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How can Limitation Act be invoked in matters relating to Arbitration and Conciliation?

The United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985; the general assembly of the united nations has recommended that all countries shall give due consideration to the model laws. Model Law and Rules make significant contributions to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations; taking into consideration of these model laws, parliament in its 47th republic enacted arbitration and conciliation Act 1996. The Act was enacted with an intention of speed and smooth resolution of disputes with the help of arbitration and conciliation proceedings thereby reducing the burden of courts. The arbitration Act is amended from time to time to make it more effective and arbitration and conciliation Act 2015 was enacted to fulfil the object of the Act.

 

Provisions in Question

The arbitration and conciliation act 1996 provides with provision of arbitral awards, its enforcement and appeals. Section 34 of the act and section 37 of the act deals with the appeal provision part. These sections are quite easy to read but difficult to interpret. There has always been a contradiction between the interpretation of  section 34 and section 37 of the act where section 34 clearly stipulates the time period within which appeal has to be filed section 37 speaks about appeal from orders of original jurisdiction but does not expressly provide for any time limit for filing an appeal. The question which exists is whether section 37 follows section 34 or laws of limitation shall be applied in interpreting section 37 by virtue of section 43 of the Act. 

To understand the matter in more detail it's essential to understand the essence of section 34, 37 and 43 of the Act.

Section 34 sub-section 3 and sub section 4 of the Arbitration and conciliation Act 1996

(3) An application for setting aside may not be made after three months have elapsed from the date on which the 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 been 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.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.



Section 37 of the Act states,

Appealable orders. – (1) An appeal shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the court passing the order, namely: -

    (a) Granting or refusing to grant any measure under section 9; 

    (b) Setting aside or refusing to set aside an arbitral award under section 34. 

(2) An appeal shall also lie to a court from an order of the arbitral tribunal—

    (a) Accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

    (b) Granting or refusing to grant an interim measure under section 17. 

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

 

Section 43 of the act read as follows;

Limitations. –

(1) The Limitation Act, 1963 (34 of 1963), shall apply to arbitrations as it applies to proceedings in court. 

(4) Where the court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (3 6 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.  

 

When the above text is read together there seems to be 2 different interpretations to the vagueness of section 37 period of limitation. The first being section 37 goes on the same drill with section 34 to be enforced by the hon’ble supreme court  by exercising the power provided under article 142 of the Indian constitution. Or the time period of limitation Act shall be applicable by virtue of section 43.

 

It shall be noted that the major objective behind the enactment of the arbitration and conciliation Act was to speed up the mechanism of dispute redressal and free up the court's burden. Section 34 provides for a minimum time frame for appeals and laws of limitation is not concerned towards speedy redressal so adherence to the provisions of the limitation act can lead to the frustration of the arbitration and conciliation act 1996. It is essential to check the compactability of applying the provisions of limitation act in arbitration matters. 

 

Over the time the Indian judiciary has pronounced various judgments on the given matter.  Some of them are discussed as follows;

 

N.V INTERNATIONAL vs STATE OF ASSAM AND OTHERS,

 

In this case justice Rohinton Fali Nariman held that the basic essence of the  arbitration and conciliation act 1996 is speedy redressal and applicability of limitation act when the  delay is beyond 120 days i.e., including the grace 30 days prescribed under section 34 would violate the very purpose of the Act and cannot be condoned. 

The judgement read as follows

 We may only add that what we have done in the aforesaid judgment is to add to the period of 90 days, which is provided by statute for filing of appeal under Section 37 of the Arbitration Act, a grace period of 30 days under Section 5 of the Limitation Act by following Lachmeshwar Prasad Shukul, as also having regard to the object of speedy resolution of all arbitral disputes which was uppermost in the minds of the framers of the 1996 Act, and which has been strengthened from time to time by amendments made thereto. The present delay being beyond 120 days is not liable, therefore, to be condoned. Accordingly, the appeal is dismissed.

 

While pronouncing this judgement a reference to the case of Variendra construction ltd was made where the facts of the case were similar and the hon'ble court refused to condone the delay and appeal was accordingly dismissed.

