IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Narula, J.
Road Construction Department, Bihar - Appellant
Versus
Bla-S &p (JV) - Respondent
O.M.P. (Comm) No. 116 of 2021; I.A. No. 3848 of 2021, 3849 of 2021
Decided On : 16-03-2021
Section 34 - Arbitration and Conciliation Act, 1996 - [Section 34] - The court dismissed the applications seeking condonation of delay in filing and re-filing of the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996. The court held that the period of limitation for filing objections to the Award commences from the date on which the party making the application has received a signed copy of the Arbitral Award in accordance with Section 31(5) of the Act. The court also emphasized that the plea of invalidity does not dilute the rigour of Section 34(3) of the Act, and the question of whether the impugned Award qualifies as a valid Award can only be examined under Section 34 of the Act.
Fact of the Case:
The Petitioner sought condonation of delay in filing and re-filing of the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996, assailing the impugned Arbitral Award. The Petitioner contended that the Arbitral Award was not valid due to nonfulfillment of the criteria set out in Section 31, and therefore, the limitation period under Section 34(3) had not commenced.
Finding of the Court:
The court found that the present petition was ex facie beyond the extended period of 30 days prescribed under Section 34(3) of the Act. The court held that the plea of invalidity does not dilute the rigour of Section 34(3) of the Act, and the contention of invalidity advanced by the Petitioner was devoid of merits.
Issues: The issues involved the condonation of delay in filing and re-filing of the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996, and the validity of the Arbitral Award under Section 31 of the Act.
Ratio Decidendi: The court emphasized that the period of limitation for filing objections to the Award commences from the date on which the party making the application has received a signed copy of the Arbitral Award in accordance with Section 31(5) of the Act. The court also held that the plea of invalidity does not dilute the rigour of Section 34(3) of the Act, and the question of whether the impugned Award qualifies as a valid Award can only be examined under Section 34 of the Act.
Final Decision: The court dismissed the applications seeking condonation of delay, stating that the present petition was barred by limitation and all pending applications were disposed of.
JUDGMENT
Sanjeev Narula, J. -
I.A. No. 3850/2021 (for delay 65 days in filing the petition) & I.A. No. 3851/2021 (for delay of 166 days in re-filing the petition)
1. By way of the afore-noted applications, the Petitioner seeks condonation of delay in filing and re-filing of the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the Act ] assailing the impugned Arbitral Award dated 1st October, 2019 passed by the Arbitral Tribunal comprising of (i) Mr. A.K. Yadav [presiding Arbitrator], (ii) Mr. R.N. Goel, and (iii) Mr. B.D. Joshi [being the other two member Arbitrators]. The Arbitral Tribunal pronounced the majority Award [2:1] on 1st October, 2019, whereby the claims of the Respondent were allowed. One of the members to the Tribunal, Mr. B.D. Joshi, did not sign the impugned Award.
2. Mr. Keshav Mohan, learned counsel for the Petitioner states that the period of limitation under Section 34(3) of the Act would commence only when a valid Arbitral Award is made. In the instant case, the Arbitral Award dated 1st October, 2019 is not a valid or executable Award on account of being in violation of Section 31 of the Act, and therefore, notwithstanding the delay in filing the petition, the Court may entertain this petition. His contentions are summarized hereinbelow: -
2.1 The majority Award dated 1st October, 2019 does not qualify as a valid Award in terms of Section 31 of the Act.
Under Section 29 and 31(2) of the Act, participation and deliberation of all the members of the Arbitral Tribunal is necessary in order to pass a valid Award; in absence whereof, the award is rendered invalid. Mr. B.D. Joshi was not present during the Internal meetings/deliberations conducted for making/ publishing of the award. His consent or dissent has not been made part of the Impugned award.
2.2 The majority award is valid only if reasons for omission were supplied.
Under Section 31(2) of the Act, the signatures of the majority members of the Arbitral Tribunal will be considered sufficient, only if, reasons for the omission of signature of the member of the Arbitral Tribunal who refrained from signing the Arbitral Award are supplied. The reasons stated in the impugned award for the omission are vague. The manner in which the Tribunal has functioned amounts to miscarriage of justice.
2.3 The period of limitation under Section 34(3) of the Act has not commenced.
It is a settled principle of law that the limitation under Section 34(3) of the Act can commence only after passing of a valid Award signed by all the members of the Arbitral Tribunal. The impugned Award has been signed and passed only by two Arbitrators namely, Mr. A.K. Yadav and Mr. R.N. Goel. Since the signed copy of a legally valid Award by all the members of the Arbitral Tribunal has not been received till date, as provided under Section 31(1) of the Act, the limitation period under Section 34(3) has not begun.
2.4 Signing of award is mandatory under Section 31.
That the signing of the Award is mandatory, in terms of Section 31 of the Act. The learned counsel for the Respondent [i.e. the Claimant before the Arbitral Tribunal] had sent a written communication to the presiding Arbitrator stating that it would be filing an application under Section 29A of the Act seeking extension of the mandate of the Arbitral Tribunal. Similar communication was also sent by Mr. B. D Joshi However, all such requests were ignored. The period for rendering the Award and dissenting opinion must be within the period prescribed under Section 29A of the Act. It is not merely an administrative act or a formality which can be suspended. The award cannot be made and finalized unless all the members of the Arbitral tribunal have deliberated upon the proceedings. The dissenting opinion of one of the members of the Arbitral Tribunal had to be delivered contemporaneously on the same date when the final Award was passed. Since the Award rendered has not been signed by the
The period of limitation for filing objections to the Award commences from the date on which the party making the application has received a signed copy of the Arbitral Award in accordance with Secti....
An arbitral award is valid only if signed by a majority of the tribunal, with reasons for any signature omissions provided; limitation for filing objections commences upon receipt of a valid award.
(1) Petition against arbitral award – Commencement of period of limitation – Period of limitation prescribed for filing objections would commence only from date when signed copy of award is delivered....
Scanned signed copy of the award/order of the Arbitral Tribunal to the parties would be a valid delivery as envisaged under Section 31(5) of the Arbitration and Conciliation Act, 1996.
Arbitral Award – Limitation – S. 34(3) specifically states that an application for setting aside may not be made after three months have lapsed from date of which party making an application had rece....
The court ruled that statutory timelines under the Arbitration and Conciliation Act are strict and failure to properly file within these limits results in dismissal as barred by limitation.
The Court emphasized the importance of due diligence and dispatch in exercising the right to challenge an Arbitral Award within the prescribed time, as per the provisions of the Arbitration Act.
The main legal point established in the judgment is the significance of adhering to the prescribed limitation period under the Arbitration Act and the requirement for parties to exercise their rights....
The calculation of the limitation period under Section 34 of the Arbitration and Conciliation Act, 1996, requires the exclusion of the first day and the reckoning of the three-month period from the d....
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