Case Note & Summary
The appeal arose from an order of a learned single Judge of the Bombay High Court setting aside an arbitral award dated 17th August 2006 on the ground that it was not made within the time stipulated in the arbitration agreement. The appellant, Bharat Oman Refineries Ltd., and the respondent, M/s. Mantech Consultants, entered into an agreement on 30th December 1996 for work on an interstate pipeline project. The agreement contained an arbitration clause which provided that the award shall be made within four months from the date of entering upon the reference or within such extended time as the parties may agree. Disputes arose, and the respondent invoked the arbitration clause. By order dated 23rd February 2001, the Court appointed S.K. Saini, an employee of the appellant, as the sole arbitrator. The arbitrator entered upon the reference on 14th June 2001 and concluded arguments on 21st April 2004. However, the award was published on 17th August 2006, more than five years after the reference. The respondent filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award. The learned single Judge allowed the petition, holding that the award was not made within the stipulated time. The appellant appealed. The Division Bench upheld the single Judge's order, finding that the award was made beyond the four-month period stipulated in the arbitration agreement and that there was no evidence of any extension of time by the parties. The Court rejected the appellant's argument that the time limit was directory and that the respondent had waived the objection by participating in the proceedings. The Court held that the time limit was mandatory and that the award was invalid. The appeal was dismissed.
Headnote
A) Arbitration Law - Time Limit for Award - Section 34 of Arbitration and Conciliation Act, 1996 - The arbitration agreement stipulated that the award shall be made within four months from the date of entering upon the reference or within such extended time as the parties may agree. The award was made on 17th August 2006, more than five years after the arbitrator entered upon the reference on 14th June 2001, and without any extension of time by the parties. The Court held that the award was not made within the stipulated time and was therefore invalid and liable to be set aside. (Paras 1-10)
Issue of Consideration
Whether the arbitral award made beyond the time stipulated in the arbitration agreement is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The appeal is dismissed. The order of the learned single Judge setting aside the arbitral award is upheld.
Law Points
- Arbitration award must be made within time stipulated in arbitration agreement
- failure to do so renders award invalid
- Section 34 of Arbitration and Conciliation Act
- 1996
- interpretation of arbitration clause
- time limit for award
- extension of time by consent
- waiver of time limit
