Government of Jammu and Kashmir Mandates Strict Adherence To Arbitration Time Limits To Prevent Financial Losses

The circular observed shortcomings where arbitration cases have not been handled promptly which led to serious repercussions. Often, it noted that references to the Department of Law, Justice, and Parliamentary Affairs are delayed until the last moment, jeopardizing the validity of appeals against arbitral awards due to expired limitation periods.

The circular noted that such delays, compounded by inadequately drafted condonation applications lacking essential details, risk dismissal of meritorious appeals, make arbitral awards immediately enforceable without further court intervention.

It noted that the Arbitration and Conciliation Act, 1996 sets strict time limits for various stages of arbitration, including when awards are issued and when challenges can be made. It's clear from legal cases like 'Assam Urban Water Supply & Sewerage Board v. Subash Projects & Mktg. Ltd.' and 'Union of India v. Popular Construction Co.' (2001) 8 SCC 470 that these time limits are crucial and generally cannot be extended.

The circular also stressed that delays in filing appeals under Section 37 of the Arbitration Act, which deals with appealable orders, should be exceptions rather than the rule. Recent court rulings, such as 'Government of Maharashtra v. M/s Borse Brothers Engineers & Contractors Pvt. Ltd.' highlight the need for timely action to ensure fair arbitration outcomes.

To address these issues, the circular requires departments to act quickly when they receive arbitration notices. They must nominate knowledgeable officers to handle these cases promptly and gather all necessary information for legal review. The Law Department must then decide whether to challenge arbitration awards within specific timeframes to avoid missing deadlines.

The Department of Law, Justice, and Parliamentary Affairs has outlined specific timelines for different stages of arbitration processes to streamline operations. These include deadlines for evaluating arbitral awards, initiating challenges, and processing judicial appeals, aimed at preempting any undue delay or oversight.

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