Arbitration and Conciliation Act, 1996; Section 11 – The initiation of arbitration and criminal proceedings under Section 138 of the Negotiable Instruments Act 1881 are separate and independent proceedings that arise from two separate causes of action. Therefore, the institution of the proceedings under Section 138 does not imply a ‘continuing cause of action’ for the purpose of initiating arbitration. (Para 9)
Arbitration and Conciliation Act, 1996; Section 11 –Whether a claim is barred by limitation lies ordinarily within the domain of the arbitral tribunal. However, a court exercising jurisdiction under Section 11(6) of the Act may reject ex facie non-arbitrable or dead claims, to protect the other party from being drawn into a protracted arbitration process, that is bound to eventually fail. The court must ‘cut the deadwood’ by refraining from appointing an arbitrator when claims are ex facie time-barred and dead, or there is no subsisting dispute.This examination does not involve a full review of contested facts but only a primary review, where uncontested facts speak for themselves.Such limited scrutiny is necessary as it is the duty of the court to protect the parties from being compelled to arbitrate when the claim is demonstrably barred by limitation. If courts do not intervene within this limited compass and mechanically refer every dispute to arbitration, it may undermine the effectiveness of the arbitration process itself. (Para 5)