Wipro Enterprises PVT LTD (Wipro Water) A Company Incorporated Under The Provisions Of Companies Act vs. Bharat Petroleum Corporation LTD.

Held

The Court held that the application for the appointment of an arbitrator is barred by limitation. The cause of action for tax reimbursement accrued to the applicant in June-July 2017 when the demand was raised and reminders were sent. The applicant failed to take action to give notice for the appointment of an arbitrator within the prescribed period of three years from the accrual of the cause of action. The Court noted that the applicant cannot wait for a period of three years and then give notice for the appointment of an arbitrator. Relying on the Supreme Court's decision in BSNL vs. Nortel Networks (India) (P) Ltd., the Court reiterated that the period of limitation for issuing a notice of arbitration is not extended by mere exchange of letters or settlement discussions. The applicant's delay in issuing the notice for arbitrator appointment on July 12, 2022, which is beyond three years from June-July 2017, renders the claim time-barred. Therefore, the Arbitration Case was dismissed.

Facts

Wipro Enterprises Pvt Ltd (Wipro Water), the applicant, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. Wipro had a contract with Bharat Petroleum Corporation Ltd. (BPCL) for a refinery project, under which BPCL was obliged to reimburse taxes, including excise duty (pre-GST) and service tax. Wipro claimed tax reimbursement of Rs. 29,47,169.00 via email on June 26, 2017, with a reminder on July 2, 2017. Clause 8.6 of the contract contained an arbitration clause. Wipro issued a notice for arbitrator appointment on July 12, 2022. BPCL informed Wipro that Bharat Oman Refineries Limited had amalgamated with BPCL effective July 1, 2022. Wipro then issued another notice for constituting an arbitration tribunal. BPCL opposed the prayer, arguing the dispute was time-barred.

Key Issues

1. Whether the application for the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, is barred by limitation, considering the cause of action accrued in June-July 2017 and the notice for arbitration was issued on July 12, 2022. Petitioner's arguments: The petitioner argued that the limitation period for filing a petition under Section 11(6) commences once a valid notice invoking arbitration has been sent and there has been a failure or refusal to comply. They relied on the Supreme Court judgment in M/S Arif Azim Co. Ltd. vs M/S Aptech Ltd. (2024) 5 SCC 313. Respondent's arguments: The respondent argued that the dispute arose in 2017 and the cause of action is time-barred, thus an arbitrator could not be appointed. They relied on the Supreme Court judgment in BSNL vs. Nortel Networks (India) (P) Ltd. (2021) 5 SCC 738, which states that the period of limitation for issuing a notice of arbitration would not be extended by mere exchange of letters or settlement discussions, and that a claim must be made within three years of the rejection of a final bill.