Case Note & Summary
The dispute arose between Oil & Natural Gas Corporation Ltd. (ONGC) and M/s Nippon Steel Corporation Ltd. regarding an arbitration award dated 2.3.1996. ONGC challenged the award on the grounds of limitation, arguing that the filing of the award by its counsel did not constitute notice under Section 14(2) of the Indian Arbitration Act, 1940. The High Court had previously ruled that ONGC's application to set aside the award was time-barred, as they had knowledge of the filing prior to receiving formal notice from the court. The Supreme Court examined whether the filing of the award by M/s Little & Co., the counsel for ONGC, constituted deemed notice to ONGC. The court found that the counsel was acting at the behest of the arbitrator and not as a representative of ONGC, thus the doctrine of constructive notice did not apply. The court emphasized that the limitation period for setting aside the award should be computed from the date of service of notice by the court, not from the date of knowledge of the filing of the award. The court also addressed the applicability of Order III Rule 5 of the Code of Civil Procedure, stating that it only applies when the counsel acts on behalf of the party. The court ultimately held that the High Court's interpretation was incorrect and that ONGC's application was not time-barred, thereby allowing the appeal.
Headnote
A) Arbitration Law - Filing of Award - Deemed Notice - Indian Arbitration Act, 1940, Section 14(2) - The court held that the filing of the award by the arbitrator's counsel did not constitute notice to the appellant, as the counsel was acting on behalf of the arbitrator and not as the appellant's representative. The limitation period for setting aside the award commenced only upon receipt of formal notice from the court. (Paras 1-12). B) Limitation Law - Computation of Limitation - Limitation Act, 1963, Article 119 - The court emphasized that the limitation period begins from the date of service of notice by the court, not from the date of knowledge of the filing of the award. The High Court's interpretation was found to be contrary to legislative intent. (Paras 13-20). C) Agency Principles - Representation in Court - Code of Civil Procedure, 1908, Order III Rule 5 - The court clarified that the presumption of notice to a party through their counsel applies only when the counsel acts on behalf of the party, which was not the case here as the counsel acted for the arbitrator. (Paras 21-30).
Issue of Consideration
Whether the filing of the award constituted deemed notice under Section 14(2) of the Arbitration Act, 1940, and when the limitation for setting aside the award commenced.
Final Decision
The Supreme Court allowed the appeal, ruling that the filing of the award did not constitute notice to ONGC and that the limitation period commenced from the date of service of notice by the court.
Law Points
- Arbitration Act
- Limitation Act
- constructive notice
- agency principles
- filing of award
- limitation period
