M/S. Uttarakhand Purv Sainik Kalyan Nigam Limited vs. Northern Coal Field Limited
[2019] 14 S.C.R. 9992019 INSC 1292
Coram: Hon’ble Justice Indu Malhotra & Hon’ble Justice Ajay Rastogi
Forum: Hon’ble Supreme Court of India
Case No.: Special Leave Petition (Civil) No. 11476 of 2018
Date of Decision: November 27, 2019

Note: Doctrine of Kompetenz-Kompetenz: The doctrine of "Kompetenz-Kompetenz" confers upon the arbitral tribunal the authority to determine its own jurisdiction, including the validity of the arbitration agreement, thereby minimising judicial intervention and preventing delays from preliminary objections. (Paragraph 9.9)

Facts & Background:

  • M/s Uttarakhand Purv Sainik Kalyan Nigam Limited, the security service provider, was the Petitioner–Contractor in the present case.
  • The Northern Coal Field Limited Company was the Respondent.
  • The Petitioner and Respondent entered into an agreement dated 21.12.2010, in which the Contractor was obligated to provide round-the-clock security services on a need-basis at agreed rates. The agreement contained an arbitration clause.
  • Disputes arose regarding payment under the contract, with the Respondent deducting security amounts from the running bills. The Petitioner issued a legal notice on 29.05.2013 demanding payment of ₹1,43,69,309/- with interest.
  • The Petitioner issued a Notice of Arbitration on 09.03.2016, calling upon the Respondent to nominate a sole arbitrator; however, the Respondent failed to respond.
  • On 30.05.2016, the Petitioner issued a subsequent notice proposing Mr. Jai Singh, a retired Additional District Judge, as the sole arbitrator.
  • The Respondent’s failure to respond led the Petitioner to file an application under Section 11 of the Arbitration and Conciliation Act, 1996, on 20.09.2016, seeking the High Court's intervention to appoint a sole arbitrator.
  • On 11.01.2018, the High Court held that the Petitioner’s claims were barred by limitation and consequently declined to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.
  • Aggrieved by the High Court's order, the Petitioner filed a Special Leave Petition before the Supreme Court.

Main Issue:

  • Whether the High Court was justified in rejecting the application filed under Section 11 of the Arbitration & Conciliation Act, 1996, for reference to arbitration on the ground that it was barred by limitation?