In its recent judgment in the case of Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s Navigant Technologies Pvt. Ltd.1, the Hon'ble Supreme Court reiterated its position on the period of limitation applicable on a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("Act"). The moot question in the present dispute was whether the period of limitation for filing a petition under Section 34 of the Act would commence from the date on which the draft award is circulated, or the date on which the signed copy of the award is provided to the parties. The present article briefly examines the findings of the Hon'ble Supreme Court in the afore-mentioned matter.
Upon the termination of a Service Level Agreement dated 2 May 2012 ("Agreement") executed between Dakshin Haryana Bijli Vitran Nigam Ltd. ("Appellant") & M/s Navigant Technologies Pvt. Ltd. ("Respondent"), disputes under the Agreement were referred to an Arbitral Tribunal comprising of three arbitrators as per Clause 13 of the Agreement.
Upon completion of the proceedings before it, the arbitral tribunal passed an award split by a 2:1 ratio, whereby the majority allowed the Claims of the Respondent, while the third arbitrator dissenting with the majority passed a minority award. On 27 April 2018, the parties were intimated of the majority award and informed that the minority award would be rendered separately, and were provided with a draft copy of the majority award for the purpose of identifying any computational, clerical or typographical errors which would be taken up on 12 May 2018.
On 12 May 2018, the parties were provided with a copy of the dissenting award passed by the third arbitrator and the matter was put up on 19 May 2018 with instructions to the parties to identify any computational, clerical and typographical errors in the minority opinion in the interim. Since no such errors were brough to notice of the arbitral tribunal till such date, the parties were provided with signed copies of the final award on 19 May 2018 and the proceedings stood terminated.
Aggrieved by the award, the Appellant filed its objections under Section 34 of the Act before the Hon'ble Civil Court, Hisar, Haryana on 10 September 2018, submitting that objections were preferred within the three (3) months plus the 30-day additional period prescribed under Section 34 (3) of the Act, calculated from 12 May 2018, the date of receipt of the award. The said petition came to be dismissed by the Civil Court for being filed beyond the prescribed limitation period, holding that the majority award had been made available to the parties on 27 April 2018. Aggrieved by the dismissal, the Appellant preferred an appeal under Section 37 of the Act, which was also dismissed by the Hon'ble High Court vide order dated 11 December 2019.
The order of the Hon'ble High Court was assailed by the Appellant before the Hon'ble Supreme Court by way of a Special Leave Petition, wherein the rival opinions were tested on law and the issue was put to a quietus.
Arguments advanced by the parties
The Appellant contended that the impugned order was erroneous inasmuch as Section 34 (4) of the Act encompasses both majority and the minority award, thus the majority award alone could not be interpreted to mean the arbitral award, since such a view would render the dissenting opinion of the minority irrelevant.
The Respondent on the other hand, supported the dismissal on grounds of limitation, stating that since the majority award was pronounced on 27 April 2018, the period for computation of limitation began on such date. The Respondent further contended that the minority opinion passed by the third arbitrator could not be considered an award for the purpose of computing the period of limitation, since it could not be enforced as an award and was merely an opinion. The Respondent further stated that Section 29 (1) of the Act also contemplates that only the view of the majority is the award.
Findings of the Court
After examining rival submissions of the parties and the scheme of the Act, the Court concluded that the Act recognized only one award which may be unanimous or split in a majority award and dissenting opinion. The Court noted that although it is only the majority award that is capable of being enforced as an award and the view of the dissenting arbitrator is merely an opinion, however the aggrieved party is at liberty to draw support from the dissenting opinion.
The Court recognized the prerequisite under Section 31 (2) of the Act that required an award to be signed by members of the arbitral tribunal. An award made in writing becomes final only upon it being authenticated by way of signatures of members of the arbitral tribunal who made it. The Court noted the usage of the word "shall", which made this condition a mandatory prerequisite, that cannot be dispensed with. The Court also stated that a conjoint reading of Section 31 (1) and sub-section (4) suggests that the Act envisages only a single date upon which the arbitral award is passed i.e., the date on which the signed copy of the award is made available to the parties, in line with the mandate under Section 31 (5) requiring the arbitral tribunal to provide a signed copy of the award to the parties.
Thus, the date relevant for computation of limitation is the date of delivery of not any copy, but specifically the signed copy of the award. The Court further held that a dissenting opinion, if any, is also to be delivered on the same date as the majority award and not on a date thereafter, since the arbitral tribunal becomes functus officio thereafter. Thus, the period of limitation commences from the date on which a signed copy of the final award is received by the parties.
The Court further detailed the relevance of a dissenting opinion to the adjudicatory process. The Court stated that the Act does not preclude an aggrieved party to rely upon the contents of the dissenting opinion to buttress its submissions in annulment proceedings under Section 34 of the Act.
The Court applied the law enunciated by it to the factual matrix of the case before it to hold that since the signed copy of the final award was made available to the parties on 19 May 2018 the period of limitation for filing objections under Section 34 of the Act would reckon from such date.
In furtherance thereof, the Court held the Section 34 petition filed by the Appellant to be within the period of limitation prescribed under the Act. The Court accordingly set aside the orders passed by the Courts below and restored the petition of the Appellant for adjudication on merits.
The authors wish to acknowledge the research and assistance rendered by Harshvardhan Korada, a student of Amity Law School, Delhi.
1. Civil Appeal No. 791 of 2021
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