Condonation of delay in challenging Arbitral Award: Simplex Infrastructure Ltd V. Union of India
In this case the Court has observed that sec14 of the Limitation Act,1963 would be applicable to the proceedings in section 34 of the Arbitration & Conciliation Act ,1996 , if the petition under sec 34 (in the first instance) was filed within time .
Facts of the case
The appellant, who is a contractor entered into an agreement for the construction of 821 permanent shelters in the tsunami hit Andaman and Nicobar islands with Union of India.
Due to differences with regard to the performance of the construction work the parties were referred to arbitration.
On 27th October ,2014 , the arbitrator made an award in favor of the appellant and directed the respondent to pay a sum of the money with the simple interest @10% per annum from 1 January ,2009 till actual payment . And the respondent received the copy of the award on 31st October ,2014.
The respondent filed an application under section 34 of this 1996 Act on 30 January 2015 aggrieved by the award before the district judge for setting aside the arbitral award under sec 34 to the Arbitration and Conciliation Act, 1996.
District Court decision
On 12 February ,2016, the district judge dismissed the respondent application under section 34 of the 1996 Act for the want of jurisdiction . The district judge observed :-
"According to the provisions of section 42 of the Arbitration and conciliation Act when an application has been made regarding an arbitration agreement before any court under the same part that court shall only have jurisdiction over arbitral proceedings and all subsequent application arising out of the agreement and the arbitral proceedings shall be made in that court . In this case the parties have preferred an application under section 9 of the Arbitration and Conciliation Act before the Hon'ble High Court of kolkata. Thus , it is clear to me that this Appealant court has no jurisdiction to entertain this appeal according to the section 42 of the Arbitration and Concillation Act".
The respondent on 28 March 2016 filed an application under section 34 along with an application for condonation of delay of 514 days before the High Court of Calcutta.The respondent had put forward the reason for the delay on ground of there being a bona fide mistake in filing the application before the right forum.
High Court Decision
The single judge of the high court allowed the respondent application and condoned the delay of 514 days on 27 April 2016.
Supreme Court Decision
Issue raised :
Whether the single judge was justified in condoning a delay of 514 days by the respondent in filing the application under section 34 of the Arbitration and conciliation Act?
The Supreme Court analysed section 34 of the Arbitration and conciliation Act in regard to section 5 of the Indian limitation Act,1965.
Section 5 of the Act ,1963 states the extension of prescribed period in certain cases which strictly prohibits from entertaining any application under this section before the executing court unless the appellant or applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within the such period .
Also in accordance to section 34(3) of the A& C Act. An application for setting aside the award shall be made within 3 months of the date of receipt of arbitration award.The proviso to section 34(3) allows this period to be further extended thirty days "but not thereafter " on sufficient laws being shown by the party filing the application.
Further the applicability of section 14 in respect to section 34 of the A&C Act is in question in this case .
Section 14 of the limitation act states the exclusion of time of proceeding bonafide in court without jurisdiction . The position of law is well settled with respect to the applicability of section 14 of the limitation act to an application filed under section 34 of the 1996 Act.
The court observed that in the present case if the benefit of sec 14 of the limitation Act is given to the respondent there were still be a delay of 131 days in filling the application. Hence the delay of 131 days cannot be condoned.
The petition under section 34 stands dismissed on the ground that it is barred by limitation.