Section 34(3) of The Arbirtration Act I

Appeal arises from the Judgment of a Learned Single Judge of the High Court of Calcutta by which the Respondent’s Application for condoning a delay of 514 days in filing an Application under Section 34 of The Arbitration and Conciliation Act, 1996 was allowed.

This Court needs to assess whether the benefit of Sections 5 and 14 of The Limitation Act can be extended to the Respondent, and if so, whether a delay beyond the specific statutory limitation prescribed under Section 34(3) of The A&C Act could be condoned.

Section 5 of The Limitation Act, 1963 has no application to an Application challenging an Arbitral Award under Section 34. This has been settled in Union of India v. Popular Construction Company, (2001) 8 SCC 470.

The question whether Section 14 of The Limitation Act would be applicable to an Application submitted under Section 34 has been answered in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, (2008) 7 SCC 169:

There is no provision in the said Act which excludes the applicability of Section 14 of The Limitation Act to an Application submitted under Section 34. Section 34 would be unduly oppressive, if it is held that the provisions of Section 14 of The Limitation Act are not applicable to it.

As far as the limitation for filing an Application for setting aside an Arbitral Award is concerned, the statutory period prescribed is 3 Months which is extendable by another period of upto 30 Days (and no more) subject to the satisfaction of the Court that sufficient reasons were provided for the delay. The intent of the Legislature is evinced by the use of the words “but not thereafter” in the proviso.

Even if the benefit of Section 14 of The Limitation Act is given to the Respondent, there will still be a delay of 131 days in filing the Application. That is beyond the strict timelines prescribed in Sub-Section (3) read along with the proviso to Section 34 of The A&C Act. The delay of 131 days cannot be condoned. To do so is breach of a clear statutory mandate. Administrative difficulties would not be a valid reason to condone a delay above and beyond the statutory prescribed period under Section 34. The Judgment rendered by the Learned Single Judge of the High Court of Calcutta is set aside.”

Hon’ble Justice Dr. D.Y. Chandrachud, M/s. Simplex Infrastructure Ltd. v. Union of India, [Civil Appeal No. 11866 of 2018].