High Court of Karnataka Reviews Commercial Court's Rejection of Limitation Objection in Arbitration Award Challenge. Dealership Termination Leading to Arbitral Award and Dispute Over Whether Section 34 Application Was Filed Within Time Under Section 34(3) of Arbitration and Conciliation Act, 1996 Given Communication From Arbitration Centre.

Writ petition under Articles 226 and 227 of the Constitution of India challenging the order dated 08.01.2025 passed by the Commercial Court rejecting the petitioner's application (IA No.1) that the Section 34 petition was barred by limitation.

Petitioner sought to set aside the order dated 08.01.2025, declare Com.A.P. No.112/2024 as not maintainable and barred by limitation, and allow IA No.1 filed in the Commercial Court.

HPCL filed a Section 34 application to set aside the arbitral award; the petitioner contended it was barred by limitation; the Commercial Court rejected the limitation objection, leading to the present writ petition.

Competent court granted interim injunction under Section 9; High Court appointed arbitrator under Section 11; Arbitral Tribunal passed award on 15.02.2024; HPCL filed Section 34 petition; Commercial Court rejected petitioner's IA No.1 on 08.01.2025.

Whether the communication dated 15.02.2024 from the Arbitration and Conciliation Centre constituted receipt of the arbitral award for the purpose of commencement of limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996. Whether HPCL's Section 34 application filed on 18.07.2024 was barred by limitation due to the delay in collecting the signed award copy. Whether the proviso to Section 34(3) permits extension of the thirty-day period only upon an application showing sufficient cause.

Petitioner argued that the Centre's communications dated 15.02.2024 and 16.02.2024 clearly informed parties that the award had been passed and called for payment; limitation began from that date, and HPCL's delay in paying until 28.03.2024 and collecting on 22.04.2024 could not extend limitation. Petitioner contended that HPCL failed to make immediate payment despite intimation and therefore its Section 34 petition was barred by limitation; no application was filed seeking extension under the proviso to Section 34(3). HPCL contended that the signed copy of the arbitral award was received only on 22.04.2024 and its petition presented on 18.07.2024 was within the period of limitation prescribed under Section 34(3) of the A&C Act. Petitioner relied on the Supreme Court decision in Benarsi Krishna Committee & Others v. Karmyogi Shelters Pvt. Ltd., (2012) 9 SCC 496, and the Arbitration and Conciliation Centre Rules requiring collection of the signed copy personally or through an authorised representative.

The communication issued by the Arbitration and Conciliation Centre on 15.02.2024 categorically stated that the arbitral award had been pronounced on 15.02.2024 and called upon the parties to pay the dues payable to the Centre. An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. HPCL made the payment only on 28.03.2024. Thereafter, an authorisation letter was issued on 20.04.2024, pursuant to which its authorised signatory collected the signed copy of the award on 22.04.2024.

On 31.12.2017, HPCL conducted an inspection of the petitioner's retail outlet, issued a show-cause notice, and later terminated the dealership agreement. The petitioner filed a Section 9 petition under the Arbitration and Conciliation Act, 1996, and obtained an interim injunction. The petitioner invoked arbitration, and upon HPCL's failure to appoint an arbitrator, the High Court appointed one under Section 11. The arbitral proceedings were conducted under the Arbitration and Conciliation Centre, Bengaluru, and reserved for award on 14.01.2024. On 15.02.2024, the Centre communicated that the award had been passed and called for payment of dues and collection of signed copy; a further email was sent on 16.02.2024. The petitioner paid on 20.02.2024 and collected the signed copy on 05.03.2024. HPCL paid on 28.03.2024, issued an authorization letter on 20.04.2024, and collected the signed copy on 22.04.2024. HPCL presented a Section 34 petition on 18.07.2024. The Registry raised a limitation objection. The petitioner filed I.A. No. I on 08.11.2024 contending the petition was barred by limitation, but the Commercial Court rejected the application by order dated 08.01.2025. Aggrieved, the petitioner filed the present writ petition.

• Arbitration and Conciliation Act, 1996: Section 9, Section 11, Section 31(5), Section 34(3), Section 39
• Constitution of India: Article 226, Article 227
• Companies Act, 1956:
• Arbitration and Conciliation Centre Rules, 2012: Rule 28(6), Rule 32(5)