Sunday 14 August 2016

When limitation for setting aside arbitration will start running?

However, the question is
whether the period of limitation for making an application under
Section 34 of the 1996 Act, would start running from the date on
which the signed copy was received by Mr. Pradip Saha, Assistant
Engineer.
In State of Maharashtra Vs. ARK Builders reported in (2011)
4 SCC 616, cited by Mr. Sen, the issue was, whether the period of
limitation for making an application under Section 34 of the 1996
Act, for setting aside an arbitral award, was to be reckoned from the
date on which a copy of the award was received by the applicant by
any means or source, or whether it was to start running from thedate a signed copy of the award was delivered to the applicant by the
Arbitrator.
The Supreme Court held that the period of limitation prescribed
under Section 34(3) of the 1996 Act, could only commence from the
date on which the award was received by the applicant in the manner
prescribed by law and/or in other words, in the manner for service of
the award prescribed in Section 31(5) of the 1996 Act.
In ARK Builders (supra) the Arbitrators had not supplied a
copy of the award to the appellants. The award holder had, however,
forwarded a photocopy of the award to the appellant and claimed
payment in terms of the award. The Supreme Court held that
limitation would run from the time the award duly signed, was
received by the appellant, from the Arbitrator.
In ARK Builders (supra) the Supreme Court did not consider
the question of whether the copies served by the Arbitrators to the
parties concerned, would all have to actually and separately be
signed by the Arbitrators themselves. However, the Supreme Court
clearly held that limitation would start running from the date on
which a copy of the award was received by the applicant from the
Arbitral Tribunal.In Benarsi Krishna Committee & Ors. Vs. Karmyogi
Shelters Private Limited reported in (2012) 9 SCC 496 the
Supreme Court held that the expression ‘party’ as defined in Section
2(i)(h) of the 1996 Act clearly indicates a person who is a party to an
arbitration agreement. The said definition is not clarified in any way
so as to include the agent of the party to such agreement. Any
reference, therefore, made in Section 31(5) and Section 34(2) of the
1996 Act could only mean the party himself and not his or her agent
or advocate empowered to act on the basis of a vakalatnama. In the
aforesaid case, the award had been served on the advocate.
In this case, Sri Pradip Saha, Assistant Engineer was not a
party to the arbitration. The State of West Bengal, represented
through the Secretary, Irrigation and Waterways Department and the
Executive Engineer were parties. Copies of the award should have
been served on the Secretary, Irrigation and Waterways Department,
and the Executive Engineer.
The award not having been served on the Secretary, Irrigation
and Waterways Department, or the Executive Engineer, it cannot be
said that limitation had started running. The application under
Section 34(2) for setting aside of the arbitral award cannot be held to
have been barred by limitation.
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
FMA 4576 of 2015
The State of West Bengal and Anr.
Vs.
M/s Motilal Agarwala and Anr.
B E F O R E:
The Hon’ble Justice INDIRA BANERJEE
And
The Hon’ble Justice SAHIDULLAH MUNSHI

Judgment on : 01.03.2016.
Citation:AIR 2016 Calcutta 271

INDIRA BANERJEE, J.: This appeal is against a judgment and
Order dated 9th December, 2014 passed by the learned District
Judge, Uttar Dinajpur, dismissing the application being Misc. Case
No. 12 of 2014 filed by the appellants under Section 34 of the
Arbitration and Conciliation Act, 196, for setting aside an award
dated 12th November, 2013 passed by the learned Arbitrator, Shri
Kalyanmoy Ganguly, a retired Judge of this Court.The learned Arbitrator handed over the original award to the
respondent No. 1. On the same day a photocopy of the award was
handed over to Sri Pradip Saha, an Assistant Engineer, who
acknowledged receipt thereof.
The photocopy of the award that was handed over to Sri Pradip
Saha had the photocopied signature of the learned Arbitrator.
However, the learned Arbitrator had not signed the photocopy of the
award.
The said application under Section 34 of the 1996 Act has been
rejected on the ground that it had filed beyond a period of three months
and thirty days from the date of receipt of the award.
Section 34(3) provides as follows:-
“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.”In view of Section 34(3) of the 1996 Act, delay beyond three
months and thirty days, in filing an application under Section 34 of
the 1996 Act, for setting aside an award, cannot be condoned under
Section 5 of the Limitation Act, 1963.
Section 29(2) of the Limitation Act, 1963 provides as follows :-
“Where any special or local law prescribes for any
suit, appeal or application a period of limitation different
from the period prescribed by the Schedule, the
provisions of Section 3 shall apply as if such period
were the period prescribed by the Schedule and for the
purpose of determining any period of limitation
prescribed for any suit, appeal or application by any
special or local law, the provisions contained in Sections
4 to 24 (inclusive) shall apply only insofar as, and to the
extent to which, they are not expressly excluded by such
special or local law.”
