Legal Review and Analysis of Alan Mervyn Arthur Stephenson vs J Xavier Jayarajan 2025 INSC 1228

1. Heading of the Judgment
Alan Mervyn Arthur Stephenson vs J Xavier Jayarajan
Citation: (2025) INSC 1228
Court: Supreme Court of India
Date: October 14, 2025
Coram: Chief Justice B.R. Gavai and Justice K. Vinod Chandran

2. Related Laws and Sections
This judgment deals with the following legal provisions:

• Arbitration and Conciliation Act, 1996: Section 11(5) (Appointment of arbitrators).

• The Limitation Act, 1963: The general law of limitation, particularly the three-year period for filing a suit for recovery of money.

3. Basic Judgment Details
This was an Arbitration Petition filed under Section 11(5) of the Arbitration and Conciliation Act, 1996. The Petitioner, Alan Mervyn Arthur Stephenson, residing in the UK, sought the appointment of an arbitrator against the Respondent, J. Xavier Jayarajan, concerning disputes arising from a Partnership Deed dated September 20, 2014. The core defense raised by the Respondent was that the Petitioner's claim was hopelessly barred by the law of limitation.

4. Core Legal Principles and Judicial Analysis

The Supreme Court's judgment centers on the critical interplay between an arbitration agreement and the statutory bar of limitation, emphasizing that an arbitration clause cannot resurrect a time-barred claim.

A. Limitation as a Ground for Dismissing an Application for Appointment of Arbitrator

• The Issue: The primary issue before the Court was whether it should appoint an arbitrator when the underlying claim raised by the petitioner appears to be ex facie (on the face of it) barred by limitation.

• The Supreme Court's Address: The Court affirmed that while the scope of inquiry under Section 11(6) is limited, it extends to examining whether the claim is manifestly time-barred. If the court finds that the claim is patently dead due to the expiry of the limitation period, it would be a fruitless exercise to refer the parties to arbitration. The Court held that in such a scenario, it is within its power to refuse the appointment of an arbitrator.

• Analysis: This approach prevents the abuse of the arbitral process by forcing parties into arbitration for claims that are no longer legally enforceable. It aligns with the principle that an arbitration agreement presupposes the existence of a live dispute that is capable of being adjudicated.

B. Application of Limitation Principles to the Facts of the Case

• The Issue: The specific question was from which date the limitation period should be calculated to determine if the Petitioner's claim for recovery of money was barred.

• The Supreme Court's Address: The Court meticulously examined the timeline of events:
  The partnership was formed on 20.09.2014.
  The land in question was purchased on 04.05.2016, and all payments by the Petitioner were made before this date.
  The Petitioner himself admitted to filing a criminal complaint for fraud on 06.05.2017, indicating he was aware of a grievance at that time.
  The last possible acknowledgment of any payment was a receipt of Rs. 1 lakh on 04.08.2017.
  The notice invoking arbitration was issued only on 09.12.2020.

• Analysis: The Court calculated that even if the limitation period started from the last acknowledged transaction on 04.08.2017, the three-year period expired on 03.08.2020. Consequently, the arbitration notice dated 09.12.2020 was filed beyond the limitation period. The subsequent petition to the High Court in 2022 and then to the Supreme Court further compounded the delay. The Court found no legally acceptable basis to exclude this period or to hold that the claim was alive.

5. Final Outcome
The Supreme Court dismissed the Arbitration Petition. It refused to appoint an arbitrator, holding that the claim raised by the Petitioner was ex facie barred by limitation and was not maintainable.

6. MCQ Based on the Judgment

1. In Alan Mervyn Arthur Stephenson vs J Xavier Jayarajan, the Supreme Court dismissed the petition for appointment of an arbitrator primarily on the ground that?
(a) The partnership deed was not legally valid.
(b) The respondent had already paid all the dues to the petitioner.
(c) The petitioner's claim was hopelessly barred by limitation.
(d) The dispute was not capable of being settled by arbitration.
(c) The petitioner's claim was hopelessly barred by limitation.

2. The petition in the aforementioned case was filed under which specific provision of the Arbitration and Conciliation Act, 1996?
(a) Section 9
(b) Section 11(5)
(c) Section 16
(d) Section 34
(b) Section 11(5)