2011 (2) TMI 1364 - SC - Indian Laws

Arbitral award has to be delivered to the party by the arbitral tribunal and the limitation for making an application for correction or interpretation of award under section 33(1) and for making an application for setting aside an award under section 34(3) commences from the date of delivery of such arbitral award by the arbitral tribunal to a party to the arbitration agreement.

Summary

Issues Involved:
1. The commencement date of the limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside an arbitral award.
2. The interpretation of Section 31(5) and Section 34(3) of the Arbitration and Conciliation Act, 1996.
3. The validity of the application for setting aside the arbitral award in light of the limitation period.

Issue-wise Detailed Analysis:

1. Commencement Date of Limitation Period:
The primary issue addressed in this judgment is whether the limitation period for making an application under Section 34 of the Arbitration and Conciliation Act, 1996, starts from the date a signed copy of the award is delivered to the party by the arbitrator or from the date the objector receives a copy of the award by any means and from any source. The court concluded that the limitation period begins only from the date a signed copy of the award is delivered to the party by the arbitrator, as per Section 31(5) of the Act.

2. Interpretation of Section 31(5) and Section 34(3):
The court analyzed Sections 31(5) and 34(3) of the Act. Section 31(5) mandates that a signed copy of the arbitral award must be delivered to each party. Section 34(3) prescribes that an application for setting aside an arbitral award must be made within three months from the date the party receives the arbitral award. The court emphasized that the term "received" in Section 34(3) must be read in conjunction with Section 31(5), meaning the limitation period starts only when a signed copy of the award is delivered to the party.

3. Validity of the Application for Setting Aside the Arbitral Award:
The court found that the appellants received a signed copy of the award from the arbitrator on January 19, 2004, and filed the application under Section 34 on January 28, 2004. The application was thus within the prescribed limitation period. The court referenced the case of Union of India v. Tecco Trichy Engineers & Contractors, which held that the delivery of a signed copy of the award is a substantive requirement, and the limitation period for challenging the award starts from the date of such delivery.

Judgment:
The court concluded that the Bombay High Court and the Principal District Judge, Latur, erred in dismissing the appellants' application as barred by limitation. The court set aside the judgments and orders of the lower courts, restoring the appellants' application under Section 34 before the Principal District Judge, Latur, for a hearing on merits. The court directed the Principal District Judge to dispose of the matter preferably within six months from the date of receipt of the order.