Contractual limitation periods for invoking arbitration are void under Section 28 of the Contract Act.

The Petitioner was the successful bidder for a Northern Railway tender involving telecom works, pursuant to which two Letters of Acceptance (LOAs) were issued on 14.06.2019 and 01.07.2020

Although the work was completed and certificates were issued in 2023

disputes arose regarding the non-refund of a Performance Bank Guarantee (PBG) and a Fixed Deposit Receipt (FDR) amounting to Rs. 3,71,150/-, alongside claims for excess GST deductions

The Petitioner invoked arbitration via notices dated 14.11.2024 and 12.03.2025

The Respondent rejected the request on 29.05.2025, contending the contract was closed, the claims were previously rejected, and the Petitioner had signed a "no claim" certificate

The Petitioner subsequently filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996

1. Whether the Delhi High Court has territorial jurisdiction based on the designation of the "headquarters of the concerned railway" as the place of arbitration

2. Whether the invocation of arbitration was barred by the specific limitation periods stipulated in the contract

3. Whether the exhaustion of a pre-arbitral conciliation clause is a mandatory prerequisite to seeking the appointment of an arbitrator

4. Whether the dispute falls under "excepted matters" and is thus non-arbitrable at the Section 11 stage

Section 11(6) of the Arbitration and Conciliation Act, 1996, regarding the appointment of an arbitrator

Section 28 of the Indian Contract Act, 1872, and the precedent in Grasim Industries Limited v. State of Kerala, which establishes that contractual terms restricting the period for enforcing legal rights are void

Article 137 of the Limitation Act, 1963, setting a three-year limitation period for Section 11 petitions from the expiry of the notice period

Oasis Projects Ltd. v. NHIDCL, holding such tiers to be directory

the "prima facie" standard from Vidya Drolia v. Durga Trading Corpn., reserving the determination of "excepted matters" for the Arbitral Tribunal

The Court dismissed the Respondent’s jurisdictional objection by noting that Clause 50.1(c) designates the headquarters of the Northern Railway (Baroda House, New Delhi) as the place of arbitration, thereby fixing the seat in New Delhi

Regarding the limitation argument, the Court held that any contractual clause purporting to extinguish a party's right to claim after a specified period (e.g., 180 days) is void under Section 28 of the Contract Act; the statutory limitation is three years from the notice of invocation, which the Petitioner satisfied

Addressing the conciliation tier, the Court ruled that pre-arbitral amicable resolution procedures are directory and do not constitute a mandatory bar to invoking arbitration

Finally, on the issue of "excepted matters," the Court held that whether a claim is excluded from arbitration involves a complex factual inquiry that must be left to the Arbitral Tribunal rather than being decided by the Court during summary Section 11 proceedings

It held that a valid arbitration agreement existed and that the Petitioner’s claims were not ex-facie barred by limitation

The Court appointed Mr. Amandeep Joshi, Advocate, as the Sole Arbitrator under the rules of the Delhi International Arbitration Centre (DIAC)

It clarified that all rights and contentions, including the defense of "excepted matters" and the validity of the "no claim" certificate, remain open for adjudication by the arbitrator