The 1996 Act is a special law and Section 34 thereof provides for a
period of limitation different from that prescribed under the Limitation
Act, 1963 as observed by the Supreme Court in Union of India Vs.
Popular Construction Company reported in (2001) 8 SCC 470.
In Popular Construction Company (supra), the Supreme Court
reaffirmed that the mere stipulation of a period of limitation, howsoever
peremptory the language, might not, in itself be sufficient to displace theapplicability of Section 5 of the Limitation Act. The Supreme Court,
however, held that the crucial words “but not thereafter” used in the
proviso to sub-section (3) of Section 34 of the 1996 Act, would amount to
express exclusion of Section 5 of the Limitation Act, under Section 29(2) of
the said Act and would therefore bar the application of Section 5 of the
Limitation Act, 1963. To quote the Supreme Court “to hold that the Court
could entertain an application to set aside an award, beyond the extended
period of limitation under the proviso, should render the phrase “but not
thereafter” wholly otiose. No principle of interpretation would justify such
result.”
The proposition that the proviso to Section 34(3) bars the
application of Section 5 of the Limitation Act, 1963, beyond the
extended period of limitation also finds support from the judgment of
the Supreme Court in Assam Urban Water Supply and Sewerage
Board Vs. Subhash Projects and Marketing Limited reported in
(2012) 2 SCC 624.
However, as rightly argued by Mr. Samrat Sen, Senior
Advocate, appearing on behalf of the appellant, limitation under
Section 34(3) of the 1996 Act, would only start running from the date
of receipt by the appellant of a signed copy of the award, in the
manner prescribed by law.In Himachal Pradesh Vs. Himachal Techno Engineers
reported in (2010) 12 SCC 210 cited by Mr. Sen, the Supreme Court
held that when the award was delivered or deposited or left in the
office of a party on a non-working day, the date of such physical
delivery would not be the date of receipt of the award by that party.
Necessarily the date of receipt would have to be the next working
day. The judgment has no application to the facts of this case.
Mr. Sen argued that no copy of the award had been served on
the appellants. Limitation had, therefore, not started running since
the learned Arbitrator handed over a copy of the award to an
Assistant Engineer Pradip Saha, who was not authorized to represent
the appellants.
In any case, the copy of the award that had been received by
the said Pradip Saha, Assistant Engineer, from the learned Arbitrator
not being a signed copy of the award, limitation could not have
started running. The application ought not to have been rejected on
the ground that the same was barred by limitation.
 Referring to Section 31(1) of the 1996 Act, Mr. Sen argued,
and rightly, that an arbitral award was required to be made in
writing and signed by the members of the Arbitral Tribunal. In
arbitral proceedings before an Arbitral Tribunal with more than oneArbitrator, the signatures of the majority of the members of the
Arbitral Tribunal would be sufficient, as long as the reason for any
omitted signature was stated, as provided in Section 31(2) of the
1996 Act. Sub-section 5 of Section 31 provides that after an arbitral
award is made, a signed copy thereof shall be delivered to each party.
As held by the Supreme Court in Union of India Vs. Tecco
Trichy Engineers & Contractors reported in (2005) 4 SCC 239,
cited by Mr. Sen, “the delivery of an arbitral award under sub-section
(5) of Section 31 is not a matter of mere formality. It is a matter of
substance. It is only after the stage under Section 31 has passed that
the stage of termination of arbitral proceedings within the meaning of
Section 32 of the Act arises. The delivery of arbitral award to the
party, to be effective, has to be ‘received’ by the party. This delivery
by the Arbitral Tribunal and receipt by the party of the award sets in
motion several periods of limitation such as an application for
correction and interpretation of an award within 30 days under
Section 33(1), an application for making an additional award under
Section 33(4) and an application for setting aside an award under
Section 34(3) and so on. As this delivery of the copy of award has the
effect of conferring certain rights on the party as also bringing to an
end the right to exercise those rights on expiry of the prescribed period
of limitation which would be calculated from that date, the delivery ofthe copy of award by the Tribunal and the receipt thereof by each
party constitutes an important stage in the arbitral proceedings."
There can be no doubt that the arbitral award would
necessarily have to be signed by the Arbitrator. Where the Arbitral
Tribunal consists of more than one Arbitrator the Arbitral Award
would have to be signed by all the Arbitrators or atleast by the
majority of the members of the Arbitral Tribunal. However, in our
view, it was not the intention of legislature that all the copies of the
award, dispatched to the respective parties would have to be
separately signed by the Learned Arbitrator. An authentic photocopy
of the original award along with the signatures of the members of the
Arbitral Tribunal would suffice.
