Authority: High Court of Jammu & Kashmir and Ladakh, Srinagar

Order Date: 06.10.2026

Case Overview

  • Parties: Appellant – Kamal Krishan Chibber (individual contractor); Respondents – UT of Jammu & Kashmir (through Chief Secretary), Commissioner Secretary, Power Development Department, Managing Director, Power Development Corporation, Chief Engineer (Generation), Executive Engineer (Civil Maintenance Division).
  • Nature of Proceeding: Appeal under Section 37 of the Jammu & Kashmir Arbitration and Conciliation Act, 1997 against a judgment dated 04.07.2024 that had set aside a sole arbitrator’s final award dated 31.12.2018 in favour of the appellant.
  • Background: The appellant was awarded a contract (Letter of Award No. USHP‑II/EC/27 dated 30.06.1988) to execute balance work of Wangat Weir at USHP‑II, Kangan, with a stipulated completion date of 30.11.1989, later extended to 1992. The work was terminated on 05.05.1998; only Rs 113.00 lakhs of the Rs 199.06 lakhs contract value were completed up to 01.04.1994.
  • Claims Presented: The appellant sought escalation costs (Rs 21,43,536), final bill amount (Rs 76,865), flood damages (Rs 24,25,987), diversion of Nallah (Rs 11,32,774), security deposit and earnest money (Rs 8,05,000), and interest @18% compounded (Rs 1,77,77,237). He also claimed refund of deductions (Rs 7,75,000) and earnest money (Rs 50,000).
  • Arbitration History: A sole arbitrator (Mr. G.M. Dar) was appointed on 04.11.2013 (AA No. 19/2013). The arbitrator’s interim award dated 20.01.2015 confirmed escalation amount of Rs 21,43,536. The final award dated 30.12.2018 granted the appellant:
  • Restoration work: Rs 25,75,036
  • Earnest money: Rs 50,000
  • Security deposit: Rs 8,10,000
  • Escalation: Rs 21,43,536
  • Final bill: Rs 76,865
  • Interest at 6% p.a. until award and 18% thereafter, plus arbitrator’s fee of Rs 1,00,000.
  • Subsequent Litigation: Respondents challenged the interim award under Section 34; the challenge was dismissed as time‑barred on 08.02.2017. The Single Bench upheld that dismissal on 21.09.2023.
  • Grounds of Appeal: Respondents argued the claims were stale, the flood‑damage claim fell under a force‑majeure clause, interest award conflicted with statutory provisions, and the interim award should not merge with the final award.
  • Key Legal Issues Discussed:
  • Accrual of cause of action – court held it arose on contract termination (05.05.1998) and the last opportunity to claim was 12.09.2000, making the 04.11.2013 arbitration filing time‑barred.
  • Application of Section 19 of the J&K Limitation Act – court rejected the appellant’s contention that the 12.09.2000 communication or the 26.02.2011 final bill constituted a valid acknowledgment resetting limitation.
  • Public policy – time‑barred claims violate public policy under Section 34(2)(b)(ii) of the Arbitration Act.
  • Waiver of limitation defence – court held that respondents’ participation in arbitration without raising limitation did not constitute a waiver.
  • Court’s Findings:
  • All claims except the escalation amount (covered by the interim award) were barred by limitation.
  • The interim award of Rs 21,43,536 stands and may be executed.
  • The arbitrator’s fee of Rs 1,00,000 is payable.
  • No error in the Single Bench’s reasoning was identified.

Final Outcome

  • The appeal is dismissed. The entire award dated 31.12.2018 is set aside except for the arbitrator’s fee of Rs 1,00,000. The interim award of Rs 21,43,536 for escalation is upheld and may be executed. No costs are awarded.

Topics: Arbitration, Limitation, Public Policy