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Limitation on amendment of Statement of Claim in Arbitration

In O.M.P. (COMM) 31/2017 & I.A. 13479/2018, M/S CINEVISTAAS LTD. vs M/S PRASAR BHARTI, the Delhi High Court has held that claims which are raised at the time of invoking arbitration but are not part of Statement of Claim, are not time-barred by limitation.

The Petitioner had undertaken production of a game show titled ‘Knock Out’. After negotiations, the Respondent approved telecast of 52 episodes of the programme and the final telecast date was decided as January 28, 2001. Subsequently, television promos were aired and advertisements were also published. However, on December 27, 2000, the Respondent informed the Petitioner that the show would not be aired.

The Petitioner then sought appointment of an independent Arbitrator by filing a Section 11 petition to resolve the dispute and in May, 2004, an Arbitrator was appointed.

While the arbitral proceedings were pending, the Petitioner realised that there were substantial errors in the quantification and details of two claims. It, therefore, moved an application seeking permission to correct the said claims.

The application was dismissed in August 2009. The Arbitrator held that the changes sought to be made constituted ‘additional claims’. Since the notice invoking arbitration was issued in November 2003 and the incorporation of these additional claims was being sought in 2008, the application was barred by limitation.

The Delhi High Court held that the law relating to amendments is very clear i.e., that the Court has to be very liberal while considering amendments. This would equally apply to arbitral proceedings, which are not bound by the strict provisions of CPC and that after having noticed the fact that the additional claims now raised, were contained in the invocation letter, as also in the Section 11 petition, there was no reason why the same ought not to have been allowed.

The Court then referring to the judgment of the Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania & Anr. (1981) 4 SCC 8, decided that the order of the Ld. Arbitrator clearly has a finality attached to it, in respect of the additional claims, and is, thus, held to be an award, against which a Section 34 petition is maintainable. 

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