Had it been the legislative intent that all copies of the award
required to be furnished to the respective parties to a multi party
arbitration, should actually be signed by Learned Arbitrator himself
and/or in other words, each of the copies should contain the original
signature of the learned Arbitrator, Parliament would, perhaps, not
have used the expression ‘signed copy of the award’ but used the
expression ‘a copy of the award, which is signed by the Arbitrators’,
in Section 31(5) of the 1996 Act.In Hindustan Construction Company Ltd. Vs. Union of India
reported in AIR 1967 SC 526, the Supreme Court considered what
was a signed copy of the award, in the context of Section 14(2) of the
Arbitration Act, 1940, which required the Arbitrators to cause the
award or a signed copy of it, together with depositions and
documents which might have been taken or proved before them, to be
filed in Court, so that judgment could be pronounced thereon.
In Hindustan Construction Company Ltd. Vs. Union of India
(supra), it was not in dispute before the Supreme Court that the
original award had not been filed in Court. The dispute was, whether
the document filed was a signed copy of the award, as the respondent
contended that what had been filed, was a certified copy of the award
and not a signed copy thereof, and therefore could not be acted upon.
In the context of the disputes before the Supreme Court, the
Supreme Court held :
“……..Obviously, therefore a copy means a document
prepared from the original which is an accurate or true
copy of the original. In Webster’s New Dictionary, the word
“copy” means “a thing made just like another; full
reproduction or transcription”. What the word “copy” in
Section 14(2) therefore requires is that it must be a full
reproduction of the original and that it should be accurate
or true. When a document is an accurate or true and full
reproduction of the original it would be a copy. In the
present case it is not in dispute that what was produced
by Sri Dildar Hussain was a true or accurate and fullreproduction of the original. It was therefore a copy of the
original, and the only question that remains is whether it
was signed, for if it was signed, it would be a signed copy.
7. This brings us to the meaning of the word “sign” as
used in the expression “signed copy”. In Webster’s New
World Dictionary, the word ‘sign” means “to write one’s
name on, as in acknowledging authorship, authorising
action etc.” To write one’s name is signature. Section 3(56)
of the General Clauses Act, 10 of 1897, has not defined
the word “sign” but has extended its meaning with
reference to a person who is unable to write his name to
include “mark” with its grammatical variations and
cognate expressions. This provision indicates that signing
means writing one’s name on some document or paper. In
Mohesh Lal v. Busunt Kumaree, a question arose as to
what “signature” meant in connection with Section 20 of
the Limitation Act, 9 of 1871. It was observed that ‘where
a party to a contract signs his name in any part of it in
such a way as to acknowledge that he is the party
contracting, that is a sufficient signature”. It was further
observed that the document must be signed in such a way
as to make it appear that the person signing it is the
author of it, and if that appears it does not matter what
the form of the instrument is, or in what part of it the
signature occurs.
8. We accept these observations and are of the opinion
that so long as there is the signature of the arbitrator or
umpire on the copy of the award filed in court and it
shows that the person signing authenticated the accuracy
or correctness of the copy of the document would be asinged copy of the award. It would in such circumstances
be immaterial whether the arbitrator or umpire put down
the words “certified to be true copy” before signing the
copy of the award. If anything, the addition of these words
(namely, certified to be true copy) would be the clearest
indication of the authentication of the copy as a true copy
of the award, which is what Section 14(2) requires, so long
as the authentication is under the signature of the
arbitrator or the umpire himself.”
A judgment is an authority for the proposition of law that is
raised and decided. The judgment in Hindustan Construction
Company Ltd. (supra), rendered in the context of Section 14(2) of
Arbitration Act, 1940, is not an authority for the proposition that a
certified photo copy of the original award signed by the sole
Arbitrator and/or Arbitrators, photocopied along with the signature
of the Arbitrator would not be a ‘signed copy’ as contemplated in
Section 31(5) of the 1996 Act.
In any case, this Court cannot be oblivious of the technical
developments that have taken place over the last three or four
decades. When Section 14(2) of the Arbitration Act, 1940 was
enacted, or even when the judgment in Hindustan Construction
Company Ltd. Vs. Union of India (supra) was pronounced,
photocopies, faxed copies, computer print outs with digital
signatures, computerized scanned copies, e-mails etc. were not in
contemplation. Copies of documents were generally handwrittencopies, cyclostyled copies, typed copies or may be carbon copies,
which needed to be authenticated by affixation of signature.
