Delhi High Court Affirms Strict Arbitration Act Deadlines, Dismisses Belated Challenge to Award.


07 April 2025 Arbitration Law >> Business & Commercial Law  

The Delhi High Court has dismissed an appeal seeking to condone a significant delay in challenging an arbitral award, reinforcing the stringent limitation periods prescribed under the Arbitration and Conciliation Act, 1996 (A&C Act). The Court emphasized that the object of expeditious dispute resolution through arbitration cannot be defeated by parties raising belated pleas of non-receipt or challenging prior representations.

The case involves an appeal filed under Section 13 of the Commercial Courts Act, 2015, read with Section 37 of the A&C Act, challenging an order dated October 18, 2024. The impugned order, passed by the District Judge (Commercial Court-01), East District, Delhi, dismissed an application to condone a delay of 287 days in filing a petition under Section 34 of the A&C Act, which sought to set aside an Arbitral Award dated June 3, 2019.

 
 

The appellant, Kiran Suran, argued that she was unaware of the arbitration proceedings or the impugned award until she received a notice in an Execution Petition on April 6, 2021, along with an incomplete copy of the award. She claimed she had never received any formal notice from the Sole Arbitrator or other parties regarding the proceedings. The appellant asserted that she had pursued objections in the Execution Petition in good faith, which were ultimately dismissed as non-maintainable on December 21, 2021. She then filed the Section 34 petition on April 18, 2022.

A crucial point of contention for the appellant was her claim that a General Power of Attorney (GPA) dated December 14, 2008, allegedly executed by her in favor of her mother, Smt. Indira Chopra, to represent her in the arbitration after her father's death, was forged. The appellant stated she did not recall executing such a document and noted that her father's cremation occurred on the alleged date of the GPA's execution.

However, the Trial Court, and subsequently the High Court, focused on several pieces of correspondence. A legal notice dated September 24, 2019, from Smt. Indira Chopra's counsel, explicitly referred to the Arbitral Award dated June 3, 2019, and requested the appellant to execute documents in compliance with it. The appellant's husband, on her behalf, sent a reply on October 7, 2019, which, while stating it was "without prejudice," indicated awareness of the award and even expressed a desire for its "early compliance," without demanding a copy of the award itself. Subsequent correspondence continued in a similar vein, with the appellant complaining about delays in the award's implementation.

The High Court meticulously analyzed Section 34(3) and Section 31(5) of the A&C Act, which govern the limitation period for challenging an award and the obligation of the arbitral tribunal to deliver a signed copy of the award to each party. Citing various Supreme Court judgments, including Union of India v. Tecco Trichy Engineers & Contractors, State of Maharashtra & Ors. v. ARK Builders (P) Ltd., and Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., the Court reiterated that limitation commences from the date a signed copy of the award is "received" by the party.

Crucially, the Court held that a signed copy of the award received by a person representing the party, such as a Power of Attorney holder who participated in the proceedings, constitutes due service under Section 31(5) of the A&C Act. Since Smt. Indira Chopra represented the appellant in the arbitration proceedings based on the alleged Power of Attorney and received the award, the Court inferred that service was complete. The Court further noted that the question of the GPA's authenticity could not be determined in a Section 34 petition to set aside the award.

The Court concluded that the appellant's correspondence clearly showed awareness of the award and even a desire for its implementation, undermining her claim of non-receipt. This conduct, including the failure to demand a copy of the award and instead complaining of delays in its execution, negated her stand.

Furthermore, the High Court rejected the appellant's reliance on the Supreme Court's orders extending limitation periods due to the COVID-19 pandemic, as the impugned award was from June 2019, and the extended periods would have passed long before those orders came into effect. The plea for exclusion of time under Section 14 of the Limitation Act was also dismissed, as the initial proceedings relied upon were themselves filed beyond the maximum condonable period under Section 34(3) of the A&C Act.

In dismissing the appeal, the Delhi High Court underscored that allowing such belated challenges would defeat the very object of the A&C Act, which aims for expeditious resolution of disputes through arbitration.


Arbitration and Conciliation Act, 1996  

Limitation Act, 1963