19 March 2024 Arbitration Law >> Business & Commercial Law  

A recent judgment by the High Court sheds light on the commencement of the limitation period for challenging an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act).

Facts:

The appeal arose from an order passed by the District Judge dismissing an application challenging an arbitral award. The appellant contended that their appeal was filed within the limitation period prescribed by Section 34(3) of the Act. They argued they only received a certified copy, not a signed copy, of the award on August 6, 2022, and their appeal was filed on the same date.

Appellant's Arguments:

• The limitation period under Section 34(3) commences upon receipt of a signed copy of the award, as mandated by Section 31(5) of the Act.
• Their appeal, filed on the date of receiving the certified copy, adhered to the limitation period.

Respondent's Arguments:

• The appeal was demonstrably delayed by over a year since the award's issuance.
• Section 5 of the Limitation Act is inapplicable to Section 34 of the Act.

Court's Reasoning:

The High Court identified a crucial omission in the District Court's order: the absence of a finding regarding the date the appellant received the signed copy of the award. The court cited the landmark Supreme Court decision in Dakshin Haryana Bijli Vitran Nigam Ltd. vs. Navigant Technologies Pvt. Ltd., which established that the limitation period under Section 34 commences upon receipt of the signed copy, not a mere certified copy.

Court's Holding:

In light of the District Court's failure to determine the critical date of receipt, the High Court allowed the appeal. The District Court's order was quashed, and the case was remanded for further proceedings.

Remand Instructions:

The High Court directed the District Court to ascertain the date of receipt of the signed copy of the award through examination of the record. Upon determining the receipt date, the District Court is obligated to issue a fresh, reasoned order on the application challenging the arbitral award.

Significance:

This judgment underscores the paramount importance of the signed copy's receipt date in calculating the limitation period for challenging arbitration awards under Section 34 of the Act. Parties involved in arbitration proceedings should be mindful of this legal principle to ensure timely filing of any challenges.

  Arbitration and Conciliation Act, 1996