In commercial suits, limitation of 120 days is applicable to file Section 8 of the Arbitration and Conciliation Act, 1996

The Delhi High Court in the matter of SSIPL Lifestyle Private Limited vs. Vama Apparels (India) Private Limited in CS(COMM) 735/2018 decided on 19.02.2020 held that in a commercial suit, the mandatory period of limitation as applicable to filing of a written statement shall be applicable even to filing of an application under Section 8 of the Arbitration and Conciliation Act, 1996.
Facts
A suit was filed by the Plaintiff against the Defendants. After filing the written statement, the Defendants moved an application under Section 8 of the Arbitration and Conciliation Act, 1996 seeking referral of dispute to arbitration.
The said application was opposed on the ground that the application under Section 8 of the Arbitration and Conciliation Act, 1996 cannot be maintained as the period of limitation for filing of the Section 8 application has expired. It was contended that as per the provision as it exists, Section 8 application has to be filed “not later than the date of submitting his first statement on the substance of dispute”. The use of word ‘date’ in effect means that the time period available for filing of Section 8 application has to be read with the time period of filing of written statement under the CPC. If the limitation for filing of written statement expires, even a Section 8 application cannot be filed.
Issue
Whether the period of limitation applicable to filing of a Written Statement also applies to an application under Section 8 of the Arbitration and Conciliation Act, 1996
Ratio
The Delhi High Court observed that the entire emphasis in the 2016 amendments was to speed up arbitral proceedings and the change in the language of Section 8 needs to be construed in this context. The Court held that the words ‘not later than the date of submitting’ means that the date of submitting the statement on the substance of the dispute i.e. the written statement in a civil suit, is the outer limit for filing of a Section 8. Hence, in effect, there is a limitation period which is prescribed.
When read in consonance with the amendments in CPC and the enforcement of the Commercial Courts Act, the Delhi High Court concluded that the period of 120 days for filing of the written statement in commercial suits is mandatory and therefore the same limitation shall apply to filing of an application under Section 8 of the Arbitration act.