Delhi High Court: Objections to Assail Arbitral Awards must be Filed within Limitation Period Under Section 34 of Arbitration Act

Delhi High Court: Objections to Assail Arbitral Awards must be Filed within Limitation Period Under Section 34 of Arbitration Act

The Delhi High Court by its single judge Justice Navin Chawla in matter of Ambrosia Corner House Pvt. Ltd. vs. Hangro Foods while hearing a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') which sought to challenge the Arbitral Award dated 14th March, 2022 passed by the learned Sole Arbitrator ruled that the right to prefer objections to assail the Arbitral Award under Section 34 of the Act, though extremely limited, is a valuable right, and that the same cannot be denied unless the party concerned has clearly failed to file the objection petition within the strict period of limitation prescribed under the Act.

The learned senior counsel for the respondent had raised a preliminary objection on the maintainability of the present petition contending that the same had been filed beyond the period prescribed in Section 34(3) of the Act, including the maximum period of delay that can be condoned by this Court in filing of the present petition.

The petitioner did not dispute that the period of three months under Section 34(3) of the Act for filing of the petition expired on 13th June, 2022. Additionally, the Court was closed for summer vacation between 4th June, 2022 till 1st July, 2022. For the purpose of limitation, by the Notification dated 20th May, 2022 issued by the High Court, the Court was deemed to have re-opened only on 4th July 2022. The petition was filed by the petitioner on 4th July, 2022. The same was, however, marked defective by the Registry of the Court. Thereafter, the petitioner then re-filed the petition on 1st August, 2022, when it was accepted for listing by the Registry of this Court.

The respondent contended that period of three months prescribed for filing of the petition under Section 34 of the Act had expired, which was during the summer vacation of this Court, the petition, in terms of Section 4 of the Limitation Act, 1963 (hereinafter referred to as the 'Limitation Act'), could have been filed on the date of the re-opening of the Court after the summer vacation. However, as the filing of the petition on 4th June, 2022 was 'non-est', the petitioner was not entitled to seek benefit of Section 4 of the Limitation Act.

On the other hand, the learned counsel for the petitioner submitted that the petition having been filed on 4th July, 2022, was filed within the period prescribed in Section 34(3) of the Act. He submitted that though the petition was not accompanied with a copy of the Impugned Award, the same contained the complete particulars and grounds for challenge of the Award. He submitted that the petition was signed on each page by the Director of the petitioner Company and was also signed by the counsel, whose vakalatnama was also filed.

The Court opined that a more liberal approach is to be adopted by the Court while considering whether the filing should be treated as 'non-est.' The Court was of the view that the first filing on 4th July, 2022 cannot be treated as 'non-est' filing. At best, the petitioner committed an error in not filing the documents in a separate folder as prescribed in the Delhi High Court (Original Side) Rules, 2018, stated the Court.

Further reference was placed by the Court on the decision passed by the division bench of the Court in Oriental Insurance Co Ltd. vs. Air India Ltd. where it was held that a filing could be considered as 'non-est' if it was filed without signatures of either the party or its authorized or appointed counsel.

Additionally, it was clarified that the Court must assess the facts of each case while determining the issue of the filing being considered as 'non-est.'

In the present case, the High Concluded that the conduct of the petitioner clearly indicated its endeavor to file a proper petition under Section 34 of the Act on 4th July, 2022, that is, the date of re-opening of the Court for the purposes of limitation in terms of Section 4 of the Limitation Act. Thus, the Court held that the petition was, therefore, filed within the period prescribed under Section 34(3) of the Act.