Case Note & Summary
The petitioner, Maharashtra State Road Development Corporation Ltd., filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award dated 28th April 2017. The respondents raised a preliminary objection that the petition was barred by limitation under Section 34(3) of the Act. The court examined the facts: the signed copy of the award was received by the petitioner on 28th April 2017, and the petition was lodged on 26th July 2017, which was within three months. However, the court noted that Section 34(5) requires that an application under Section 34 shall be filed only after issuing prior notice to the other party. The petitioner had not issued such prior notice before filing. The court held that the requirement of prior notice is mandatory and a condition precedent. The petition filed without prior notice is defective and cannot be cured by subsequent notice. The court dismissed the petition as not maintainable, without going into the merits of the award. The decision was in favor of the respondents.
Headnote
A) Arbitration Law - Limitation for Setting Aside Award - Section 34(3) of the Arbitration and Conciliation Act, 1996 - The period of limitation for filing an application under Section 34 is three months from the date of service of the signed copy of the award, extendable by a further period of thirty days on sufficient cause shown. The court held that the petition filed on 26th July 2017 was within three months from the date of receipt of the signed award on 28th April 2017, but the failure to issue prior notice under Section 34(5) rendered the petition defective. (Paras 3-5) B) Arbitration Law - Mandatory Prior Notice - Section 34(5) of the Arbitration and Conciliation Act, 1996 - The requirement of issuing prior notice to the other party before filing an application under Section 34 is mandatory. The court held that the petition filed without such prior notice is not maintainable and the defect cannot be cured by subsequent notice. (Paras 5-7) C) Arbitration Law - Curing Defect - Section 34(5) of the Arbitration and Conciliation Act, 1996 - The court held that the requirement of prior notice under Section 34(5) is a condition precedent to the filing of the petition. The petition filed without prior notice is defective ab initio and cannot be regularized by issuing notice after filing. (Paras 6-8)
Issue of Consideration
Whether the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 is within the period of limitation prescribed under Section 34(3) read with Section 34(5) of the Act, and whether the failure to issue prior notice under Section 34(5) renders the petition defective and not maintainable.
Final Decision
The court dismissed the petition as not maintainable due to failure to comply with the mandatory requirement of prior notice under Section 34(5) of the Arbitration and Conciliation Act, 1996.
Law Points
- Limitation period for filing Section 34 petition is three months from date of service of signed award
- extendable by thirty days on sufficient cause
- Prior notice under Section 34(5) is mandatory and must be given before filing
- Filing without prior notice is defective and cannot be cured retrospectively
- Section 34(3) is a special limitation provision and not subject to Section 5 of Limitation Act
- 1963
