CLAUSE RESTRICTING RIGHT TO INVOKE ARBITRATION IS INVALID

While deciding an application under Section 11(6) seeking appointment of a sole arbitrator to adjudicate the dispute that has arisen between the parties, the Hon’ble Delhi High Court has held that an arbitration clause that restricts the right of a party to a mere of 6 months is invalid and that the right to invoke arbitration cannot be restricted to a period lesser than what is prescribed in the Limitation Act, 1963. The application was contested on the ground that the said arbitration mechanism has not been invoked within time as per the dispute resolution mechanism provided under the contract and thus, the application is non- maintainable. The Hon’ble Delhi High Court rejected the contention of the Respondent and held that any clause which restricts the right to invoke arbitration to 6 months is invalid and is in violation of the provisions of the Indian Contract Act, 1872 thereby appointing an arbitrator to adjudicate upon the disputes between the parties.

M/s G.S. Express Pvt Ltd v. NTPC Ltd

Delhi High Court l Decided on 16.08.2023