2006 Supreme(Bom) 826

IN THE HIGH COURT OF BOMBAY
Deshmukh D.K., J.
Noy Vallesina Engineering Spa ... Petitioner.
Versus
Jindal Drugs Limited ... Respondent.
Notice of Motion No. 826 of 2006 in Arbitration Petition No. 156 of 2005,
decided on 5-6-2006.
Advocates appeared:
F.Dvitre with Gaura Joshi, Devesh Juwekar, Vigu1 Gabriel i/b. Anil Agarwal, for petitioner.
Dr. V.V. Tulzapurkar with Anand Desai, Sajit Suvarna & Munaf Virjee i/b. D.S.K. Legal, for respondent.

Headnote:Arbitration and Conciliation Act, 1996 - Sections 47 and 48 Foreign Award Enforcement of Award passed on 20.10.2001 Received on 06.11.2001 Enforcement of sought on 10.02.2005 Objected Provisions of Limitation Act applicable to application filed under Section 47 of Act for enforcement of Foreign Award. The observations of the Supreme Court that in the absence of any specific limitation provided under the Mamlatdars Courts Act, the provisions of the Limitation Act stands excluded, have to be read in the light of the judgment of the Division Bench referred to above which was followed by the learned Single Judge whose order has been confirmed by the Supreme Court in its judgment in "Uttam Namdeo Mahale" case. So far as the judgment of the leaned single Judge in the case "Oil & Natural Gas Corporation Ltd. v. M/s. Jagson International Ltd. is concerned, in that case, the Court was considering the question whether the period of limitation provided by Section 34 of the Act for making an application challenging a domestic Award made by the Arbitrator is applicable to an appeal filed under Section 37. The Court negatived that contention holding that the period provided for filing an application under Section 34 of the Act cannot be made applicable to an appeal under Section 37 of the Act because the Act does not make such a provision. The Court also referred to the provisions of the Limitation Act and found that there is no article in the Schedule to the Limitation Act providing period of limitation for filing appeal under Section 37 of the Act and therefore, on finding that there is no period of limitation provided either under Section 37 of the Arbitration Act or in the Schedule of the Limitation Act and also there is no residuary provision in relation to appeals like the residuary provision under Article 137 in relation to application, the Court after referring to the judgment of the Supreme Court in "Uttam Namdeo Mahale" case has held that there is no period of limitation prescribed by Section 37 of the Arbitration Act for filing an appeal. Courts do not see any findings recorded by the Single Judge that the provisions of the Limitation Act are not applicable to an appeal filed under Section 37 of the Arbitration and Conciliation Act. The Court in that judgment has, on the contrary, held that sub-section (1) of Section 43 makes the provisions of Limitation Act applicable to arbitration as it applies to proceedings in Court, implying thereby that the provisions of the Limitation Act are applicable to the proceedings in Court. But even under the Limitation Act as there is neither specific provision providing for a period of limitation for filing appeal under Section 37 of the Arbitration Act or a general residuary provision like Article 137, has held that law does not prescribe any period of limitation for filing an appeal under Section 37 of the Act. It is thus clear that, in view of the provisions of the Arbitration Act and the Law laid down by the Supreme Court in its judgments referred to above, it cannot be said that the provisions of the Limitation Act are not applicable to an application filed under Section 47 of the Act for enforcement of a foreign Award.

