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2012 (1) TMI 412 - SC - Indian LawsArbitration Proceedings - application u/s 34 for setting aside an award made after lapse of three months - District Court had Christmas vacation - benefit of that period over and above the cap of thirty days as provided in Section 34(3) - Whether the Appellants are entitled to extension of time u/s 4 of the 1963 Act - Two contracts were entered into between the Appellants and the Respondents -(i) for construction of Tezpur Town Water Supply Scheme and (ii) for construction of Tinsukia Town Water Supply Scheme - disputes arose between the parties - resolve such disputes, sole arbitrator was appointed u/s 11 - Appellants filed application u/s 16 questioning the jurisdiction of the sole arbitrator - no arbitration clause in the agreement - application rejected by the sole arbitrator and passed two awards - Appellants made two applications for setting aside the awards. HELD THAT - Section 4, enables a party to institute a suit, prefer an appeal or make an application on the day court reopens where the prescribed period for any suit, appeal or application expires on the day when the court is closed. Section 2(j) of the 1963 Act defines 'period of limitation' which means the period of limitation prescribed for any suit, appeal or application by the Schedule, and 'prescribed period' means the period of limitation computed in accordance with the provisions of this Act. Section 2(j) of the 1963 Act when read in the context of Section 34(3) of the 1996 Act, it becomes amply clear that the prescribed period for making an application for setting aside arbitral award is three months. The period of 30 days mentioned in proviso that follows Sub-section (3) of Section 34 of the 1996 Act is not the 'period of limitation' and, therefore, not 'prescribed period' for the purposes of making the application for setting aside the arbitral award. The period of 30 days beyond three months which the court may extend on sufficient cause being shown under the proviso appended to Sub-section (3) of Section 34 of the 1996 Act being not the 'period of limitation' or, in other words, 'prescribed period', in our opinion, Section 4 of the 1963 Act is not, at all, attracted to the facts of the present case. Seen thus, the applications made by the Appellants, for setting aside the arbitral award were liable to be dismissed and have rightly been dismissed by the District Judge, as time barred.
Issues:
1. Jurisdiction of the sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. 2. Application for setting aside arbitral awards under Section 34 of the 1996 Act. 3. Interpretation of Section 4 of the Limitation Act, 1963 in relation to extension of time for filing applications. 4. Applicability of Section 43(1) of the 1996 Act to arbitration matters. Analysis: Issue 1: Jurisdiction of the sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 The case involved disputes arising from two contracts for water supply schemes, leading to the appointment of a sole arbitrator by the Chief Justice of Gauhati High Court. The Appellants challenged the jurisdiction of the arbitrator due to the absence of an arbitration clause in the agreement. The arbitrator proceeded with the arbitration and passed awards in favor of the Respondents. Issue 2: Application for setting aside arbitral awards under Section 34 of the 1996 Act The Appellants filed applications for setting aside the awards under Section 34 of the 1996 Act, which were dismissed by the District Judge and subsequently by the Gauhati High Court on grounds of limitation. The key contention was regarding the timeliness of the applications and the interpretation of Section 34(3) of the Act. Issue 3: Interpretation of Section 4 of the Limitation Act, 1963 in relation to extension of time for filing applications The Appellants sought an extension of time under Section 4 of the 1963 Act, arguing that the period during the court's Christmas vacation should be excluded. However, the Court held that the prescribed period for setting aside arbitral awards is three months under Section 34(3) of the 1996 Act, and the additional 30 days mentioned in the proviso are not part of the prescribed period. Therefore, Section 4 of the 1963 Act was deemed inapplicable to the case. Issue 4: Applicability of Section 43(1) of the 1996 Act to arbitration matters Section 43(1) of the 1996 Act states that the 1963 Act applies to arbitrations as it does to court proceedings, except where excluded by specific provisions like Section 34(3). The Court emphasized the mandatory nature of the time limit for filing applications under Section 34(3) and highlighted the importance of adhering to the prescribed timelines for setting aside arbitral awards. In conclusion, the Supreme Court dismissed the appeal, upholding the decisions of the lower courts regarding the dismissal of the applications for setting aside the arbitral awards. The judgment clarified the interpretation of relevant provisions of the 1996 Act and the 1963 Act in the context of arbitration matters, emphasizing the importance of strict adherence to statutory timelines for such applications.
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