Delay of more than 120 days for filing of appeals in Arbitral Proceedings not liable to be condoned: SC

A Supreme Court bench of Justices R.F. Nariman and S. Ravindra Bhat held that while filing appeals in arbitral proceedings, only a grace period of 30 days to the period of 90 days under Section 5 of the Limitation Act, 1963 shall be allowed.

The Court ruled that a delay of more than 120 days in filing appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (the 1996 Act) is not liable to be condoned.

The appellants argued that unlike Section 34 of the 1996 Act, Section 37 of the 1996 Act does not exclude Section 5 of the Limitation Act, as a result of which even if the 90 day period is over, if a condonation application is made under Section 5 of the Limitation Act, it should be considered on its own merits notwithstanding the length of delay.

The counsel for the Respondent on the other hand argued that 189 days cannot be condoned as the object of speedy resolution of disputes referred to arbitration would be subverted.

The Supreme Court held that considering the fact that an appellate proceeding is a continuation of the original proceeding, any delay beyond 120 days in the filing of an appeal under Section 37 of the 1996 Act from an application being either dismissed or allowed under Section 34 of the Arbitration and Conciliation Act, 1996 should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being decided with utmost despatch.

The Court ruled that having regard to the object of speedy resolution of all arbitral disputes which was uppermost in the minds of the framers of the 1996 Act, and which has been strengthened from time to time by amendments made thereto, a grace period of 30 days can be allowed to the period of 90 days provided by the statute for filing of appeals.