Limitation under exchange regulations barred the arbitral reference, as the dispute arose on cheque dishonour and the award was set aside.

A claim referred to arbitration under exchange regulations was held barred by limitation because Regulation No. 5 imposed a three-month period from the date the dispute arose. The dispute arose, at the latest, when the cheques were dishonoured and recovery steps were taken, and not when the cheque-validity period later expired. The exchange bye-laws contained no inconsistent limitation rule, so the regulatory time limit governed the reference. As the reference was made after the three-month period had expired, the claim was time-barred, the dispute was not arbitrable, and the award was set aside.

---

---

Issues: Whether the arbitral claim was barred by limitation under Regulation No. 5 of the exchange regulations and, if so, whether the award could stand.

Analysis: Regulation No. 5 prescribed a three-month period from the date on which the dispute arose. The dispute, at the latest, arose when the cheques were dishonoured and the respondent itself took recovery steps in August 1997. The respondent's attempt to postpone accrual of the cause of action until expiry of the cheque-validity period in December 1997 was rejected. The exchange bye-laws were found not to contain any provision inconsistent with Regulation No. 5 on limitation, and therefore the regulatory limitation period governed the reference. On that basis, the reference made in March 1998 was beyond time.

Conclusion: The claim was time-barred, the dispute was not arbitrable, and the award was set aside in favour of the petitioner.

---