Extension/Suspension of limitation
On 23 March 2020, the Supreme Court of India extended the limitation period for all 'proceedings' with effect from 15 March 2020 until further orders. This was on account of the COVID-19 induced lockdown and the difficulties faced by lawyers as well as litigants during these times.
Subsequently, the Supreme Court on 6 May 2020 indefinitely extended the limitation period for cases under the Arbitration and Conciliation Act 1996 (Arbitration Act) and §138 of the Negotiable Instruments Act 1881 (NI Act) with effect from 15 March 2020.
The Supreme Court has now clarified the applicability of these orders in relation to various statues, including the Arbitration Act.
Clarifications regarding extension of limitation period
The position regarding extension of limitation stands as below:
- In relation to the Arbitration Act, the Supreme Court has clarified that the Orders of 23 March 2020 and 6 May 2020 will also apply to 29A (time frame for pronouncing award) as well as §23(4) (time frame within which parties are required to complete their pleadings). Consequently, there is no need to approach a court for extending the time frame available for the tribunal to pronounce an award.
- In relation to the mandated pre-litigation mediation contemplated under §12A of the Commercial Courts Act 2015, the period of limitation stands extended by 45 days from when the lockdown is lifted.
- In relation to service of notices, summons and exchange of pleadings,taking note of the difficulties in physical delivery, the Supreme Court has permitted service by way of e-mail, fax and instant messaging apps with the requirement that service of such documents shall also be made through email simultaneously on the same date.
- However, the Supreme Court has refused to interfere with the period of validity of a cheque and has left it to the wisdom of the RBI to make any alterations as it deems fit.
Limitation under Section 34 of the Arbitration Act: an unaddressed question?
A §34 challenge can be filed within 3 months from the date of the receipt of the award, or from the date on which an application for correction of the award has been disposed off. On being satisfied that the applicant was prevented by sufficient cause, a court may extend this timeframe by another 30 days.
What then happens when the 3 month period expires before 15 March 2020 but the additional 30 days expire after the courts had shut due to COVID-19? The judgment of the Supreme Court in Assam Urban Water Supply & Sewarage Board v Subash Projects & Marketing Ltd (2012) 2 SCC 624 seems to suggest that in such an eventuality, an applicant cannot take advantage of the closure of courts as the "prescribed period" of 3 months has already expired.
A clarification by the Supreme Court in this regard would be beneficial as such questions are likely to arise in various High Courts. We shall track and update about any subsequent clarifications.
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