Application to set aside arbitration award beyond 120 days

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This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 1 year, 2 months ago.

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  • #1606

    Anonymous
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    An arbitration award was passed against ex parte since I never got any notice for the arbitration. The sole arbitrator was appointed by my opposite party. Now, the time period of limitation for filing the application for setting aside the arbitration award under Section 34 has expired. In fact, a period of about six months has expired, so condonation of delay period of 30 days under Section 34 is also not available. I cam to know of this arbitration award only last week when I learnt about execution proceedings were started against me by the opposite party for executing the above arbitration award. Till now I was not aware of the arbitration proceedings or the award. What can I do now? How can I challenge it?

  • #1607

    Please note that under Section 34 of the Arbitration and Conciliation Act, the period of limitation for filing an application for setting aside an arbitral award is three months. Further, under this section, the court has the power to entertain such an application within a further period of 30 days if sufficient cause is shown for the delay. Thus, a total of about 120 days is available to file an application for setting aside the arbitral award. No further delay can be condoned under the said Act.

    You have said that in your case the delay is already about six months, which is beyond the maximum period permissible under Section 34 of the said Act.

    One possibility could have been filing an application for condonation of delay under Section 5 of the Limitation Act which lays down as under:

    5. Extension of prescribed period in certain cases.—Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

    Explanation.—The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.”

    It is pertinent to mention that Section 43 of the Arbitration and Conciliation Act specifically states that the Limitation Act will apply to arbitrations. Therefore, Section 5 of the Limitation Act should perhaps have been applicable.

    However, in the case of State of Goa v. Western Builders, (2006) 6 SCC 239 : AIR 2006 SC 2525, the Supreme Court has ruled out this possibility also, by holding that:

    “…by virtue of Section 43 of the Act of 1996 the Limitation Act, 1963 applies to the Act of 1996 but by virtue of sub-section (2) of Section 29 of the Limitation Act, if any other period has been prescribed under the special enactment for moving the application or otherwise then that period of limitation will govern the proceedings under that Act, and not the provisions of the Limitation Act. In the present case under the Act of 1996 for setting aside the award on any of the grounds mentioned in sub-section (2) of Section 34 the period of limitation has been prescribed and that will govern. Likewise, the period of condonation of delay i.e. 30 days in the proviso.”

    “Therefore, by virtue of sub-section (2) of Section 29 of the Limitation Act what is excluded is the applicability of Section 5 of the Limitation Act and under Section 3 read with the Schedule which prescribes the period for moving application.”

    This judgment of the Supreme Court was subsequently followed in certain other judgments of the Supreme Court.

    In view of these reasons, the maximum period for making an application for setting aside an arbitral award would be 3 months plus 30 days, which is about 120 days. Thereafter, it is not possible to file such application.

    In your case, thus, you have exhausted this possibility.

    In consultation with your advocate, you may perhaps consider filing a writ petition or may be a Special Leave Petition under Article 136 of the Constitution before the Supreme Court, citing the special reasons in your case by showing that you never got any information about the arbitration proceedings or about the arbitral award earlier; though I may caution you that the chances of success in these proceedings will also be quite limited.

         


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.

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