Case Note & Summary
The appeal arises from a judgment of a Single Judge of the Bombay High Court dismissing an arbitration petition filed by Oil and Natural Gas Corporation Ltd. (ONGC) under Sections 30 and 33 of the Arbitration Act, 1940, as time-barred under Article 119 of the Limitation Act, 1963. ONGC and Nippon Steel Corporation Ltd. (Nippon) entered into an agreement on 28th December 1985 for a project in the Arabian Sea. Disputes arose and were referred to arbitration. The arbitrators passed an award on 2nd March 1996 and forwarded it to ONGC's advocates on the same day. On 4th March 1996, the arbitrators sent a letter to ONGC's advocates intimating that the award had been signed and declared on 2nd March 1996 and that the original award had been sent to them. ONGC filed an arbitration petition on 8th July 1996, which was beyond 30 days from the date of notice of filing of the award. The Single Judge held that the petition was barred by limitation. ONGC appealed, arguing that the limitation period should run from the date of receipt of the award or that the period spent in pursuing a remedy before the arbitrators should be excluded under Section 14 of the Limitation Act. The Division Bench upheld the Single Judge's decision, holding that the limitation period under Article 119 runs from the date of notice of filing of the award in court, not from the date of receipt of the award. The court also held that Section 14 of the Limitation Act does not apply to proceedings before arbitrators as they are not a 'court'. The appeal was dismissed with no order as to costs.
Headnote
A) Limitation Act - Article 119 - Arbitration Act, 1940 - Sections 30, 33 - Limitation period for setting aside award - The period of 30 days for filing an application to set aside an award under Article 119 of the Limitation Act, 1963 commences from the date of notice of the filing of the award in court, not from the date of receipt of the award by the party. The court held that the notice of filing of the award is the relevant trigger for limitation, and mere knowledge of the award is insufficient. (Paras 1-10) B) Limitation Act - Section 14 - Exclusion of time - Arbitration Act, 1940 - Section 14 of the Limitation Act, 1963, which allows exclusion of time spent in pursuing a remedy in good faith in a court without jurisdiction, is not applicable to proceedings before arbitrators. The court held that arbitrators are not a 'court' for the purposes of Section 14, and therefore the period spent in pursuing a remedy before the arbitrators cannot be excluded. (Paras 11-15)
Issue of Consideration
Whether the arbitration petition under Sections 30 and 33 of the Arbitration Act, 1940 was barred by limitation under Article 119 of the Limitation Act, 1963, and whether the period spent in pursuing a remedy before the arbitrators could be excluded under Section 14 of the Limitation Act.
Final Decision
Appeal dismissed with no order as to costs. The Single Judge's order dismissing the arbitration petition as time-barred is upheld.
Law Points
- Limitation period for setting aside arbitration award under Article 119 of Limitation Act
- 1963 runs from date of notice of filing of award in court
- not from date of receipt of award by party
- Computation of limitation under Section 14 of Limitation Act
- 1963 not applicable to arbitration proceedings under Arbitration Act
- 1940
