Hyderabad | June 16, 2025 

The Telangana High Court has ruled that the mere passage of time does not nullify a party’s right to invoke arbitration, so long as the arbitration clause in the agreement remains valid, enforceable, and unrevoked.

 

The decision came from Justice K. Lakshman, who was hearing a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, concerning the appointment of an arbitrator in a delayed commercial dispute.

 

 

The case arose out of a contractual dispute between two private entities, wherein the petitioner sought arbitration after an extended period of failed settlement talks. The respondent opposed the petition, arguing that the claim was time-barred due to an inordinate delay and that the arbitration clause could no longer be enforced.

 

However, the Court clarified that negotiations, failed settlements, or delay in invoking arbitration do not automatically render an arbitration clause void or inoperative.

 

 

 

 

The Court added that limitation concerns may be raised before the arbitral tribunal, but they cannot be used to block the appointment of an arbitrator under Section 11(6).

 

It also held that the existence and validity of the arbitration clause must be tested independently of the delay in invoking it.

 

 

• Arbitration Clause Survives: The Court reaffirmed that an arbitration clause is a standalone agreement and survives even if the main contract is disputed.

• Referral to Arbitrator: Any contention regarding limitation must be decided by the arbitrator and not at the stage of court intervention under Section 11.

 

This ruling reinforces the judiciary’s commitment to upholding the autonomy of arbitration clauses and discourages parties from using procedural delays as a means to escape arbitration obligations.

 

It also aligns with the broader legal trend of minimizing judicial interference in arbitration matters, particularly during the pre-arbitral stage.