SC holds arbitration plea in a real estate partnership dispute as barred by limitation; notice invoking arbitration filed three years too late.
Meetu Kumari | Nov 8, 2025 |
SC Dismisses Arbitration Plea; Partnership Dispute Declared Time-Barred After Long Delay
The petitioner, Alan Mervyn Arthur Stephenson, a UK resident, entered into a partnership with the respondent, J. Xavier Jayarajan, for a real estate venture through an agreement dated 20 September 2014. Under Clause 6 of the agreement, 75% of profits were to be allocated to the petitioner. He alleged that after investing Rs. 2.31 crore, no progress was made on a property purchased on 04 May 2016, prompting him to seek arbitration under Section 11(5) of the Arbitration and Conciliation Act, 1996.
The respondent opposed the petition, arguing that the claim was hopelessly barred by limitation. The record showed that the petitioner had lodged a police complaint in May 2017 and a criminal complaint under Section 200 CrPC, which was dismissed in June 2017. Even counting from the last alleged payment received on 04 August 2017, the demand notice invoking arbitration was issued only on 09 December 2020, far beyond the three-year limitation period.
Main Issue: Whether the petitioner’s request for appointment of an arbitrator under Section 11(5) was maintainable when the underlying claims were already barred by limitation.
SC Held: The Bench dismissed the arbitration petition, holding that both the notice invoking arbitration and the subsequent petition were filed well beyond the prescribed limitation period. The Court observed that the cause of action arose latest by August 2017, and the arbitration notice in December 2020 was thus legally untenable.
The Supreme Court also noted that the petitioner’s criminal proceedings and delayed appeals could not extend or revive limitation under the Arbitration Act. Further, the petitioner approached the Karnataka High Court only in June 2022, which itself disposed of the matter in January 2025, leaving it open to seek appropriate remedies. The Court concluded that the arbitration request was irretrievably time-barred and dismissed it accordingly.
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