Time Spent In Mediation Would Be Excluded For The Purpose Of Calculating The Period Of Limitation For Invoking Arbitration: Delhi HC

The High Court of Delhi has observed that when the agreement between the parties provides for mandatory mediation, the time spent in the mediation process shall be excluded from the period of limitation. The Single Bench of Justice C. Hari Shankar held that the notice invoking arbitration as well as the substantive claims of a party would not become time-barred if the parties were undergoing the mediation process contemplated in the arbitration clause and the time consumed in an unfruitful mediation process shall be excluded for the purpose of calculating the limitation period. The Court held that in view of Clause 29 of the agreement, the breaking point could not arise before the efforts at mediation failed on 07.09.2020, therefore, both the reference to arbitration as well as the claims of the Respondent were within the limitation period of 3 years. The Court further referred to Article 10 of the ICC-ADR Mediation Rules which provides that parties can refer the dispute to arbitration regardless of any pending mediation unless an agreement to the contrary and observed that Clause 29 which forecloses the remedy to arbitration unless mediation failed would be an agreement within the Article 10.