       Arbitration and Conciliation Act, 1996 - Sections 47, 48 and 49 Limitation Act, 1963, Section 5 Foreign Award Execution of Award passed on 22.10.2001 Received on 06.11.2001 Application for execution filed on 10.02.2005 Delayed by 3 months and 2 days Condonation of delay Application for Contending change of counsel Not filed under bona fide impression that Arbitration Act not provide any period of limitation Explanation for delay cannot be termed as mala fide Delay in filing application deserves to be condoned. According to the petitioner, the petitioner was under a bona fide belief that because now the appeal is pending, he cannot file petition for enforcement of the Award. But during the pendency of the petition, the petitioner changed its lawyer who considered the matter afresh and advised the petitioner that pendency of the appeal does not come in the way of the petitioner filing petition for enforcement of the Award and therefore, acting on that advise the petitioner filed the present petition. According to the petitioner, the delay occurred because of the bona fide belief of the petitioner that he cannot file a petition for enforcement of the Award till the appeal is pending. The petitioner was also under bona fide impression that the Arbitration Act does not provide for any period of limitation for making an application for enforcement of foreign award. The petitioner claims that he was under a bona fide belief that even if the Limitation Act applies the period of limitation for making an application for execution is 12 years and therefore, this petition was not filed earlier. It is submitted that in any case it cannot be said that the petitioner has not filed his petition for enforcement of the Award with mala fide intention, because the petitioner is holding the Award and therefore, obviously the petitioner is interested in its enforcement. Therefor e, unless the petitioner was under a bona fide belief that it cannot make an application for enforcement of the Award it would not have withheld making an application for enforcement. On behalf of the respondent it is submitted that though the petitioner claims that it was under the belief that as the petition filed by the respondent was pending and then appeal was pending therefore, he could not make an application. The petitioner has given explanation which is incapable of acceptance about change of the lawyer by the petitioner and that on receiving fresh advice from that lawyer application was filed. It is submitted in the affidavit filed in support of the notice of motion a statement is made that the petitioner changed the lawyer on or about 25.01.2005. However, the affidavit in support of the motion itself is sworn on 25.01.2005. It was submitted that a false reason has been given and the true facts have been suppressed by the petitioner for seeking condonation of delay. After going through the affidavit filed in support of notice of motion, Court finds that there is definitely a mistake committed by the petitioner in stating as to when they received advice that they can file petition for enforcement of the Award even when the Appeal filed by the respondent is pending. In Courts opinion, however, even if that aspect is totally ignored then also delay in filing the present petition deserves to be condoned. It is contended on behalf of the petitioner that because the Arbitration Act does not provide for any period of limitation, they were under the bona fide impression that there is no period of limitation prescribed and even assuming that there is period of limitation provide because it is a execution application the period of limitation is 12 years. I have considered both the questions in this very judgment above and Court find that it cannot be said that the belief of the petitioner either that there is no period of limitation prescribed or that the period of limitation would be 12 years was not bona fide. The least that can be said is that the question as to whether any period of limitation is prescribed for making an application for enforcement of the Foreign Award and if there is period of limitation prescribed what would be that period of limitation, was not a question free from doubt. Therefore, in my opinion, the delay deserves to be condoned.

       Arbitration and Conciliation Act, 1996 - Sections 47, 48 and 49 Limitation Act, 1963, Articles 136 and 137 Foreign Award Enforcement of Period of limitation Award passed on 22.10.2001 Received on 06.11.2001 Application for enforcement made on 10.02.2005 Period of limitation for making application governed by Article 137 of Act Period of Limitation of three years started running from 07.11.2004 Over on 07.11.2004 Application delayed by 3 months and 2 days. In Courts opinion, if a person in whose favour the Foreign Award is made desires to make an application for execution of that Award when the Court is yet to record its satisfaction that the Award is enforceable, the period of limitation for making such an application would be governed by Article 137 of the Schedule of the Limitation Act. According to Article 137, the period of limitation is three years from the date when the right to apply accrues. In the present case, right to apply for execution/enforcement of the foreign award would accrue to the petitioner when the final award was made on 22.10.2001. The final award was received by the petitioner on 06.11.2001. On receiving the Award the petitioner became entitled to seek enforcement of that Award. Therefore, the period of limitation will start running from the date on which the right to apply accrues. The right to apply accrued on 06.11.2001. Therefore, the period of limitation started running from 07.11.2001 and the period of three years would be over on 07.11.2004. The present petition has been lodged in the Court on 10.02.2005. Thus there is a delay of three months and about two days in filing the application.