Award the arbitrator had dismissed the claim petition of the respondent herein which was filed for recovery of loss on account of risk purchase undertaken by the respondent on account of breach of the appellant in failing to supply 30 MT Pineapple (Tinned) for defence services. The claim petition was dismissed by the arbitrator as time barred in view of Clause 23 of the contract, which provides that if the contractor within a period of one year from the date of completion of the contract does not make request for arbitration, the claim petition should not be entertained. This clause reads as under: -
(3.) I would like to observe that independent of the language of clause 23 of the contract, Section 28 of the Indian Contract Act,1872 is determinative of the issue that arbitration could always be invoked before three years, and which period of three years is provided under Article 137 of the Limitation Act,1963. The period of three years of limitation is calculated from the date of arising of the disputes which have to be referred to the arbitration. Section 28 of the Contract Act was amended by the Act 1 of 1997, and as a result of the amendment, all clauses in the contract which extinguish rights before the period of limitation specified other than the Limitation Act, have to be held to be illegal and void.