The Supreme Court of India, in a judgment dated October 14, 2025, has dismissed an arbitration petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, holding that the claim was “hopelessly barred by limitation.” The bench, comprising Justice B.R. Gavai and Justice K. Vinod Chandran, rejected the plea for the appointment of an arbitrator filed by Alan Mervyn Arthur Stephenson, a resident of the United Kingdom, against J. Xavier Jayarajan.
Case Background
The legal dispute arose from a partnership deed executed on September 20, 2014, between the petitioner, Mr. Stephenson, and the respondent, Mr. Jayarajan. This partnership followed an earlier one, dated April 10, 2008, which was between the petitioner’s sister and the respondent for a real estate business. This initial partnership was dissolved on December 22, 2008.
According to the petitioner, he invested substantial amounts totaling Rs. 2,31,85,600/- into the new partnership. The agreement stipulated that 75% of the profits were to be transferred to him. The petitioner alleged that despite the purchase of a property on May 4, 2016, no further action was taken, prompting him to seek arbitration to resolve the dispute.
Arguments of the Parties
The petitioner sought the court’s intervention to appoint an arbitrator as per the arbitration clause in the 2014 partnership deed.
The respondent contested the petition, arguing that the claim was “hopelessly barred by limitation” and therefore, an arbitrator could not be appointed.
Court’s Analysis and Findings
The Supreme Court, in its judgment authored by Justice K. Vinod Chandran, meticulously analyzed the timeline of events to determine the issue of limitation.
The Court first noted that the land in question was purchased on May 4, 2016, and the petitioner’s investments were made before this date. The first notice invoking arbitration was sent by the petitioner on December 9, 2020. The judgment states, “As on the date of notice, hence the claim for recovery of amounts was barred by limitation.”
The judgment further highlighted the petitioner’s own admissions regarding prior legal actions. The court observed that the petitioner had filed a police complaint for fraud and cheating against the respondent on May 6, 2017. Subsequently, a complaint filed under Section 200 of the Criminal Procedure Code, 1973, before the Chief Metropolitan Magistrate in Bangalore was rejected on June 16, 2017.
The petitioner pointed to a payment of Rs. 1 lakh received on August 4, 2017, as a potential fresh starting point for the limitation period. However, the Court rejected this argument, stating, “Even if limitation is computed from the said date, the claim stands barred on 09.12.2020, when the notice was issued seeking appointment of arbitrator.”
The Court also took into account the respondent’s counter-affidavit, which mentioned that a challenge to the Magistrate’s order was rejected by the Sessions Judge due to an unexplained delay of 234 days.
Furthermore, the judgment found significant delays even after the arbitration notice was issued. The petitioner first approached the High Court of Karnataka for the appointment of an arbitrator on June 22, 2022, nearly two years after the notice. That case remained pending until January 20, 2025, when it was disposed of with liberty for the petitioner to seek appropriate remedies, leading to the present petition before the Supreme Court.
Concluding its analysis, the Court held, “It goes without saying even the notice of arbitration was delayed and barred by limitation and the arbitration request itself was made two years after the initial notice.”
Final Decision
Based on these findings, the Supreme Court concluded that the claims were unequivocally time-barred. The bench ordered, “The Arbitration Petition seeking appointment of arbitrator stands dismissed.” Any pending applications were also disposed of.
