"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well."

-Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Wednesday, March 2, 2011

When Does the Limitation Period in S 34(3) Start Running and Other Cases for the Fortnight

State of Maharashtra & Ors. v. Ark Builders Pvt. Ltd. (SCI: 28.02.11)
Aftab Alam & RM Lodha, JJ.
Civil Appeal No. 2152 of 2011 (Arising out of S.L.P. (Civil) No. 14308 of 2010)

Disputes arose between the parties and was referred to arbitration. The award was in favour of Ark Builders Pvt. Ltd. (Ark Builders). The tribunal gave the award to Ark Builders on 20th March 2003. The tribunal did not give a copy of the award to the appellant apparently because the appellant did not bear costs of the arbitration.

Ark Builders submitted the award to the Executive Engineer (one of the appellants) on 29th March 2003 asking for payment. A proposal was filed by the Executive Engineer on 16th April 2003 to the Chief Engineer, the Financial Advisor and the Joint Secretary for challenging the award.

On 13th June 2003, Ark Builders sent a reminder to the Chief Engineer for payment on the basis of the arbitral award. Another reminder was sent to the Secretary and Special Commissioner on 8th January 2004.

On 15th January 2004, the Executive Engineer acknowledged the receipt of the letter dated 29th March 2003 and the subsequent reminders but informed Ark Builders that the award would be challenged before the appropriate forum.

On 17th January 2004, a messenger was sent to the arbitrator to ask for a certified copy of the award. On 19th January 2004, the appellant received a certified copy of the arbitral award. On 28th January 2004, a petition for challenging the arbitral award was made.

Now, the question before the court was whether the limitation period specified in Section 34(3) started running from 29th March 2003, when Ark Builders submitted the arbitral award to the Executive Engineer, or from 19th January 2004, when the appellants received a certified copy of the arbitral award.

Section 34(3) provides:
An application for setting aside may not be made after three months have elapsed from the date on which die party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had bow disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.”
Section 31(5)
(5) After the arbitral award is made, a signed copy shall be delivered to each party.”
The Supreme Court, after referring to the above provisions and to the Supreme Court decision in Union of India v. Tecco Trichy Engineers and Contractors, held that the limitation period prescribed in Section 34(3) would start running only from the date when the party receives from the arbitrator a signed copy of the arbitral award, that is, 19th January 2004. The court further held:
“If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law.”
Other Cases Decided in the Second Fortnight of February

Bihar State Housing Board v. Harendra Nath Kapoor & Ors. (Patna HC: 18.02.11)
Shivam Housing Pvt.Ltd & Anr v. Thakur Mithilesh Kumar Singh & Anr. (Patna HC: 25.02.11)
Key Aspect:
Whether a Court Below the District Court is Competent Court for Setting Aside Arbitral Award?

Ashok Kalra vs Akash Paper Board Pvt Ltd & Anr (Del HC: 18.02.11)
Key Aspects:
Filing of Application to Set Aside Arbitral Award beyond the Time Stipulated in Section 34(3) of the Arbitration and Conciliation Act, 1996.

Bhanu Construction Pvt. Ltd. v. NTPC (Del HC: 18.02.11)
Key Aspects:
Arbitrator Cannot Disregard Express Provisions of Contract, Inconsistent Findings Arrived at by the Arbitrator- Legal Misconduct, Technical Experts as Arbitrators, Arbitration Act, 1940.

Parle Products Ltd. v. Jaydev F. Bombaywala (Guj HC: 21.02.11)
Key Aspects:
Filing of Suit- Appropriate Court, Forum Selection Clause- Exclusivity of Selected Forum.

Green Delhi Bqs Ltd. v. Municipal Corporation Of Delhi & Anr. (Del HC: 23.02.11)
Key Aspect: Filing of Writ Petition When Arbitration Clause Exists

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