What Is Appropriate Limitation Period Applicable To Appeals Filed Under Section 37 Of Arbitration and Conciliation Act? Supreme Court To Decide

What would be the appropriate period of limitation applicable to appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996? The Supreme Court said it would examine this issue which arose in an appeal filed by Union of India.

In this case, the appeal filed by the Union of India under Section 13 of the Commercial Courts Act read with Section 37 of the Arbitration and Conciliation was dismissed by the division bench of the Delhi High Court on the ground of delay.  The High Court followed the Supreme Court judgment in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department (2008) 7 SCC 169, wherein it was held that applicable period of limitation is governed by Article 116 of the Schedule to the Limitation Act, 1963, which prescribes 90 days' for appeals to the High Court under the CPC. 

While considering the appeal, the bench comprising Justices Indu Malhotra and Ajay Rastogi noted other two judgments [ Union of India v. Varindera Constructions Ltd. (2020) 2 SCC 111 and N.V. International v State of Assam & Ors. (2020) 2 SCC 109] in which it was observed that the period of limitation for filing an appeal u/S. 37 should be the same as under Section 34 i.e. 120 days.

Further, the Court noted that Section 10 of the Commercial Courts Act, 2015 provides that where the subject matter of an arbitration is a commercial dispute of a specified value, and if such arbitration is other than an international commercial arbitration, all applications and appeals arising out of such arbitration under the Arbitration and Conciliation Act, 1996 which would ordinarily lie before any principal civil court of original jurisdiction in a district (not being a High Court) shall be decided by the Commercial Court. "Section 13 (1A) provides that any person aggrieved by the judgment or order of a Commercial Court at the level of a District Judge, or the Commercial Division of a High Court may file an appeal to the Commercial Appellate Division of that High Court within a period of 60 days' from the date of the judgment or order. The proviso to sub-section (1A) provides that an appeal u/S 37 of the Arbitration and Conciliation Act,1996 would lie before the Commercial Court.", the bench said.

Thus, the conundrum to be answered is as to what would be the appropriate period of limitation applicable to appeals filed u/S. 37 of the Arbitration and Conciliation Act, 1996, the bench said while posting the appeal for final hearing on 16th February 2021. 

Consolidated Engineering Enterprises

In this judgment delivered in April, 2008, the Supreme Court held that the provisions of Limitation Act apply to all proceedings under the AC Act, both in court and in arbitration, except to the extent expressly excluded by the provisions of the AC Act. It was further observed that section 14(2) of the Limitation Act, 1963 is applicable to proceedings under section 34(1) of the Act. "Article 116 of the Schedule prescribes the period of limitation for appeals to High Court (90 days) and appeals to any other court (30 days) under the Code of Civil Procedure, 1908. It is now well settled that the words 'appeals under the Code of Civil Procedure, 1908' occurring in Article 116 refer not only to appeals preferred under Code of Civil Procedure, 1908, but also to appeals, where the procedure for filing of such appeals and powers of the court for dealing with such appeals are governed by Code of Civil Procedure.", the court had observed therein.

Varindera Constructions Ltd. and N.V. International

In these Judgments, the court held that 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 cannot be condoned. This 120 days includes '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'. These judgments do not consider the impact of Commercial Courts Act, 2015 in this regard.

Case: UNION OF INDIA vs. M/S ASSOCIATED CONSTRUCTION CO. [SLP Diary No(s). 18079/2020]

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