Challenge To Award U/S 34 Of Arbitration Act Without Award Itself Being Filed Would Not Be A Valid Filing: Delhi High Court

Brief Facts

This is an application for condonation of delay in filing the petition under Section 34 of the Arbitration & Conciliation Act, 1996.The Petitioner has approached this Court by filing a petition under Section 34 of the Arbitration & Conciliation Act challenging an Award dated 24.05.2023 passed by the Sole Arbitrator.

Material on record indicates that dispute had arisen between the Petitioner and the Respondent under an agreement for hire utilization of Wirtgen Cold Recycler/Stabilizer Unit WR-240 Model 2016 and a Cement Spreader Model SW16MC for work at its project at Andaman. 4. Disputes arose between the parties regarding payments to be made by the Respondent. The Respondent filed a petition under Section 11 of the Arbitration & Conciliation Act being Arbitration Petition No.140/2020 for appointment of an Arbitrator and this Court vide Order dated 14.03.2022 appointed an Arbitrator.

The petition under Section 34 of the Arbitration & Conciliation Act is accompanied by an application for condonation of delay in filing the petition under Section 34 of the Arbitration & Conciliation Act the same has been objected by the Respondent stating that the challenge has been filed beyond the period prescribed under the Arbitration & Conciliation Act, 1996.

Contentions

The respondent submitted that the first filing on 21.08.2023 which was without the award is a non-est filing, i.e., it cannot be taken as a filing at all and the re-filing on 25.09.2023 which even assuming but not admitting as the correct filing has been made beyond the time prescribed under Section 34 of the Arbitration & Conciliation Act and therefore the present petition cannot be considered.

Per contra, the petitioner submitted that the initial filing was within the period of limitation and was not a non-est filing. He states that the objections to the petition were cured and the petition was again filed on 25.09.2023 in proper format containing detailed grounds after thorough analysis of the impugned Award.

• That the petition was duly stamped and supported by duly executed affidavit and accompanied by a vakalatnama and therefore cannot be said that the filing was completely non-est. The Petitioner places reliance on the judgment passed by the Delhi High Court in Oriental Insurance Company Limited v. Air India Limited (2019) for the said proposition.
• That the Award was passed on 24.05.2023. Section 34 of the Arbitration & Conciliation Act mandates that the application for setting aside the award should be filed within three months and therefore the three months period ends on 24.08.2023.
• That the further 30 days period would commence from 25.08.2023 and ends on 24.09.2023 and since 24.09.2023 was a Sunday, the petition which was filed on 25.09.2023 is within the period of limitation and therefore this Court has to only consider the reason for condoning the delay is correct or not and it cannot be said that the petition has been filed beyond the prescribed period.

Court's Analysis

The court at the outset discussed the time period within which an application under section 34 of the Arbitration Act can be filed. The court observed that Section 34 (3) of the Arbitration & Conciliation Act mandates that an application for setting aside an arbitration Award may not be filed after three months having elapsed from the date on which the party making that application had received the arbitral award.

The court further observed that the proviso to Section 34(3) states 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 30 days and not thereafter.

Based on the above, the court adverted to the facts of the present case and observed that the initial petition has been filed on 21.08.2023, which is within the period prescribed under the Arbitration & Conciliation Act. The said petition has been admittedly filed without the copy of the Award.

The court further observed that a petition under Section 34 of the Arbitration & Conciliation Act is for challenging the Award. It cannot be said that a challenge to the Award without the award itself being filed would be a valid filing. Without the Award, the challenge would become meaningless because unless the Award is perused by the Court, it cannot test or adjudicate on the correctness of the Award.

The court referred to the Delhi High Court judgment in Oil & Natural Gas Corporation Limited v. Joint Venture of M/s Sai Rama Engineering Enterprises (SREE) & M/s Megha Engineering & Infrastructure Limited (MEIL) (2019) wherein it was held that It is also necessary that the application be accompanied by a copy of the award as without a copy of the award, which is challenged, it would be impossible to appreciate the grounds to set aside the award.

The court further referred to the judgment of the Supreme Court in Shahgufa Ahmed & Ors. v. Upper Assam Polywood Products Private Limited & Ors., (2021)wherein it was held that “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 court in the above case further observed that 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

Applying the above ratio to the facts of the present case, the court concluded that the filing on 25.09.2023 was therefore beyond the period of prescribed limitation and this Court cannot entertain this petition.

Resultantly, the application was dismissed.

Case Title: VASISHTA MANTENA NH04 JV & ORS. V. BLACKLEAD INFRATECH PVT LTD.

Citation: 2024 LiveLaw (Del) 1205

Citation : O.M.P. (COMM) 419/2023

Judgment Date: 29/10/2024