2006 Supreme(SC) 1255

2007(1) Supreme 98
SUPREME COURT OF INDIA
(From Bombay High Court)
Dr. AR. Lakshmanan and Tarun Chatterjee, JJ.
Oil & Natural Gas Corporation Ltd.—Appellant
versus
M/s Nippon Steel Corporation Ltd.—Respondent
Civil Appeal No. 4699 of 2006
(Arising out of SLP (C) No. 7294 /2006)
Decided on 7-11-2006
Counsel for the Parties :
For the Appellant : Gopal Subramanium, A.S.G., K.R. Sasiprabhu, Sreegesh M.K. and Abhishek Tewari, Advocates.
For the Respondent : Ashok H. Desai, Sr. Advocate, Dr. Aman M. Hingorani and Ms. Priya Hingorani (for M/s. Hingorani & Associates), Advocates.

IMPORTANT POINT
Filing of the arbitration award by the counsel of a party in the Court is not the deemed notice u/s 14(2) of the Arbitration Act, 1940 and the limitation for setting aside the said award at the instance of that party shall not commence from that date.

Headnote:Arbitration Act, 1940—Section 14(2)—Civil Procedure Code, 1908—Order III Rule 5—Counsel for a party filing arbitration award in Court at the instance of the arbitrator—Whether limitation for setting aside the said award at the instance of that party shall commence from that date—(No)—Notice regarding filing of the award must be some act of Court—Period of limitation will start running from the date the notice has been given by the Court u/s 14(2) of the Act—Appellant and respondent Corporation entered into a contract for transportation and installation of fabricated structures—Disputes and differences between the parties were arbitrated—Filing of arbitration award dated 2.3.1996 by the advocate of appellant Corporation in the Court on 23.3.1996—Court on 9.5.1996 issued a notice to the parties about the filing of the award which was received by appellant on 14.6.1996—Appellant filed an application for setting aside the award on 12.7.1996—High Court rejected appellant’s petition as time barred holding that appellant had knowledge of filing of award much prior to the date of notice to them by the Court—Whether filing of award by the counsel of advocate on behalf of the arbitrator is the deemed notice u/s 14(2) of the Act—(No)—Whether limitation for setting aside the said award at the instance of appellant shall commence from that date—(No)—Whether provisions of Order III Rule 5, CPC are applicable.

       Held : The plain and simple language of the above provision requires firstly that the arbitrators/umpire, as the case may be, shall:

       (a)sign the award they make

       (b)give notice in writing to the parties of the making and signing of the award

       (c)cause the award along with the records be filed in Court

       Thereupon the Court shall:

       (d)give notice to the parties of the filing of the award

       (e)if a special case is referred to court, shall pronounce its opinion, after giving notice to the parties and hearing them.

       On 23.3.1996, M/s Little & Co., the advocates, as per the request of the Arbitrator filed an award in the Court on behalf of the Arbitrator. The Court, on 9.5.1996, issued a notice to the parties about the filing of the award which was received by the appellant on 14.6.1996. The appellant, on the receipt of the notice from the Court, moved an application for setting aside the award on 12.7.1996. The learned single Judge rejected the petition of the appellant solely on the ground that the same was time barred as the appellant had knowledge of the filing of the award much prior to the date of notice to them by the Court.(Paras 5 and 6)

       The fact that M/s Little & Co. on the panel of the advocates of the appellant does not determine its representative capacity at the time of filing of the award. Panel lawyers are not standing counsel for the ONGC in the High Court. Panel lawyers services are availed of, on a case to case basis. M/s Little & Co. filed the award acting as the agent of the arbitrator and while doing this ministerial act of filing of the award on behalf of the Arbitrator they were not acting in their capacity as the counsel of the appellant. (Para 21)

       The law requires the arbitrator to file the award before the competent Court. The Arbitrator can discharge this legal duty by himself or through an agent who happened to be an appellants counsel in the Arbitration. The fact that the counsel had filed the award at the express request of the arbitrator reflects that the counsel was acting as a representative of the Arbitrator at the time of filing of the award and was discharging any professional service as a lawyer to the appellant. In fact, as contended by the learned ASG appearing for the appellant, that the appellant had occasioned to appoint M/s Little & Co. to act as its lawyer before the High Court even before the award was filed. Since the appellant had no intention to get the award filed in Court, there was no question of appointing M/s Little & Co. to coordinate with arbitrator to obtain the award and file the same before the court. Therefore, in our view, the knowledge of the said lawyer about the filing of the award is not a notice, either actual or constructive to the appellant. (Para 22)

       In our view, the principles enshrined in Order III Rule 5 C.P.C. is not applicable to the facts of the instant case. The principles embodied in the said Rule is only applicable in cases where the counsel acts on behalf of his client and where the counsel in its representative capacity represents its client. In the instant case, by filing the award at the instance of the arbitrator, the counsel is acting as a representative of the arbitrator and was not acting as a representative of the appellant and, therefore, the presumption envisaged by the said Rule cannot be stretched to situations where the pleader is not acting on behalf of the party.(Para 23)

       The doctrine of constructive notice cannot be extended to acts that are performed at the instance of a third party. As already stated and noticed, that at the time of filing of the award M/s Little & Co. was acting at the instance of the arbitrator i.e. a third party. This sine qua non for application of the principle of constructive notice is that the counsel should have acted as a representative of the party. Since the award was filed at the instance of the arbitrator and on his express request, the counsel was acting as a representative of the arbitrator and not as a representative of the appellant. (Para 27)