Supreme Court dismisses arbitration plea as time-barred; holds delay defeats request for appointment under Section 11(5) of Arbitration Act.

Headnote:

The Supreme Court in Alan Mervyn Arthur Stephenson v. J. Xavier Jayarajan (2025 INSC 1228) dismissed a petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. The petitioner, residing in the United Kingdom, entered into a partnership with the respondent for a real estate venture but later alleged non-payment of profit share despite contributing ₹2.31 crore. The Court found that the alleged cause of action arose in 2016, whereas the first notice invoking arbitration was issued only in December 2020, rendering the claim hopelessly barred by limitation. Even the subsequent arbitration request and petition were filed after further substantial delay. The Court reiterated that an arbitration claim must be initiated within the prescribed limitation period and that stale or time-barred disputes cannot be revived through Section 11 proceedings.

Background:

The petitioner and respondent were partners in a real estate business initiated under a deed dated 20.09.2014, following an earlier partnership between the respondent and petitioner’s sister. The petitioner claimed to have invested ₹2.31 crore for a property purchased on 04.05.2016, under a clause promising 75% of profits to him. Following alleged non-performance, he filed a police complaint and a private criminal complaint in 2017, both of which were dismissed. A notice invoking arbitration was sent only on 09.12.2020, long after the limitation period had expired. The petition under Section 11(5) was first filed before the Karnataka High Court in 2022 and later before the Supreme Court in 2025 after being permitted to approach the appropriate forum.

Court’s Findings:

The Bench, led by Hon’ble Chief Justice B.R. Gavai and Hon’ble Mr. Justice K. Vinod Chandran, observed that the claim was clearly barred by limitation even from the date of the last alleged payment of ₹1 lakh on 04.08.2017. The Court noted that the arbitration notice of December 2020 and subsequent filings were made well beyond the permissible period. Citing that the petitioner had been aware of his grievances since 2016 and had already sought other remedies, the Court held that the arbitration request was an attempt to revive a dead claim. Accordingly, the petition for appointment of an arbitrator was dismissed as time-barred, and all pending applications were disposed of.

Legal Principles:

1. Arbitration claims are subject to statutory limitation periods.
2. Section 11 jurisdiction cannot be invoked to revive time-barred disputes.
3. Delay in issuing arbitration notice or filing petition defeats arbitral remedy.

Case Details:

Court: Supreme Court of India

Judges: Hon’ble Chief Justice B.R. Gavai & Hon’ble Mr. Justice K. Vinod Chandran

Citation: 2025 INSC 1228

Case Type: Arbitration Petition No. 21 of 2025

Acts Invoked: Section 11(5), Arbitration and Conciliation Act, 1996