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National Highways Authority of India Vs. Ssangyong Engineering & Construction Co. Ltd. - (High Court of Delhi) (25 Nov 2019)

A party to an arbitration proceeding can challenge the arbitral award as soon as he receives it



The challenge in present petition under Section 34 of the Arbitration and Conciliation Act, 1996, is to an award/interim award dated May 18, 2019 passed by the Arbitral Tribunal whereby the Arbitral Tribunal has allowed the application filed by the Respondent herein for grant of two amounts of Rs. 1,32,79,591 and 92,22,236. Learned counsel appearing for the Respondent has taken a preliminary objection on the maintainability of the petition on the ground that, it is barred by limitation.

Learned Senior Counsel appearing for the Petitioner states that, the first petition was filed as an appeal under Section 37 of the Act of 1996 on August 14, 2019 and the appeal was pursued by the petitioner till October 22, 2019, when the counsel appearing for the Petitioner withdrew the appeal as was not maintainable. As, between August 14, 2019 and October 22, 2019, the Petitioner, was prosecuting a wrong remedy, it shall be entitled to the benefit of Section 14 of the Limitation Act, 1963 and if that period is excluded, the petition filed by the petitioner on November 06, 2019 is within limitation.

Present Court is not in agreement with the submission made by Petitioner for the reason that, the date of award being May 18, 2019, and there is no dispute that the copy of the award having received on that day itself, the limitation of three months as contemplated under Section 34(3) of the Act of 1996 expired on August 18, 2019. Assuming for a moment, the Petitioner could have sought the benefit of further 30 days in filing the petition, even those 30 days had expired on September 18, 2019.

The Petitioner was notified by the Registry to file it in the correct category which is under Section 34 of the Act of 1996 and the petition having been filed on November 06, 2019, which is beyond the period of limitation which has expired on September 18, 2019 or for that matter on October 09, 2019. In view of the judgment of the Supreme Court in the case of Union of India v. Popular Construction Company, it is settled position of law that, recourse to the Court against an arbitral award cannot be made beyond the period prescribed under Section 34 of the Act of 1996, the petition is liable to be dismissed.

Similarly, reiterating the position of law as held in the case of Popular Construction Company, the Apex Court in P. Radha Bai and Ors. v. P. Ashok Kumar and Ors., also held that a party to an arbitration proceeding can challenge the arbitral award as soon as he receives it. It was further held that once an award is received, the party is presumed to have knowledge of the same, and the limitation period under Section 34(3) of the Act of 1996 is said to have commenced. The present petition being hit by limitation is not maintainable and the same is dismissed without going into the merits on the challenge to the impugned award.

Relevant : Union of India v. Popular Construction Company, MANU/SC/0613/2001, P. Radha Bai and Ors. v. P. Ashok Kumar and Ors., MANU/SC/1063/2018


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