Delay of More Than 120 Days In Filing Arbitration Appeal Under Section 37 Cannot Be Condoned: SC [Read Judgment]

The Supreme Court has observed that a delay of more than 120 days in filing appeal under Section 37 of the Arbitration and Conciliation Act is not liable to be condoned.

In M/S N.V. International vs. State Of Assam, an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 was filed challenging an order by District Judge rejecting a petition under Section 34 challenging the Arbitral award. There was a delay of 189 days in filing the appeal and on the said ground the appeal was dismissed.

The contention before the Apex Court was that, unlike Section 34, Section 37 does not exclude Section 5 of the Limitation Act, as a result of which even if the 90 day period is over, if a condonation application is made under Section 5 of the Limitation Act, it should be considered on its own merits notwithstanding the length of delay.

The bench of Justice Rohinton Fali Nariman and Justice S. Ravindra Bhat noted that, in Union of India vs. Varindera Const. Ltd, it was held that, any delay beyond 120 days in the filing of an appeal under Section 37 from an application being either dismissed or allowed under Section 34 of the Arbitration and Conciliation Act, 1996 should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being decided with utmost despatch.

Holding that the present delay being beyond 120 days is not liable, therefore, to be condoned.

We may only add that what we have done in the aforesaid judgment is to add to the period of 90 days, which is provided by statute for filing of appeals under Section 37 of the Arbitration Act, a grace period of 30 days under Section 5 of the Limitation Act by following Lachmeshwar Prasad Shukul and Others (supra), as also having regard to the object of speedy resolution of all arbitral disputes which was uppermost in the minds of the framers of the 1996 Act, and which has been strengthened from time to time by amendments made thereto. 

Advocates Parthiv K. Goswami and Shuvodeep Roy appeared on behalf of appellant and respondent respectively.

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