Summary
Delivery of a signed copy of an arbitral award to an Assistant Engineer who attended the arbitration on behalf of the State, but who was not a party to the arbitration agreement and had no authority to decide whether to challenge the award, is not delivery to the 'party' under Section 31(5) of the Arbitration and Conciliation Act, 1996. Limitation under Section 34(3) therefore did not begin to run from that date, and the State's application to set aside the award was not time-barred.
Issues
- Whether delivery of a true or xerox copy of the arbitral award, duly signed by the arbitrator, to an authorised representative of the State on the date of the award constitutes delivery to the party under Section 31(5) of the Arbitration and Conciliation Act, 1996, so as to start limitation under Section 34(3).
Provisions considered
- Section 34(3) with proviso, Arbitration and Conciliation Act, 1996An application to set aside an award may not be made after three months from the date the party making it received the award (or from disposal of a request under Section 33), extendable by a further 30 days on sufficient cause. Limitation commences only when the party, as defined, has received the award. (¶¶ 13, 14, 19, 20)
- Section 31(5), Arbitration and Conciliation Act, 1996After the award is made a signed copy must be delivered to each party. Delivery is a matter of substance, not formality: it sets in motion the limitation periods under Sections 33(1), 33(4) and 34(3). Delivery to an Assistant Engineer who was not a party and could not decide on a challenge was not valid service. (¶¶ 15, 17, 22, 24)
- Section 2(1)(h), Arbitration and Conciliation Act, 1996'Party' means a party to the arbitration agreement. Following Tecco Trichy and Benarsi Krishna Committee, in the context of a Government department the copy must reach the person with knowledge of the proceedings who is competent to decide whether to challenge the award (here the Secretary of the Department or the Executive Engineer), not an agent or representative. (¶¶ 18, 20, 21, 23, 24, 25)
- Section 33, Arbitration and Conciliation Act, 1996Noted as one of the time-bound remedies (correction, interpretation and additional award) that are triggered by delivery of the award, illustrating why delivery under Section 31(5) is substantive. (¶¶ 13, 22)
Held
- Limitation under Section 34(3) runs from the date on which the 'party', as defined in Section 2(1)(h), receives the arbitral award delivered under Section 31(5). An authorised representative who participated in the arbitration and collected a signed xerox copy of the award does not fall within the expression 'party'. (¶¶ 19, 20)
- Applying Tecco Trichy Engineers, where the party is a Government department, effective service requires delivery to the person who has knowledge of the proceedings, is best placed to understand the award and, in particular, is competent to decide whether to challenge it. The State's authorised representative could not take that decision; only the Secretary of the Department or the Executive Engineer could. (¶¶ 21, 23)
- Delivery under Section 31(5) is a matter of substance because it triggers the limitation periods for applications under Sections 33(1), 33(4) and 34(3); the delivery of the copy by the tribunal and its receipt by each party is an important stage of the arbitral proceedings. (¶ 22)
- On the undisputed facts, the contract was executed by the Superintending Engineer and the Executive Engineer was a party to the arbitration, but the signed copy was handed to an Assistant Engineer present at the meeting. Delivery to him, who was neither a party nor in a decision-making capacity, was not valid service, so the State's Section 34 application filed on 20 March 2014 was not barred by limitation. (¶¶ 24, 25, 26)
Result
Appeal dismissed; High Court's order holding the State's Section 34 application within limitation affirmed; District Court requested to decide the State's Section 34 application on merits within six months of receipt of the order.