The Supreme Court dismissed the petition for appointment of an arbitrator under Section 11(5) of the Arbitration and Conciliation Act, 1996. The Court held that the underlying claim for recovery of money was hopelessly barred by limitation, rendering the appointment of an arbitrator untenable in law.
Facts Of The Case:
The case involves a dispute arising from a partnership deed containing an arbitration clause. The petitioner, residing in the UK, entered into a partnership with the respondent on 20.09.2014, succeeding an earlier partnership involving the petitioner’s sister. The petitioner alleged that he paid substantial sums amounting to Rs. 2.31 crores, relying on a clause entitling him to 75% of profits from a property purchased on 04.05.2016, but received nothing. The partnership was dissolved earlier, on 22.12.2008. The petitioner issued a notice for appointment of an arbitrator on 09.12.2020. The respondent contended the claim was time-barred. Key dates included a police complaint by the petitioner on 06.05.2017, which was closed, and a subsequent criminal complaint rejected on 16.06.2017. The petitioner also referenced receiving a payment of Rs. 1 lakh on 04.08.2017. The arbitration request was first filed before the Karnataka High Court on 22.06.2022 and was later transferred to the Supreme Court. The Court examined the timeline and found the claim for recovery was barred by limitation as of the date of the arbitration notice.
Procedural History:
The procedural history of the case is as follows. The petitioner first issued a notice for appointment of an arbitrator on 09.12.2020. Subsequently, he filed an arbitration petition under Section 11 of the Arbitration and Conciliation Act, 1996, before the High Court of Karnataka at Bengaluru on 22.06.2022. This petition remained pending until 20.01.2025, when the High Court disposed of it, granting liberty to pursue appropriate remedies. Following this, the petitioner filed the present Arbitration Petition No. 21 of 2025 directly before the Supreme Court of India under its original civil jurisdiction, seeking the appointment of an arbitrator, which led to the impugned judgment.
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Court Observation:
The Supreme Court observed that the petitioner’s claim for recovery of money was hopelessly barred by limitation. The Court noted that the alleged payments were made prior to 09.12.2020, the date of the arbitration notice, from which point the claim was already time-barred. It further observed that even if limitation was computed from 04.08.2017—the date of a subsequent payment acknowledged by the petitioner—the notice issued in December 2020 was still beyond the permissible period. The Court also took judicial notice of the petitioner’s earlier failed criminal complaint from 2017 and the delayed filing of the arbitration petition before the High Court in 2022, reinforcing the conclusion of an inordinate and unexplained delay in initiating arbitration proceedings.
Final Decision & Judgement:
The Supreme Court dismissed the Arbitration Petition seeking the appointment of an arbitrator. The Court held that the underlying substantive claim for recovery of money was ex facie barred by limitation. Consequently, appointing an arbitrator for a time-barred claim would be futile and impermissible in law. All pending applications, if any, were also disposed of accordingly.
Case Details:
Case Title: Alan Mervyn Arthur Stephenson vs. J. Xavier Jayarajan Citation: 2025 INSC 1228 Appeal No.: Arbitration Petition No. 21 of 2025 Date of Judgment: October 14, 2025 Judges/Justices Name: Justice K. Vinod Chandra and Justice B.R. Gavai