Refusal to participate in arbitration proceedings and time limitation for challenging an Arbitral Award under Section 34 of the Arbitration and Conciliation Act, 1996.

1. The above Arbitration Petition is filed by the Petitioner on 19th January, 2011, challenging the Arbitral Award dated 19th August 2009, under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”). The Award was dispatched to the Petitioner by the Hindustan Chamber of Commerce on 4th September 2009. However, on 7th September 2009 the Petitioner refused to accept service of the said Award.

2. The brief facts of the matter are set out hereunder:

3. By a letter dated 2nd February 2009, the Respondent informed the Hindustan Chamber of Commerce that they have sold and supplied goods to the Petitioner at G111, RIICO Industrial Area, Mansarovar, Jaipur-302 020, Rajasthan vide their various invoices, particulars of which were set out in the said letter and the total outstanding after giving credit for the part payment received, along with interest thereon amounted to Rs. 53,99,688/-. The Respondent requested the Hindustan Chamber of Commerce to use their good offices to collect the genuine dues of the Respondent from the Petitioner as early as possible. The Respondent recorded in the said letter that if no satisfactory reply is received within seven days from the receipt of the said letter/notice, the Respondent will have no other option but to put their dispute before the Learned Arbitrators of the Hindustan Chamber of Commerce, for their decision under its Arbitration Rules.

4. The bills raised by the Respondent on the Petitioner which were submitted by the Respondent to the Arbitral Tribunal, clearly stipulated as follows:

“Any dispute if any relating to this transaction will be subject to the Arbitration Rules, Hindustan Chamber of Commerce, Mumbai only.”

5. The Hindustan Chamber of Commerce by its letter dated 10th February 2009, addressed to the Petitioner, forwarded a copy of the letter dated 2nd February 2009, received from the Respondent and informed the Petitioner that as set out in the said letter, the Petitioner is requested to remit the balance outstanding amount of Rs. 53,99,688/-to the Respondent within one week, failing which the Respondent would be taking out appropriate legal/arbitration proceedings against the Petitioner as they deemed fit.

6. On 3rd April 2009, the Respondent filed an application before the Hindustan Chamber of Commerce which was received by the Chamber on 8th April, 2009, registering their dispute against the Petitioner and requesting the Hindustan Chamber of Commerce to settle the said dispute. The Respondent appointed Shri Parameshwarji Tapadia as their Arbitrator and also forwarded the names and addresses of the Directors of the Petitioner Company.

7. The Hindustan Chamber of Commerce by its letters dated 13th April 2009, separately addressed to the Petitioner and the three Directors of the Petitioner, inter alia informed them that the Respondent had filed a dispute against them before the Hindustan Chamber of Commerce. A copy of the said dispute along with the list of their panel Arbitrators was enclosed with the said letter with a request to the Petitioner to appoint their arbitrator within a period of 15 days failing which the Arbitration shall proceed under Rule 7 (k) of the Hindustan Chamber of Commerce Rules. The said letters were sent by Registered Post as well as by Certificate of Posting to the Petitioner and its Directors. From the original acknowledgement cards produced by the Hindustan Chamber of Commerce, it is clear that the said letters were received by the Petitioner as well as its Directors.

8. Since the Petitioner and/or its Directors failed to appoint an Arbitrator, the Secretary, Hindustan Chamber of Commerce under Rule 7(k) of its Rules appointed Shri Rajendraprasadji Bhauwala as an Arbitrator on behalf of the Petitioner.

9. On 18th June 2009, the Petitioner as well as its Directors were once again informed in writing that they should remain present before the learned Arbitrators on 6th July 2009 at 2.30 p.m., along with their witnesses and necessa