Case Note & Summary
The Petitioner, a constituent, challenged an arbitral award dated 19 September 2009 passed by a panel of Arbitrators appointed under the Byelaws, Rules and Regulations of the National Stock Exchange of India Limited (NSEIL). The award rejected all his claims on merits. The Petitioner raised a specific ground that the award was passed beyond the mandatory period of six months prescribed under the Byelaws of NSEIL, and since there is no provision for seeking extension after the expiry of that period, the award is illegal and liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996. The Respondents resisted this contention. The court examined the Byelaws and noted that the arbitration reference was filed on 10 July 2008, and the award was passed on 19 September 2009, which is beyond the six-month period. The court held that the time limit is mandatory and the award being passed after the expiry of the prescribed period without any extension is illegal. Consequently, the court set aside the award and remitted the matter for fresh arbitration.
Headnote
A) Arbitration - Time Limit for Award - Byelaws of NSEIL - Mandatory Period - The award was passed beyond the mandatory six-month period prescribed under the Byelaws of NSEIL, and there is no provision for seeking extension after the expiry of that period. The court held that such an award is illegal and liable to be quashed and set aside under Section 34 of the Arbitration and Conciliation Act, 1996. (Paras 2, 6-8)
Issue of Consideration
Whether an arbitral award passed beyond the mandatory six-month period prescribed under the Byelaws of NSEIL, without any provision for extension after expiry, is illegal and liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The court allowed the petition, set aside the arbitral award dated 19 September 2009, and remitted the matter for fresh arbitration.
Law Points
- Arbitration award beyond mandatory six-month period under Byelaws of NSEIL is illegal
- No provision for extension after expiry
- Award liable to be set aside under Section 34 of Arbitration and Conciliation Act
- 1996
Case Details
2012 LawText (BOM) (07) 186
Arbitration Petition No. 158 of 2010
Mr. Vijay M. Waghela for the Petitioner, Ms. Chaitra Rao i/by Juris Matrix for the Respondents
Mr. Bhanuchandra J. Doshi
M/s. Motilal Oswal Securities Ltd. & M/s. R. Natwarlal Parekh Securities P. Ltd.
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Nature of Litigation
Challenge to arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996
Remedy Sought
Petitioner sought to set aside the arbitral award dated 19 September 2009
Filing Reason
Award passed beyond mandatory six-month period under Byelaws of NSEIL
Previous Decisions
Arbitral award dated 19 September 2009 rejected all claims of Petitioner on merits
Issues
Whether the arbitral award passed beyond the mandatory six-month period under the Byelaws of NSEIL is illegal and liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
Petitioner argued that the award was passed beyond the mandatory six-month period prescribed under the Byelaws of NSEIL and there is no provision for extension after expiry, making the award illegal.
Respondents resisted the contention, arguing that the award was valid.
Ratio Decidendi
An arbitral award passed beyond the mandatory six-month period prescribed under the Byelaws of NSEIL, without any provision for extension after expiry, is illegal and liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Judgment Excerpts
The award so passed was beyond the mandatory period of six months which is contrary to the Byelaws of NSEIL, and as there is no provision for seeking extension after expiry period; such award is illegal and liable to be quashed and set aside.
Procedural History
Parties entered into agreement in 2004. Dispute arose in January 2008. Petitioner filed complaint on 28 January 2008. Arbitration reference filed on 10 July 2008. Award passed on 19 September 2009. Petitioner challenged award under Section 34 of Arbitration and Conciliation Act, 1996 on 26 June 2012. Judgment pronounced on 17 July 2012.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
