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--------------- Print Magazine --------------
  May 2016
  April 2016

In an application for setting aside arbitration award, the limitation starts running from the date, when the signed copy of the award is delivered to the party making the application for setting it aside.

State of Maharashtra v. M/s. Art Builders Pvt. Ltd. , AIR 2011 SC 1374

Facts: The material facts of the case are brief and admitted by both sides. These may be stated thus. On March 20, 2003 the arbitrator gave a copy of the award, signed by him, to the claimant (the respondent) in whose favour the award was made. No copy of the award was, however, given to the appellant, the other party to the proceedings, apparently because the appellant had failed to pay the costs of arbitration. The respondent submitted a copy of the award in the office of the Executive Engineer (appellant No. 4) on March 29, 2003, claiming payment in terms of the award. On April 16, 2003, the Executive Engineer submitted a proposal to challenge the award before the Chief Engineer, and the Financial Advisor and Joint Secretary. The respondent sent a reminder to the Chief Engineer on June 13, 2003, for payment of the money awarded to him by the arbitrator and a second reminder to the Secretary and Special Commissioner on January 8, 2004. The Executive Engineer by his letter dated January 15, 2004, acknowledged all the three letters of the claimant and informed him that the government had decided to challenge the award before the appropriate forum.

According to the appellants, the decision to make an application for setting aside the award was taken on December 16, 2003, but no application could be made for want of a copy of the award from the arbitrator. Hence, on January 17, 2004, a messenger was sent to the arbitrator with a letter asking for a copy of the award. The arbitrator made an endorsement on the letter sent to him stating that on the request of the claimant the original award was given to him and the Xerox copy of the award (sent to him along with the letter), was being certified by him as true copy of the award. The endorsement from the arbitrator along with the Xerox/certified copy of the award was received from the arbitrator on January 19, 2004 and on January 28, 2004, the appellants filed the application under section 34 of the Act.

The respondent raised an objection regarding the maintainability of the petition contending that it was hopelessly barred by limitation. The Principal District Judge, Latur, by order dated February 15, 2007 passed in Civil Application No. 84 of 2005 (previously Suit No. 1 of 2004) upheld the respondent's contention and dismissed the appellant's application as barred by limitation.

Against the order of the Principal District Judge, the appellants preferred an appeal (Arbitration Appeal No. 2 of 2008) before the Bombay High Court.

Before the High Court, the appellants contended that they were able to obtain a copy of the award duly signed by the arbitrator only on January 19, 2004 and the period of limitation prescribed under section 34(3) of the Act would, therefore, commence from that date. The application for setting aside the award was filed on January 20, 2004 and hence, there was no question of the application being barred by limitation. In support of the contention, the appellants relied upon the last order passed in the arbitral proceedings on February 22, 2003 in which it was stated that the case was closed and the arbitrator would proceed with the framing of the award which would be declared and copies sent to both parties in due course. On behalf of the appellants it was stated that contrary to the order passed on February 22, 2003, the arbitrator did not send them a copy of the award even though a Xerox copy of the award was sent to them by the claimant-respondent to whom the arbitrator had given a copy of the award duly signed by him. In support of the submission that the period of limitation prescribed under section 34(3) of the Act would start running from the date they received a copy of the award duly signed by the arbitrator, they also relied upon section 31(5) read with section 34(3) of the Act. They also relied upon a decision of this Court in Union of India v. Tecco Trichy Engineers & Contractors , (2005) 4 SCC 239: AIR 2005 SC 1832.

Issue: Whether Xerox copy of arbitration award is acceptable where the matter had been barred by limitation?

Decisions: The High Court upheld the submissions made on behalf of the claimant-respondent, affirmed the view taken by the Principal District Judge and by judgment and order dated October 6, 2009 dismissed the appeal filed by the appellants. It took note of section 31(5) and section 34(3) of the Act and the decision of this Court in Tecco Trichy Engineers & Contractors but rejected the appellant's contention highlighting that the word used in section 31(5) is 'delivered' and not 'dispatched'.

The Supreme Court set aside the judgment and order of the High Court and of the Principal District Court, Latur.

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