Voltas Limited v. Rolta India Limited

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 2073 of 2014)Decided 14 Feb 2014
Civil Appeal No. 2073 of 2014
Justice Anil R. Dave · Justice Dipak Misra

Background

Disputes under construction and air-conditioning contracts went to arbitration after termination. Rolta filed counterclaims years later, having earlier notified specified losses and sought arbitration. The arbitrator rejected the counterclaims as time-barred, while the High Court allowed them to proceed in their entirety.

Decision Breakdown

The Court allowed the appeals partly and limited the counterclaims to the amounts stated in the earlier notices. A counterclaim is ordinarily tested for limitation when filed before the arbitrator, but an earlier notice making the claim and seeking arbitration can supply the relevant date. Rolta's communications satisfied that exception for the notified claims. Its substantially increased later claims did not receive the same protection and were time-barred. The arbitrator was directed to determine the surviving claims, without any Supreme Court decision on their underlying merits.

Lesson Learnt

A party should specify its counterclaim and seek arbitration within time. An earlier arbitration notice can preserve the notified claim but does not automatically preserve a much larger claim added later.

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