Section 34 Petition Filed Without Impugned Award And Statement Of Truth Is Non-Est: Delhi High Court Reiterates

The bench of Justice Mini Pushkarna held that the period of limitation for the purpose of Section 34 would stop only on the date when the petition is properly filed and a non-est filing would not stop the limitation.

The Court also remarked that once the petition is filed along with the requisite documents, mere procedural defects such as related to bookmarking would not make the fling non-est.

Facts

The parties entered into an agreement dated 24.03.2008. In terms of the agreement, the respondent was to provide services related to games planning, project management and work force services for the Commonwealth Games 2010.

A dispute arose between the parties which was referred to an arbitral tribunal consisting of three members. The arbitral tribunal vide an award dated 11.12.2017 held the respondent responsible for the breach of the contract and petitioner entitled to consequent damages, however, the finding regarding damages was not replicated in the concluding part of the award. Accordingly, the petitioner filed an application dated 10.01.2018 under Section 33 of the Act seeking certain clarifications and correction of typographical errors.

The tribunal vide an order dated 07.03.2018 made disposed of the application filed by the petitioner and made corrections to a paragraph of the award, however, this order was only delivered on 22.06.2018. This was followed by an Addendum to Award dated 17.05.2018 wherein the tribunal made correction to another paragraph of the award and extended the period of limitation till the date of the addendum, however, no finding was rendered by the tribunal qua the correction sought by the petitioner on the issue of the damages.

Thereafter, the petitioner issued another email dated 04.06.2018 requesting the tribunal to allow it to make oral submissions on the issue of damages/claim. However, the tribunal vide an email dated 13.06.2018 expressed that it had become functus officio and that no orders can be passed thereon.

Aggrieved thereby, the petitioner filed an application under Section 34 of the A&C Act on 14.08.2018 challenging the award. However, the petition was hopelessly inadequate as it was filed without the impugned award and attested copy of the statement of truth. It was refiled on 24.08.2018 along with the copy of the award and the statement of truth. Again, certain defects were raised by the registry but they were merely procedural in nature like absence of bookmarking, etc. These objections were removed on 01.09.2018.

Contention of the Parties

The respondent objected to the maintainability of the petition on the following grounds:

• The petition is barred by limitation as the same has not been filed within the time prescribed by Section 34(3) of the Arbitration Act.
• The arbitral tribunal had disposed of the petitioner’s application under Section 33 on 07.03.2018, however, the petition was filed only on 01.09.2018, therefore, the petition is barred by limitation.
• Even if assuming that the period of limitation would begin from the date when the petitioner received the copy of the order dated 07.03.2018 only on 22.05.2018, the period of three months expired on 22.08.2018, however, the petition was filed after the expiry of this period.
• The petitioner is not entitled to the benefit of 30 days grace period provided under the Act as it has not made an application to that effect explaining the cause of delay and requesting the Court to condone the delay.

The petitioner made the following counter-arguments:

• The petition is within limitation as the limitation began only when the tribunal vide its email dated 13.06.2018 expressed itself as ‘functus officio’. As in the prior orders, the tribunal did not comment upon the petitioner’s request pertaining to its claim worth Rs. 2.82. Crores. Thus, in the eyes of law, the said request remained alive even on the passing of said orders dated 07.03.2018 and 17.05.2018. It is only when the Tribunal expressed itself as functus officio that the limitation period can be said to have started running.
• The original copy of the signed Addendum to Award was provided to the petitioner only on 01.06.2018 and the period of limitation would begin from that date and not from the date when the scanned copy of the same was received through an email.
• The petition was originally filed on 14.08.2018 which is within limitation even from the date when the Addendum to Award was received through the email.

Analysis by the Court

The Court observed that the tribunal vide its order dated 17.05.2022 had extended the limitation period till the date of the order. The Court referred to the judgment of a coordinate bench in NHAI v. ITD Cementation India^[1] to hold that the period of limitation for filing petition under Section 34 of the Arbitration Act stood extended till 17.05.2018 as the tribunal had extended it exercising power under Section 33(6) of the Act.

Next, the Court examined the issue of date when the award was validly delivered to the petitioner. The Court observed that although the first correction to the award was made on 07.03.2018 but it was delivered to the petitioner only on 22.05.2018, therefore, the period of limitation would commence from 22.05.2018 only.

The Court rejected the argument of the petitioner that since the original copy of the Addendum to Award was collected by it only on 01.06.2018, the period of limitation would commence from the said date. The Court held that that an email sent by the arbitral tribunal to the parties wherein the scanned copy of the signed award is attached constitutes a valid delivery of the award under Section 31(5) of the A&C Act.

The Court held that the period of limitation for challenging an arbitral award under Section 34 of the Act would commence on the date of the subject email and the fact that the award was physically collected on a later date is immaterial qua the limitation.

The Court observed that “The law has to keep its pace in tandem with the developing technology. When service by email is an accepted mode of service, then sending scanned signed copy of the award/order of the Arbitral Tribunal to the parties would be a valid delivery as envisaged under Section 31(5) of the Arbitration Act.”

Next, the Court examined the issue that whether the period of limitation would commence from the date of the order wherein the tribunal had declared itself functus officio. The Court observed that the tribunal had already disposed of the application of the petitioner regarding correction of the award vide its orders dated 07.03.2018 and 17.05.2018. It held that any subsequent communication by the tribunal would not be construed as a fresh cause of action taking the same as the starting point of limitation.

Finally, the Court decided the issue of the date on which the petition was filed. The Court observed that originally the petition was filed on 14.08.2018, however, it was not accompanied by the impugned award and statement of truth and was only running into 46 pages, therefore, it was a non-est filing.

The Court held that the refiling done by the petitioner on 24.08.2018 constitutes a valid filing as it was accompanied by the impugned award and the statement of truth running into 1785 pages, therefore, the period of limitation would stop on 24.08.2018. The Court also remarked that though the petition still had certain defects but these were minor and procedural in nature such as issue of bookmarking.

Lastly, the Court observed that the period of limitation commenced on 22.05.2018 when the scanned copy of the award was sent to the petitioner and stopped on 24.08.2018 when the petition was validly refiled, therefore, there was a minor delay of 2 days. The Court observed that though application for seeking condonation was originally filed, however, it is permissible for a party to file such application any time till the proceedings is pending, therefore, the Court allowed the petitioner to move an application seeking condonation of delay of 2 days in the filing of the petition.

Case Title: Ministry of Youth Affairs and Sports v. ERNST and YOUNG PVT LTD

Citation: 2023 LiveLaw (Del) 760

Counsel for the Petitioner: Mr. Neeraj Choudhary

Counsel for the Respondent: Mr. Koshy John, Mr. Prateek Khanna and Ms. Ravneet Kaur.

Click Here To Read/Download Order