In recent years, there has been a rise in the popularity of
institutionalized arbitration. There are many established, recognized
institutions which conduct arbitrations. We see no reason why
photocopies of the award with photocopied signatures, or digitally
signed awards, duly certified by an authorized office bearer of the
institution conducting the arbitration, should not satisfy the
requirement of Section 31(5) of the 1996 Act.
Moreover there is a vast difference between Section 31(5) of the
1996 Act and Section 14(2) of the Arbitration Act, 1940, under which
the original award signed by the Arbitrators or a copy of the award
along with signatures of the Arbitrators would have to be filed in
Court as observed above so that judgment could be pronounced
thereon. There was no requirement in law for the Arbitrators to serve
copies of the award to the respective parties. On the other hand,
under Section 31(5) of the 1996 Act, copies of the award might have
to be served to numerous parties in a multi party arbitration, and it
may not be feasible for the Arbitrators to physically sign all the
copies of the awards.In our view, limitation under Section 34(3) would start running
from the date on which the party applying for setting aside of the
arbitral award received a signed copy of the award from the Arbitral
Tribunal. Such copy need not necessarily be signed in original by the
Arbitrator/ majority of the Arbitrators. An authentic photo copy
along with signatures would suffice. This issue is covered by a
judgment dated 28th August, 2015 of this Bench in APOT 337 of
2015 (National Agricultural Cooperative Marketing Federation of
India Ltd. Vs. M/s R. Piyarelall Import & Export Ltd.).
The award made over by the learned Arbitrator to Sri Pradip
Saha, Assistant Engineer was a signed copy. However, the question is
whether the period of limitation for making an application under
Section 34 of the 1996 Act, would start running from the date on
which the signed copy was received by Mr. Pradip Saha, Assistant
Engineer.
In State of Maharashtra Vs. ARK Builders reported in (2011)
4 SCC 616, cited by Mr. Sen, the issue was, whether the period of
limitation for making an application under Section 34 of the 1996
Act, for setting aside an arbitral award, was to be reckoned from the
date on which a copy of the award was received by the applicant by
any means or source, or whether it was to start running from thedate a signed copy of the award was delivered to the applicant by the
Arbitrator.
The Supreme Court held that the period of limitation prescribed
under Section 34(3) of the 1996 Act, could only commence from the
date on which the award was received by the applicant in the manner
prescribed by law and/or in other words, in the manner for service of
the award prescribed in Section 31(5) of the 1996 Act.
In ARK Builders (supra) the Arbitrators had not supplied a
copy of the award to the appellants. The award holder had, however,
forwarded a photocopy of the award to the appellant and claimed
payment in terms of the award. The Supreme Court held that
limitation would run from the time the award duly signed, was
received by the appellant, from the Arbitrator.
In ARK Builders (supra) the Supreme Court did not consider
the question of whether the copies served by the Arbitrators to the
parties concerned, would all have to actually and separately be
signed by the Arbitrators themselves. However, the Supreme Court
clearly held that limitation would start running from the date on
which a copy of the award was received by the applicant from the
Arbitral Tribunal.In Benarsi Krishna Committee & Ors. Vs. Karmyogi
Shelters Private Limited reported in (2012) 9 SCC 496 the
Supreme Court held that the expression ‘party’ as defined in Section
2(i)(h) of the 1996 Act clearly indicates a person who is a party to an
arbitration agreement. The said definition is not clarified in any way
so as to include the agent of the party to such agreement. Any
reference, therefore, made in Section 31(5) and Section 34(2) of the
1996 Act could only mean the party himself and not his or her agent
or advocate empowered to act on the basis of a vakalatnama. In the
aforesaid case, the award had been served on the advocate.
In this case, Sri Pradip Saha, Assistant Engineer was not a
party to the arbitration. The State of West Bengal, represented
through the Secretary, Irrigation and Waterways Department and the
Executive Engineer were parties. Copies of the award should have
been served on the Secretary, Irrigation and Waterways Department,
and the Executive Engineer.
The award not having been served on the Secretary, Irrigation
and Waterways Department, or the Executive Engineer, it cannot be
said that limitation had started running. The application under
Section 34(2) for setting aside of the arbitral award cannot be held to
have been barred by limitation.The appeal is therefore, allowed.
The order under appeal is set aside. The learned Court is
directed to hear and dispose of the application under Section 34 of
the 1996 Act on merits, at the earliest preferably within 6 months
from the date of communication of this order.
Urgent Photostat certified copy, if applied for, be delivered to
the learned counsel for the parties, upon compliance of all usual
formalities.
( INDIRA BANERJEE, J. )
 I Agree
 ( SAHIDULLAH MUNSHI, J. )
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