Limitation Period To File Under Section 34 Of Arbitration Act To Commence As Soon As Parties Avail A Copy Of Signed Arbitration Award

KEY TAKEAWAYS

• This case that led to this decision was Haryana Bijli Vitran Nigam Ltd v. M/s Navigant Technologies Pvt Ltd.
• A Bench of Justices Indu Malhotra and Ajay Rastogi held that the limitation period to file a petition under Section 34 of the Arbitration and Conciliation Act will commence as soon as the relevant parties avail their signed copy of the arbitration award.
• "There is only one date recognised by law i.e. the date on which a signed copy of the final award is received by the parties, from which the period of limitation for filing objections would start ticking." The Court read.
• If the arbitral tribunal consists of a three member panel, if anyone of them expresses a dissenting opinion, they must announce the same on the date of the finality of the arbitration award, and it must be as per Section 29A of the Arbitration Act regulations, regarding the same.

INTRODUCTION

The Bench observed that there will be no finality to the award, till the moment it is signed, meaning that as soon as the arbitral tribunal signs it, it has a legal effect. A petition was filed by Bijli Vitran Nigam on 10th September 2018- against the arbitration award passed in favour of Navigant Technologies Pvt Ltd, which was signed by two of the three arbitrators on 27th, April 2018. The three member panel/arbitral tribunal passed the arbitration award, with two of the members in favour of Navigant technologies, and one member announced their dissenting opinion. The same petition was dismissed by the Civil Court on the grounds that as per Section 34(3) of the Arbitration and Conciliation Act, any objections must be filed within three months of signing of the arbitration award, and that even if the petitioner has been provided with the benefit of 30 days as mentioned in the Act, he should have filed the petition on 26th August 2018, and not any further, and the High Court upheld this order. The Supreme Court took note of the fact that even though two of the arbitrators had signed the award on 27th April, the parties only availed their copy on 12th May 2018, and the third arbitrator only expressed their dissenting opinion on 19th May. Therefore, the copies of the signed award along with the dissenting opinion were handed over to the parties and arbitrators only on 19th May 2019.

WHAT'S HAPPENING NOW?

"There is only one date recognised by law i.e. the date on which a signed copy of the final award is received by the parties, from which the period of limitation for filing objections would start ticking. There can be no finality in the award, except after it is signed, because signing of the award gives legal effect and finality to the award. The date on which the signed award is provided to the parties is a crucial date in arbitration proceedings under the Indian Arbitration and Conciliation Act, 1996. It is from this date that  the period of 30 days' for filing an application under Section 33 for correction and interpretation of the award, or additional award may be filed; and the arbitral proceedings would terminate as provided by Section 32(1) of the Act; the period of limitation for filing objections to the award under Section 34 commences.", the court opined. Another observation made by the Court was that in an arbitral tribunal or a panel that consists three members, and if one of the members expresses a dissenting opinion, it must be on the same must be announced on the same date as the final award, and not at any other further date, as regulated by Section 29A of the Arbitration and Conciliation Act. The Court also made various other observations such as-
"Section 31(1) is couched in mandatory terms, and provides that an arbitral award shall be made in writing and signed by all the members of the arbitral tribunal. If the arbitral tribunal comprises more than one arbitrator, the award is made when the arbitrators acting together finally express their decision in writing, and is authenticated by their signatures An award takes legal effect only after it is signed by the arbitrators, which gives it authentication. There can be no finality of the award, except after it is signed, since signing of the award gives legal effect and validity to it. The making and delivery of the award are different stages of an arbitration proceeding. An award is made when it is authenticated by the person who makes it. The statute makes it obligatory for each of the members of the tribunal to sign the award, to make it a valid award. The usage of the term "shall" makes it a mandatory requirement. It is not merely a ministerial act, or an empty formality which can be dispensed with. The dissenting opinion of a minority arbitrator can be relied upon by the party seeking to set aside the award to buttress its submissions in the proceedings under Section 34. At the stage of judicial scrutiny by the Court under Section 34, the Court is not precluded from considering the findings and conclusions of the dissenting opinion of the minority member of the tribunal."

CONCLUSION

Taking note of the fact that the objections have been filed in the instant case within the period of limitation prescribed under Section 34(3) from the date of receipt of the signed award, the bench allowed the appeal.

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