The Jharkhand High Court dismissed an application filed under Section 34 of the Arbitration and Conciliation Act, 1996 and held that the provisions of Section 14 of the Limitation Act shall apply to an application under Section 34 and the period consumed in prosecuting the challenge to an arbitral award would be excluded while counting the “prescribed period” of 3 months as provided under Section 34 (3) provided the proceedings in the wrong forum was a bona fide mistake.
Brief Facts:
The appellant challenged an order passed by the Civil Judge which rejected the challenge laid upon the arbitral award as the application due to a delay of 10 years in the filing of an application under Section 34 of the Arbitration and Conciliation Act, 1996
Contentions of the Applicant:
The learned counsel appearing on behalf of the appellant contended that the partnership agreement signed between the parties was not a legal document as it was executed on a non-judicial stamp paper and the appellant never participated in the arbitral proceedings and had objected to the continuance of the proceedings before the sole arbitrator.
Observations of the Court:
The court referred to the judgement in Union of India v. Popular Construction Co. which held that an application for setting aside an award filed beyond the period mentioned in section 34 (3) of the Arbitration and Conciliation Act would not be an application "in accordance with sub-section (3) as required under section 34 (1) of the Arbitration and Conciliation Act and section 5 of the Limitation Act has no application to such application".
The court further stated that provisions of Section 14 of the Limitation Act shall apply to an application under Section 34 and the period consumed in prosecuting the challenge to an arbitral award would be excluded while counting the “prescribed period” of 3 months as provided under Section 34 (3) of the Arbitration and Conciliation Act provided the proceedings in the wrong forum was a bona fide mistake. It was further stated that Section 14 of the Limitation Act does not provide for a fresh period of limitation and the application of Section 14 merely excludes certain periods spent in the wrong forum and the writ proceedings are necessarily civil proceedings where the legality of an arbitral award is questioned and thus the time consumed in prosecuting it will be excluded.
The court further observed that the application filed under Section 34 by the appellant in the present case was barred by limitation and the grounds urged on his behalf cannot be looked into when the application itself was barred by limitation.
The decision of the Court:
The court dismissed the petition and upheld the impugned order.
Case Title: Ashok Kumar Sharma vs. Rajneesh Kumar Sinha
Coram: Hon’ble Mr. Justice Chandrashekhar and Hon’ble Mr. Justice Ratnaker Bhengra
Case No.: Commercial Appeal No. 02 of 2023
Advocate for the Applicant: Mr. Amit Kumar Verma
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