Acknowledgment of liability in meeting minutes effectively extends limitation under Section 18 of the Limitation Act.

The Appellant entered into a Berth Reservation Agreement with the Respondent Port on 18.01.1995

In 1997, disputes arose regarding overpayments and penal levies for container throughput shortfalls

The Appellant paid the demanded sums under protest on 27.03.1997 and simultaneously invoked the arbitration clause

The Respondent initially refused arbitration, claiming no dispute existed, while threatening contract termination

Following several internal acknowledgments of over-collection by Port officials (Traffic Manager, FA&CAO, and Chairman) between 1998 and 2000

a meeting on 04.04.2000 recorded an admission of liability to refund certain charges

The Appellant filed an application under Section 11 of the Arbitration & Conciliation Act in October 2000

After protracted litigation regarding the appointment of arbitrators

an Arbitral Award was passed on 17.01.2009 in favor of the Appellant

A Single Judge set aside this Award on 17.09.2020, citing limitation and patent illegality

The Appellant filed this appeal against that setting-aside order.

1. Whether the claim was barred by the law of limitation, particularly regarding the effect of internal acknowledgments and the commencement of proceedings

2. Whether the Arbitral Award suffered from "patent illegality" due to alleged lack of evidence or incorrect quantum computation

The court primarily applied Section 21 of the Arbitration and Conciliation Act, 1996, which stipulates that arbitral proceedings commence on the date a request for arbitration is received by the respondent

It further relied on Section 18 of the Limitation Act, 1963, specifically Explanation (a), which establishes that a written acknowledgment of liability is sufficient to start a fresh period of limitation even if addressed to a third party or omits the exact nature of the right

Regarding the scope of judicial interference, the court applied the principles from *Ssangyong Engineering and Construction Co. Ltd. v. NHAI*, which restricts "patent illegality" to cases of perversity or conclusions based on no evidence

The Court found that the Single Judge erred in calculating limitation.

While the formal Section 11 petition was filed in 2000, the "commencement" under Section 21 occurred on 27.03.1997 when the Appellant first requested arbitration

Crucially, the Court held that the internal minutes of the Respondent’s Advisory Committee dated 04.04.2000 served as a valid "acknowledgment of liability" under Section 18 of the Limitation Act, as it was made in the presence of the Appellant’s Association representative and subsequently communicated, thereby resetting the limitation period

Furthermore, the Court noted that the period between 2000 and 2005, during which the Respondent challenged the Section 11 appointment through writ petitions, must be excluded

On the merits, the Court rejected the "patent illegality" argument, finding that the Arbitral Tribunal had sufficient evidence based on the Respondent’s own internal admissions of over-collection and the oral testimony of the Appellant's witness

The Court emphasized that a Section 34/37 court cannot re-appreciate arithmetical intricacies if the underlying liability is admitted

It held that the claim was within the limitation period due to repeated acknowledgments by Port officials and that the Award did not suffer from patent illegality

The Court set aside the Single Judge’s order dated 17.09.2020, restored the Arbitral Award dated 17.01.2009 in its entirety, and allowed the appeal with costs