By EDITORIAL TEAM - INSOL India Posted On : April 21, 2020

The limitation period for filing of an application to set aside a domestic award in India is 3 months (extendable at the discretion of the court by 30 days) from the receipt of the arbitral award by the aggrieved party as provided under proviso to Section 34(3) of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) but not thereafter. This time limit is of utmost importance and a challenge to an award filed after 3 months and 30 days of receipt of the arbitral award by the aggrieved party has to be rejected.

The pertinent issue is the applicability of such limitation period as prescribed under Section 34(3) of the Arbitration Act, and held as sacrosanct by the Supreme Court, to re-filing of an application to set aside a domestic award. Consequentially, the powers of the Court to condone delays in the re-filing of such application must also be examined.

The rigors of condonation of delay in re-filing are not as strict as condonation of delay of filing under Section 34(3) of the Arbitration Act. But that does not mean that a party can be permitted an indefinite and unexplainable period for refilling the application.

An important observation of the Court in the case of Union of India v. Bharat Biotech International Ltd. held that the Arbitration Act ultimately sought to breathe life into a much needed alternate system of dispute resolution and lend greater credence to it by removing any unwarranted obstacles to its smooth functioning. A liberal approach while dealing with an application for condonation of delay in challenging the award would only endanger and frustrate the purpose of enactment of the Arbitration Act.

In the context of the Arbitration Act, a liberal approach in condoning delays in refiling would, prima facie, run counter to the intention of Parliament which has employed plain language to prescribe a cut-off date beyond which there is no latitude for condonation of delay. And this is for very good reason. Across the globe, it has been accepted that there is a pressing need to bring adjudicatory proceedings to a prompt and expeditious conclusion, especially where commercial and business conflicts arise.

Thus, it should be wholly impermissible to extend or expand the time for concluding judicial proceedings at the second stage (the stage of re-filing) when such expansion or extension is impermissible at the initial stage of filing objections to an award as was observed by HMJ Vikramajit Sen in Executive Engineer.