India: Limitation Starts From The Receipt Of Arbitration Award

Last Updated: 11 October 2018
Article by AMLEGALS  

Limitation period prescribed under Section 34(3) of the Arbitration Act is to be computed from the time the party receives the copy of the award.

IN THE SUPREME COURT OF INDIA
ANILKUMAR JINABHAI PATEL
VS.
PRAVINCHANDRA JINABHAI PATEL
CIVIL APPEAL NO. 3313 OF 2018
[ARISING OUT OF SLP(C) NO. 15668 OF 2018]

FACTS

In the instant case the Petitioners and Respondents are brothers and they had started a business of chemicals, fertilizers and real estate in Jalgaon, Gujarat.

In the course of their business, they set up a number of companies and partnership concerns and acquired numerous immovable & movable properties.

Both the parties and their family members decided to divide all the assets of the family to avoid any future litigation or misunderstandings. They jointly appointed their sister, Latikaben and brother-in-law Bhikhalal Nathalal Patel, as the arbitrators for the division of the family assets, by virtue of a Memorandum of Understanding (MOU) dated 21.05.1996, which was jointly signed by all the members of the family.

An Interim Memorandum of Understanding (IMOU) dated 29.06.1996 was signed by the parties herein, on behalf of themselves and their respective family members. This was done during the absence of the appointed Arbitrators in the matters relating to bank accounts, withdrawal power, NPK allocations, etc.

On 07.07.1996 the Arbitrators passed an award, while mentioning the IMOU, whereby some properties were allotted to the Petitioner and the Respondent and some properties were left undivided, with equal rights of both the Parties and their respective family members.

Further, another award was passed on 03.11.1996 to finalise the issues between the parties which was duly acknowledged by them.

On 29.11.2005 an Arbitration Petition No. 202 of 2005 had been filed by the Appellant and his family members, under Section 34 of the Arbitration Act, before the District Judge, Jalgaon, challenging the arbitral award dated 07.07.1996 on the ground that they did not receive the copy of the award until 11.08.2005 and that their signature on the copy of the award was forged.

An amendment was also sought in the same petition to challenge the Arbitral Award dated 03.11.1996 as well. This Arbitration Petition was allowed on 14.02.2011.

An Appeal was filed by the Respondent herein, challenging the judgment dated 14.02.2011 which was set aside by the High Court of Judicature at Bombay Bench at Aurangabad in W.P. No. 4669 of 2011 on 27.03.2012, holding that the challenge to the arbitral award dated 07.07.1996 was time barred under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996.

This Appeal has been filed to challenge the judgment of the High Court of Judicature of Bombay dated 27.03.2012.

ISSUES BEFORE SC

The issues raised in this case were –

  1. Whether Anilkumar Patel represented his family in the arbitration proceedings and whether Respondents are right in contending that receipt of copy of award by Anilkumar Patel was for himself and on behalf of his family members.
  2. Whether the High Court was right in holding that the application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award was barred by limitation.

OBSERVATION

The Court observed that Section 34(3) provides that an application for setting aside an award shall not be entertained by the court if it is made after three months have elapsed from the date on which the applicant had received the arbitral award.

The proviso to Section 34 further provides that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the prescribed time, it may entertain the application within a further period of thirty days 'but not thereafter'.

Reference was made to the case of Union of India v. Tecco Trichy Engineers and Contractors (2005) 4 SCC 239, where a three Judge Bench of this Court, in respect to the issue of limitation for filing application under Section 34 of the Act for setting aside the arbitral award, held that the period of limitation would commence only after a valid delivery of an arbitral award takes place under Section 31(5) of the Act.

The award dated 07.07.1996 was signed by both the arbitrators. The award was also signed by Pravinchandra Patel and Anilkumar Patel. Both of them had undertaken to implement the award with their free will and pleasure, as seen from the following:-

"As per this Arbitration "Award", both the groups and their family members have to honestly, wholeheartedly and faithfully act in accordance with and implement the transaction of the property, the IMOU which is now considered as MOU and the accounting chart in respect of the companies and the firms. The aforesaid Arbitration Award I agreed to and approved of by and our descendant guardian and heirs. We undertake to implement the same with free-will and pleasure."

After their signature in the award for having received the copy of the award, Pravinchandra Patel and Anilkumar Patel had stated as under:-

"....For ourselves and on behalf of our family members."

It is pertinent to note that the award also referred to IMOU dated 29.06.1996 in and by which the members of the respective families have authorized Pravinchandra Patel and Anilkumar Patel to act on behalf of their family members.

CONCLUDING VIEW

The Bench comprising of Hon'ble Justice RK Aggarwal and Hon'ble Justice R. Banumathi held that the limitation period prescribed under section 34(3) of the Act is to be computed from the point of time when the party concerned received the copy of the arbitral award.

Receiving of the copy of the award by Anilkumar Patel on behalf of himself and Respondent Nos. 2 to 6, under an acknowledgment, is in terms of compliance of Section 31(5) of the Act and Section 34(3) thereof and that the application filed under Section 34 of the Act by Anilkumar Patel and Appellant Nos. 1(a) to 1(d) and Respondent No.10 was barred by limitation.

Hence, this Hon'ble Court dismissed the current appeal to hold that Anilkumar Patel, accepted the copy of the award on behalf of the entire family in his capacity as the Head of the family and hence the validity of such an award cannot be challenged by the family members on the ground of not having received a copy of the award.

The appeal was thus dismissed.

AMLEGALS REMARKS

This decision has rightly established that the limitation period prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996, is to be computed from the time when the party received the copy of the award and this would indeed help prevent the misuse of time by the parties.

This content is purely an academic analysis under "Legal intelligence series".

© Copyright AMLEGALS.

Disclaimer: The information contained in this document is intended for informational purposes only and does not constitute legal opinion, advice or any advertisement. This document is not intended to address the circumstances of any particular individual or corporate body. Reade should not act on the information provided herein without appropriate professional advice after a thorough examination of the facts and circumstances of a particular situation. There can be no assurance that the judicial/quasi-judicial authorities may not take a position contrary to the views mentioned herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Singh & Associates
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions