INTRODUCTION
Sub-section (3) of Section 34 of the Arbitration and Conciliation Act, 1996 (Act) provides that an application for setting aside an arbitral award must be made within three months from the date on which the party making that application had received the arbitral award. The sub-section provides that a delay of up to 30 days and not thereafter may be condoned provided an accompanying application for condonation of delay is made for such purpose. In terms of adjudication under Section 34 of the Act, an order refusing to condone delay in submission of an application under Section 34(3) of the Act may however result in shutting the door for the aggrieved party seeking the remedy of setting aside of award under Section 34 of the Act. A refusal to condone delay under Section 34(3) of the Act, it is submitted, has the effect of foreclosing any adjudication on the substantive merits of the application in accordance with sub-section (2) of Section 34 of the Act.
As a result, an order rejecting the application for condoning the delay in filing of the application under section 34 of the Act may 'in effect' be an order which refuses to set aside the arbitral award without considering the grounds provided under sub-section (3) of Section 34 of the Act. This anomaly was addressed by the
ORDER REFUSING CONDONATION AS A SUBSTANTIVE ORDER: EFFECT BASED INTERPRETATION OF SECTION 34(2) VIS-AVIS SECTION 34(3) OF THE ACT.
The proviso to sub-section (3) provides 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. The bar on entertaining application under Section 34(3) of the Act read with Section 5 of the Act cannot be interpreted with reference to the Section 5 of the Limitation Act, 1963.7
In Chintels, the court placed an order refusing to condone delay as one step above the preliminary question as illustrated in BGS SGV Soma8 of returning application for its submission before the court which had jurisdiction to decide the said application. Unlike preliminary issues, a refusal to condone the delay was held to have an element of finality vis-a-vis rights and liabilities of the parties to the proceedings. The court, referring to Essar Constructions v.
THE AMBIT OF "SETTING ASIDE OR REFUSAL TO SET ASIDE" IN SECTION 37(1)(C ) OF THE ACT
Sub-section (3) of Section 37 of the Arbitration Act provides for an appeal against an order setting aside or refusing to set aside an arbitral award under section 34 of the Act. The reference in Section 37(1)(c) of the Act to section 34 and not section 34(2) specifically of the Act was interpreted by the court in Chintels as covering an order under sub-section (3) of Section 34 of the Act. Furthermore, the court ruled that "effect doctrine" referred to in Essar Constructions was statutorily inbuilt in Section 37 of the Act inasmuch Section 37(1)(a) and Section 37(2)(a) of the Act provides a right to appeal against any order wherein determination is final as it brings the arbitral proceedings to an end. Section 34 of the Act interprets "recourse against arbitral award" to only mean an application for setting aside such award as per sub-section (2) and sub-section (3) of Section 34 of the Act. A successful application for setting aside an arbitral award under Section 34 of the Act must conform to the requirements of sub-section (2), (2A) as well as sub-section (3) of Section 34 of the Act. The court desisted from interpreting a reference to setting aside in Section 37 as a reference to subsection (2) of section 34 of the Act and enlarged the ambit of appealable order to include an order condoning or refusing to condone the delay in filing an application for setting aside the arbitral award.
CONCLUSION
More than anything, the ruling in Chintels streamlines the judicial approach on appealable order against an application for setting aside an arbitral award. The greater emphasis on 'effects' and 'results' as well as party's ability to seek redress may prove useful in resolving many interpretative anomalies present in or those that will arise in the future under the Act. However, there is need for greater clarity on how an order refusing condonation of delay under Section 34(3) and appeal thereof under Section 37 of the Act would address the question of limitation and enforcement of award.
Footnotes
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5 Harmanprit Singh Sindhu v.
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8 BGS SGS Soma JV v.
9 Essar Constructions v.
10 Chief Engineer of BPDP/REO Ranchi v.
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