Time Spent From Award Correction And Delivery Of Signed Copy Of Order Should Be Excluded From The Period Of Limitation: Calcutta High Court

The bench held that the time spent from the date of disposal of such request till the signed copy of the order is delivered to the party shall necessarily stand excluded while calculating the period of limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996.

Brief Facts:

The matter pertained to an arbitral award. The Petitioner sought correction of the award under Section 33 of the Arbitration and Conciliation Act, which was granted on October 14, 2022. The corrected certified copy of the award was issued on December 14, 2022. Subsequently, the Opposite party no. 1 filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) on February 16, 2023, to set aside the arbitral award which was also accompanied by an application under Section 5 of the Limitation Act to condone a 29-day delay in filing.

The Judge of the Commercial Court condoned the delay. Feeling aggrieved, the Petitioner approached the Calcutta High Court (“High Court”) and challenged the decision of the Commercial Court.

The Petitioner argued that the limitation period for filing an application to set aside the arbitral award should commence from the date of the request's disposal for correction, not from the date of the corrected certified copy.

Observations by the High Court:

The issue before the High Court was whether the time taken by the Arbitrator to communicate the decision on a request under Section 33 of the Arbitration and Conciliation Act (A & C Act) and the time taken to correct the award should be excluded from calculating the period of limitation for setting aside an arbitral award. The Limitation Act, 1963, by virtue of Section 43 of the A & C Act, applies to arbitrations as it does to court proceedings. Section 34(3) of the Arbitration Act prescribes a specific period of limitation, while its proviso allows for an extension upon showing sufficient cause, though within a fixed outer limit.

The High Court held that the Arbitration Act, as a special law, overrides the general limitation periods under Section 29(2) of the Limitation Act, meaning the specific periods prescribed under Section 34(3) for setting aside an arbitral award prevail. The High Court recognized that the phrase “but not thereafter” in the proviso to Section 34(3) prohibits the application of Section 5 of the Limitation Act for condoning delays beyond the specified period.

Section 12(4) of the Limitation Act explicitly states that the time required to obtain a copy of the award should be excluded when computing the period for setting aside the award. This provision applies broadly, including cases where statutes require that copies of the award be delivered to the parties, implying that the time taken from the passing of the award until its delivery to the parties falls within the scope of “time requisite for obtaining a copy.”

The High Court noted that the request under Section 33 for correction of the arbitral award dated July 28, 2022, was made, and the Arbitrator passed an order on October 14, 2022. The order was communicated to the parties only on October 17, 2022, by speed post.

By reading Sections 33 and 31(5) of the Arbitration Act together, the High Court held that the Arbitral Tribunal is obliged to deliver a signed copy of the order disposing of the request. Consequently, the period of limitation starts from the disposal date, and the time taken to deliver the signed copy should be excluded from the limitation calculation.

The High Court emphasized that a purposive interpretation of Section 34(3) was necessary to ensure that the statutory period of limitation is not curtailed by the time taken to deliver the signed copy of the order.

Consequently, the High Court excluded the time taken by the Arbitral Tribunal to deliver the signed copy of the order. The Commercial Court's decision to admit the application was deemed correct.

Case Title: Saltee Productions Private Limited Vs. Indus Towers Limited

Case Number: CO 3521 of 2023

Advocate for the Petitioner: Mr. Rahul Karmakar, Mr. Sourav Guchhait

Advocate for the Respondent: Mr. Sakya Sen, Mr. Sunil Kr. Gupta

Click Here To Read/Download Order or Judgement