ADRLimitationSupreme Court of India

HRD Corporation v GAIL (India) Limited

(2018) 12 Supreme Court Cases 47120181 min read
The case in brief30-second read
Facts
HRD Corporation had a dispute with GAIL under a supply contract. GAIL argued that the claim was time-barred (limitation expired) GAIL sought termination of the arbitrator's mandate under S.14 arguing the arbitrator was "unable to perform functions" because the claim was time-barred.
Issue
Whether an arbitrator's mandate terminates under S.14 when the underlying claim is allegedly time-barred.
Held
S.14 relates to inability to act (de jure/de facto incapacity, undue delay).
Principle
Expiry of limitation for underlying claim does not terminate the arbitrator's mandate; time-bar is for the tribunal to decide on merits under Kompetenz-Kompetenz

Facts

  • HRD Corporation had a dispute with GAIL under a supply contract
  • GAIL argued that the claim was time-barred (limitation expired)
  • GAIL sought termination of the arbitrator's mandate under S.14 arguing the arbitrator was "unable to perform functions" because the claim was time-barred
  • The question was whether expiry of limitation terminates the arbitrator's mandate

Issue

  1. Whether an arbitrator's mandate terminates under S.14 when the underlying claim is allegedly time-barred.

Held

  • S.14 relates to inability to act (de jure/de facto incapacity, undue delay).
  • Time-bar of the claim is a substantive defence on merits, not a ground for termination of mandate.
  • The tribunal has jurisdiction under S.16 (Kompetenz-Kompetenz) to decide whether the claim is time-barred.
  • Limitation is a question for the tribunal, not a jurisdictional issue terminating the mandate.

Ratio decidendi

The arbitrator's mandate terminates under S.14 only for inability to perform or undue delay. Whether a claim is time-barred is a question of law on merits that the tribunal itself must decide under its competence-competence power (S.16). It does not render the arbitrator unable to act.

Exam use

How to use it in an answer

Key line: "Time-bar of the underlying claim does not terminate the arbitrator's mandate. It is a substantive defence for the tribunal to decide under S.16."

Cite this

Citation

HRD Corporation v GAIL (India) Limited (2018) 12 Supreme Court Cases 471

Reported: Supreme Court judgment. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.