The Madras High Court in the case M/s. Radha Meditech v. M/s Cook India Medical Devices Pvt Ltd observed while disposing a of a Section 11 application for the appointment of an arbitrator filed under the Arbitration and Conciliation Act, the court followed a procedure adopted by the Supreme Court in Bharat SancharNigam Limited and another Vs. Nortel Networks India Private Limited. The Supreme Court in the said case has held that when there is no vestige of doubt that the claim was ex facie time barred, the same must be referred to arbitration. Therefore, when there being even the slightest of doubt, the rule was to refer to arbitration. In the present case, the respondent Cook India Medical Devices Pvt Ltd entered into an agreement with the petitioner company Radha Meditech for the distribution of its equipment. Hence, the arbitral dispute emerged between the two which led to termination of contract by Cook on 7th June 2016. Therefore, Radha returned the unsold products to Cook on 27.10.2017. Further, the court observed while owing to the arbitral dispute, the arbitration clause was being invoked by Radha and a notice was sent to Cook on 06.10.2021. It has been responded by the Cook to the notice by reply dated 21st October 2021 and denied arbitral disputes on merit and called upon withdrawal of invocation notice. The bench comprising of Justice M Sundar in the present case noted that the primary consideration was whether the case being an “ex-facie which is barred by limitation”. For the same, the date of reckoning had to be looked into. The reckoning date has to be debatable as the unsold items were not immediately returned after termination of the contract. It was found that even after the return of such items found to be in a bad condition and were returned to Radha. Though, it has been claimed by Radha that it was a post termination obligation, the court noted that the same was a mixed question of law and fact. Further, it has been noted by the court to that since Article 137 and Article 55 of the Limitation Act does not talk about the date of “first accrual” or “first breach”, such investigation needs to be concluded for deciding of the reckoning date weather the said claim was barred by limitation. Thus, the Nortel principle has been applied by the court and has noted that since there were doubts with respect to the date of reckoning which needed serious consideration, while the proper thing was referring the matter to arbitration. Therefore, the court deems fit and proper to come to the conclusion that this is a case where the question of limitation should also be left open to be raised and the same has to be decided by Hon’ble Arbitral Tribunal to be appointed (infra) in the case on hand. The court followed the decision of the Supreme Court in the case Vidya Drolia & Ors. v. Durga Trading Corporation wherein the Apex Court bench comprising of threejudge had held that whenever there is a doubt, a Section 11 reference should follow. The said court also reminded itself about Vidya Drolia case i.e., Vidya Drolia & Ors. Vs. Durga Trading Corporation, wherein reporting for the limited purpose of saying that a three Member Bench of Hon’ble Supreme Court has made it clear that as regards reference qua arbitration when in doubt, the court would refer Section 11. Thus, the case of Vidya Drolia also persuaded this court for making a reference. Accordingly, the procedure for appointing an arbitrator was not followed by the parties. Therefore, the court appointed Justice K Chandru, former Judge of Madras High Court as the sole arbitrator and requested him to enter upon reference and adjudicate upon the disputes between the parties.
