Case Note & Summary
The dispute arose from Civil Appeal Nos. 3882-85 of 1990 and SLP (Civil) Nos. 10832-33 of 1989 before the Supreme Court of India. By an order dated November 18, 1991, the Supreme Court referred the disputes and differences in those matters to arbitration by consent of parties, appointing Mr. J.P. Thakur, Deputy Chief Engineer (Civil), Koylanagar, Dhanbad, as the sole arbitrator. The parties were to file a regular reference agreement within two weeks and the arbitrator was to make the award within four months thereafter. The arbitrator entered the reference and made an award on February 14, 1994, which was filed before the Supreme Court. The Registry of the Supreme Court gave notice of filing of the award to the learned counsel for both parties on April 29, 1994. The respondents, M/s C.K. Ahuja and another, filed an application under Sections 14(2), 17 and 29 of the Indian Arbitration Act, 1940 on July 11, 1994, praying that the award be made rule of court and that interest at 24% be granted from the date of award. The civil appeals themselves had been dismissed by the Supreme Court on March 22, 1993 because the disputes had been referred to arbitration. During hearing of the applications, the appellant, M/s Bharat Coking Coal Ltd., sought a fresh notice about the filing of the award; such notice was issued without prejudice to the respondents' contention that limitation had already expired. The appellant filed objections to the award only on November 20, 1994, after taking inspection of the award on October 3, 1994. The main contention of the appellant was that the award was not properly filed and signed, that a copy of the award was not supplied, and that the award was not filed in the proper court; hence limitation did not run. The respondents contended that the reference was made by the Supreme Court, the award was properly filed before that court, limitation ran from the date of notice given by the Registry in April 1994, and the objections were time-barred. The respondents relied on Food Corporation of India v. E.Kuttappan, Nilkantha Shidramappa Ningashetti v. Kashinath Somanna Ningashetti, and Indian Rayon Corporation Ltd. v. Raunaq and Company Pvt. Ltd. for the proposition that once the award is filed in court and parties are aware of such filing, limitation for objections runs from that date and not from any subsequent notice. The court accepted the respondents' arguments, holding that the Registry had given notice of filing in April 1994, and no objection was filed within thirty days from that notice or from the inspection on October 3, 1994. It further held that when the Supreme Court refers a dispute to arbitration by consent without divesting itself of jurisdiction, the Supreme Court is the proper forum for filing the award and further proceedings. Even if the award could be filed in another court, a party cannot ignore the notice of filing given by the Registry and later raise an objection as to forum after the period of limitation. The objection petition also did not raise any ground of impropriety in filing the award before the Supreme Court. On merits, the court found no reason to interfere with the award. Accordingly, the Supreme Court allowed Interlocutory Application Nos. 9 to 12 of 1994, made the award a rule of the court, and awarded interest at 12% per annum from the date of the award till realisation, with no order as to costs.
Headnote
A) Arbitration Law - Limitation for Filing Objections to Arbitral Award - Indian Arbitration Act, 1940, Sections 14(2), 17, 29 - When an award is filed in court and parties have notice or knowledge of such filing, limitation for filing objections runs from the date of such knowledge and not from any subsequent formal notice; objections filed after thirty days from notice or inspection are time-barred - The Registry of Supreme Court gave notice to counsel in April 1994; counsel for objector took inspection on October 3, 1994 but objection was filed only on November 20, 1994; court relied on Food Corporation of India v. E.Kuttappan and Nilkantha Shidramappa Ningashetti to hold that the obligation of filing the award is a legal imperative and limitation runs when filing is made known - Held that the objection is hopelessly barred by limitation and cannot be considered (Paras 4-6). B) Arbitration Law - Proper Forum for Filing Arbitral Award - Indian Arbitration Act, 1940, Sections 14(2), 17, 29 - Where reference to arbitration was made by Supreme Court by consent and no court had been divested of jurisdiction, the Supreme Court is the proper forum for filing the award and passing further orders; even if the award could be filed elsewhere, an objection as to forum must be raised when notice of filing is given and cannot be raised after limitation - The appellant ignored the Registry notice and did not raise any forum objection in its objection petition; court noted State of Madhya Pradesh v. Saith and Skelton (P) Ltd. and Punjab State Electricity Board v. Ludhiana Steels Private Ltd. - Held that belated objection as to improper forum cannot be permitted (Para 6). C) Arbitration Law - Making Award Rule of Court and Interest - Indian Arbitration Act, 1940, Sections 17 and 29 - Applications for making the award rule of court allowed; award made rule of court; interest at 12% per annum from the date of award till realisation granted - No valid objections on merits; Interlocutory Application Nos. 9 to 12 of 1994 allowed - Held that applicants are entitled to interest @12% from the date of award till realisation with no order as to costs (Para 6).
Issue of Consideration
Whether objections to the arbitral award were filed within limitation; whether the award was filed in the proper court; whether the award should be made rule of court and interest granted.
Final Decision
The Supreme Court allowed Interlocutory Application Nos. 9 to 12 of 1994, made the arbitral award dated February 14, 1994 a rule of the court, and directed payment of interest at 12% per annum from the date of the award till realisation. No order as to costs.
Law Points
- Limitation for objections to arbitral award runs from date of knowledge of filing of award
- not from subsequent formal notice
- filing of award in court is legal imperative
- forum for filing award is court that referred dispute to arbitration unless divested
- objection as to forum must be raised at first opportunity and cannot be raised after limitation
- award made rule of court with 12% interest from date of award
