Case Note & Summary
The petitioners, Dr. Writer's Food Products Pvt. Ltd. and two individuals, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 4th June, 2015, and a subsequent order dated 16th February, 2017, passed under Section 33 of the Act. The respondent, The Cosmos Co-operative Bank Limited, raised a preliminary objection that the petition was barred by limitation under Section 34(3) of the Act. The admitted facts showed that the award was passed on 4th June, 2015, and a copy was served on the petitioners immediately. On 29th December, 2016, the respondent filed an application under Section 33 for correction of a clerical error in the cause title of the award, which was allowed on 16th February, 2017. The petitioners filed the present petition on 24th April, 2017. The court noted that the limitation period for challenging the award is three months from the date of receipt of the award, extendable by a further thirty days on sufficient cause. The petitioners received the award in June 2015, and the petition was filed in April 2017, clearly beyond the prescribed period. The court held that the application for correction under Section 33 does not extend the limitation period for challenging the award. The petition was dismissed as barred by limitation.
Headnote
A) Arbitration Law - Limitation for Challenging Award - Section 34(3) Arbitration and Conciliation Act, 1996 - The petition challenging the arbitral award was filed beyond the prescribed period of three months plus thirty days from the date of receipt of the award. The application for correction of a clerical error under Section 33 does not extend the limitation period for challenging the award. The court held that the petition is barred by limitation and dismissed it. (Paras 1-9)
B) Arbitration Law - Correction of Award - Section 33 Arbitration and Conciliation Act, 1996 - An application for correction of a clerical error in the award does not affect the limitation period for filing a challenge under Section 34. The court held that the limitation period runs from the date of receipt of the original award, not from the date of correction. (Paras 4-9)
Issue of Consideration
Whether the petition challenging the arbitral award dated 4th June, 2015 is barred by limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996, and whether the application for correction of the award under Section 33 extends the limitation period.
Final Decision
The court dismissed the petition as barred by limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996.
Law Points
- Limitation period for challenging arbitral award under Section 34(3) of Arbitration and Conciliation Act
- 1996 is three months from date of receipt of award
- extendable by thirty days on sufficient cause
- but not beyond. Application for correction of clerical error under Section 33 does not extend limitation period for challenging award.
Case Details
2019 LawText (BOM) (09) 66
Commercial Arbitration Petition No.486 of 2017
Mr. Avinash H. Fatangare for the Petitioners, Mr. Joel H. Carlos for the Respondent
Dr. Writer's Food Products Pvt. Ltd., Madhav Laxman Apte, Vaman Madhav Apte
The Cosmos Co-operative Bank Limited
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award and a subsequent correction order.
Remedy Sought
The petitioners sought to set aside the arbitral award dated 4th June, 2015 and the order dated 16th February, 2017 passed under Section 33 of the Act.
Filing Reason
The petitioners challenged the arbitral award on merits, but the respondent raised a preliminary objection of limitation.
Previous Decisions
The arbitral award was passed on 4th June, 2015. On 29th December, 2016, the respondent applied for correction of a clerical error, which was allowed on 16th February, 2017.
Issues
Whether the petition challenging the arbitral award dated 4th June, 2015 is barred by limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996.
Whether the application for correction of the award under Section 33 extends the limitation period for challenging the award.
Submissions/Arguments
The respondent argued that the petition was filed beyond the limitation period of three months plus thirty days from the date of receipt of the award.
The petitioners contended that the limitation period should run from the date of the correction order, or that the application for correction extended the period.
Ratio Decidendi
The limitation period for challenging an arbitral award under Section 34(3) of the Arbitration and Conciliation Act, 1996 is three months from the date of receipt of the award, extendable by thirty days on sufficient cause. An application for correction of a clerical error under Section 33 does not extend the limitation period for challenging the award. The petition filed beyond the prescribed period is barred by limitation.
Judgment Excerpts
By this petition filed under section 34 of the Arbitration & Conciliation Act, 1996 (for short “the Arbitration Act”), the petitioners have impugned the arbitral award dated 4th June, 2015 and the order dated 16th February, 2017 passed by the learned arbitrator which was passed under section 33 of the Arbitration Act.
Mr.Carlos, learned counsel appearing for the respondent raised an issue of limitation in filing the arbitration petition under section 34(3) of the Arbitration Act insofar as the arbitral award dated 4th June, 2015 is concerned.
Procedural History
The arbitral award was passed on 4th June, 2015. On 29th December, 2016, the respondent applied for correction of a clerical error under Section 33. The arbitrator allowed the correction on 16th February, 2017. The petitioners filed the present petition under Section 34 on 24th April, 2017. The respondent raised a preliminary objection of limitation.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 34(3), Section 33
