Date Of Receipt Of Corrected Award Would Be Taken As Disposal Date U/S 34(3) Of Arbitration Act, Even When Application U/S 33 Has Been Filed: Delhi HC

Brief Facts:

The parties entered into a contract for supply, erection and commissioning of a Brewery Plant. The contract contains an Arbitration Clause. Disputes have arisen between the parties and an Arbitrator was appointed by the Court. Then, the Arbitrator passed the award on 17.10.2017. An application under Sections 33(1)(a), 33(1)(b) and 33(4) of the Arbitration and Conciliation Act, 1996 was filed by the respondent before the Arbitral Tribunal stating that Claim No.1 which was for the final claim in respect of goods not paid for invoice value of Rs.2,80,19,799/- had been omitted in the Award. The Arbitral Tribunal considered the application and passed an order allowing Claim No.1 and said that there was a typographical error in the order which was corrected. Then, the petitioner filed a petition under Section 34 of the Act challenging an award and an additional award passed by the Arbitrator.

The short question which arises for consideration is as to whether the petition filed under Section 34 of the Act on 13.11.2018 is within time as prescribed under Section 34(3) of the Arbitration Act or not. The petitioner contended that the order dated 18.05.2018 and the typographical error corrected by the Arbitrator vide corrigendum dated 23.05.2018 was received by the petitioner herein only on 21.08.2018. Therefore, this petition is within time.

However, the respondent argued that in the present case the terminus quo for calculating limitation would be the date on which the application under Section 33 of the Act filed by the respondent was disposed of and it cannot be the date on which the copy of the corrected award was received.

Observation of the court:

The court observed that there are two conflicting orders of the Apex Court passed in two Special Leave Petitions by exercising powers under Article 136 of the Constitution of India. It is well-settled that dismissal under Article 136 does not amount to affirmation of the orders of the High Court and that the Apex Court has only decided not to exercise his jurisdiction under Article 136 while granting Special Leave to Appeal but that is not the position in this case as both the orders are reasoned orders and therefore both the orders would be binding on this Court under Article 141 of the Constitution of India.

Then, the court held that the provisions of Section 34(3) of the Act give two timelines. One, where an application under Section 33 of the Act has not been filed in which case the legislature was conscious enough to state that it would be the date of receipt of the award. Whereas, in the case where an application under Section 33 of the Act has been filed, the legislation was conscious enough to lay down that the date of disposal would be the starting point for calculation of limitation.

Thereafter, the court held that taking the date of receipt of the corrected award as the starting point and not as the date of disposal would actually go contrary to the plain reading of Section 34(3) of the Act. This will apply even in cases where an application under Section 33 of the Act has been filed. So, the court held that the present challenge is belated, and the application filed by the petitioner under Section 34 is hit by limitation.

Case Title: TEFCIL BREWERIES LIMITED v. ALFA LAVAL (INDIA) LIMITED

Citation: 2025 LiveLaw (Del) 18

Case Number: O.M.P. (COMM) 479/2018

Counsel for the Petitoner: Mr. Sushil Bajaj, Mr. Bhavook Chauhan, Mr. Amit Sanduja, Ms. Sakshi Singh, Mr. Tushar Batra, Advocates

Counsel for the Respondent: Mr.Shankar Vaidialingam with Mr. Shivain Vaidialingam, Advocate

Date of Judgment: 08.01.2025

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