 

How section 37 can follow the limitation period prescribed under section 34 of the act?

The answer to the question is provided in Article 142 of the Indian constitution. 

Article 142 of the Indian constitution states 

  1. Enforcement of decrees and orders of Supreme Court and unless as to discovery, etc.-

(1) The Supreme Court in the exercise of its jurisdiction may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or orders so made shall be enforceable throughout the territory of India in such manner as may be prescribed by or under any law made by Parliament and, until provision in that behalf is so made, in such manner as the President may by order prescribe.

(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.”

 

Relevant case laws suggesting the power of the apex court under article 142. 

CHANDRAKANT PATIL, SHYAM K. GARIKAPATTI, SUBHASH SINGH THAKUR VS

STATE THROUGH CBI,  in this case supremes court’s power to exercise the power provided under article 142 was discussed. in which it was contended that when the  question of  providing complete justice arises and to do complete justice invoking the powers under article  142 becomes necessary article 142 shall be invoked and complete justice shall be done. 

 

a point which shall be noted here is the no act or the constitution of india defines complete justice. rather the court has to decide based on the facts and circumstances as to what is complete justice. which gives it a wider interpretation. 

 

to give it a clear context the judgement also cited various other judgments and stated;

This power has been conferred on the Apex Court only and the exercise of that power is not dependent or conditioned by any statutory provision. The Constitutional plenitude of the powers of the Apex Court is to ensure due and proper administration of justice and is intended to be co-extensive in each case with the need of justice of a given case and to meeting any exigency. Very wide powers have been conferred on this Court for due and proper administration of justice and whenever the court sees that the demand of justice warrants exercise of such powers, it will reach out to ensure that justice is done by resorting to this extraordinary power conferred to meet precisely such a situation."

Supreme court Bar Association vs union of india and another. It is one of the most important cases where the power of the supreme court for exercising  power under article 142. The petition was placed before a Constitutional Bench for passing the appropriate direction, order or declaration. The bench identified a single question and had to decide upon was whether the Supreme Court of India can while dealing with Contempt Proceedings exercise power under Article 129 of the Constitution or under Article 129 read with Article 142 of the Constitution or under Article 142 of the Constitution can debar a practicing lawyer from carrying on his profession as a lawyer for any period whatsoever

 The bench came to the conclusion that the Supreme Court under Article 129 and the High Court under Article 215 of the Indian Constitution declaring them a court of records has the power to punish them for contempt of itself. The Court observed that Parliament is competent to make law in relation to Contempt of Court. After analyzing Article 246 and entry 77 of List I of the VIIth Schedule and entry 14 of List III of the said schedule it is evident that the legislature can make a law regarding the same, but cannot take away contempt jurisdiction from the Courts which flows from the Courts being deemed as Courts of record which embodies the power to punish for the contempt of itself.

With reference to Article 142 of the Constitution of India the Court observed that when this court takes cognizance of a matter of contempt of Court by an advocate, there is no case, cause or matter before it regarding his professional misconduct even though in a given case, the contempt committed by an advocate may also amount to an abuse of the privilege granted to an advocate by virtue of the license to practice law. No issue relating to his suspension from practice is the subject matter of the case.

With a proper reading and interpretation of these judgments it is understood that the power of supreme court users article 142 is of extraordinary and wide nature . it can not be limited by the statutory provisions of any act nor legislature can take these away. 

 The above mentioned text clearly indicates the power provided to the apex court by the constitution to deliver complete justice.  Further, there is no specific guideline or rule provided by the law which explains when, where and under which circumstances the Apex Court can invoke the said article to do “complete justice”.  

 In simple terms to fulfil the object of the arbitration and conciliation Act 1996 Supreme Court by virtue of article 142 has the power to apply section 34 in matters of appeal under section 37. Recourse to the provisions of limitation act will be in contradiction with the very purpose of the Act and will contradict the process of adjudication of justice. 

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre shall not be responsible for any errors caused due to human error or otherwise.

  • The United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985
  • Model Law and Rules make significant contributions to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations
  • Taking into consideration of these model laws, parliament in its 47th republic enacted arbitration and conciliation Act 1996

BY : Kajal Jain

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