A petition filed under Section 34 of Arbitration Act cannot be barred by time if a copy of award has not been delivered to the Petitioner

The Hon’ble High Court of Delhi held that the compliance of Section 31 (5) of the Arbitration and Conciliation Act, 1996, (“the Act”) is a necessity for the clock of limitation to start ticking for filing a petition under Section 34 of the Act for setting aside of an arbitral award. Section 34(3) states that an application for setting aside of an arbitral award cannot be made after an elapse of 3 months from the date of receiving such an award and delay can only be condoned up to 30 days; whereas, Section 31 (5) states that after an arbitral award is made, a signed copy has to be supplied to each party. It was held that Section 34 when read in conjunction with Section 31 shows that it is the receipt of a signed copy of award, which is the trigger point for commencement of limitation.

This was held by the Hon’ble High Court at Delhi in the matter Federal Brands Ltd. (previously Microtex India Ltd.) v. Zinka Logistics Solutions Pvt. Ltd & Anr., OMP (COMM) No. 490/2016 & IA No. 14225/2016 on 28^th May, 2018.

Challenge

In a petition under Section 34 of the Act, Arbitral Award dated 20.05.2016 was impugned wherein the Respondent No. 1 had contended that the petition was barred by limitation. The dispute between the parties was with respect to the domain name BLACKBUCK.IN wherein an ex-parte arbitral award was passed against the Petitioner. The said award was passed on 20.05.2016 and Respondent No. 1 argued that the petition was barred by time since the Petitioner became aware of the award on 26.05.2016, when the details of same were communicated via email to the Petitioner by Respondent No. 2, National Internet Exchange of India (NIXI), and again on 09.06.2016, when he was informed about the said award through his service provider. i.e. Respondent No. 2.

Ratio: It was observed that the question of limitation can be determined if a copy of arbitral award was served on the Petitioner, as mandated under Section 31. It was admitted that no signed copy of said award was ever sent to the Petitioner by the Arbitrator. The Respondent No. 2, in its email dated 26.05.2016, had only informed the Petitioner that an award dated 20.05.2016 had been passed and uploaded on the NIXI website. However, the link provided in this email led to the home-page of NIXI’s website where the said award was available at page 79. Further, in the email sent by the Registrar of Respondent No. 2 dated 09.06.2016, he had only informed the Petitioner that server locks had been put on the website of the Petitioner. Since the copy of the said award had not even been sent to the Petitioner, the Hon’ble High Court observed that the award was not delivered to the Petitioner. Therefore, the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 was not barred by limitation.