Commencement of arbitration under institutional rules determines limitation, and a duly filed claim was not time-barred.

Under section 37 of the Indian Arbitration Act, 1940, read with the Indian Limitation Act, 1908, commencement of arbitration is not confined to the deemed modes stated in section 37(3). Where the parties have adopted institutional arbitration rules requiring claims to be filed in a prescribed manner, arbitration commences when the claim is submitted to the Registrar under those rules, and limitation is assessed on that basis. On that footing, the claim was within time when the reference commenced, so limitation did not bar the arbitration and the arbitrators were not shown to have misconducted the proceedings by entertaining it.

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Issues: Whether the respondent's claim was barred by limitation when the arbitration commenced, and whether the arbitrators misconducted the proceedings by entertaining such a claim.

Analysis: Section 37(1) of the Indian Arbitration Act, 1940 applies the Indian Limitation Act, 1908 to arbitration as it applies to proceedings in court. An arbitration is not confined only to the fictional modes of commencement mentioned in section 37(3); where the parties have agreed to the institutional rules of the Tribunal of Arbitration of the Bengal Chamber of Commerce and Industry, and the claim is duly presented in the manner required by those rules, the arbitration commences when the claim is submitted to the Registrar. The subsection is therefore not exhaustive. The claim was presented within time on that footing, and the provisions of limitation did not bar the reference.

Conclusion: The claim was not barred by limitation at the commencement of arbitration, and the arbitrators did not misconduct the proceedings by entertaining it.

Final Conclusion: The application to set aside the award failed and was dismissed with costs.

Ratio Decidendi: Under section 37 of the Indian Arbitration Act, 1940, the commencement of arbitration is not confined to the deemed modes stated in sub-section (3); if the parties have adopted institutional rules for filing claims, commencement occurs when the claim is submitted in the manner prescribed by those rules, and limitation is tested accordingly.

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