Arbitration Act, 1996 – Section 34(3) – Delay in filing Section 34 petition – Service of Arbitral Award on the “party” is essential – “Party” does not include “agent or advocate” of the parties.

By the judgment dated 12.9.2019 the learned Single Judge of the Delhi High Court dismissed section 34 petition of the appellants on account of delay.

Section 34 petition was filed to set-aside the Award published on 20.11.2018 for Rs.22,05,09,651/-. with interests in favour of the Respondent.  It was corrected on 7.1.2019 and the amount was reduced to Rs.15,11,66,498/-.

This was challenged by the appellants.  An application for condonation of delay was also filed on the ground that the appellants came to know of the award only on receipt of the letter dated 14.3.2019 from the representative of RML to which the Arbitrator had sent the Award.

The learned Single Judge held that three months period from 7.1.2019 expired on 7.4.2019 and thereafter, 30 days expired on 7.5.2019.  Section 34 petition was filed on 10.5.2019.  It was barred by delay of three months and thirty days.

HELD that Section 31(5) mandates that a singed copy of the Arbitral Award shall be delivered to each party defined in Section 2(1)(h) as party to the arbitration agreement. It is the party which is competent to take decision on challenging the Award. “Party” does not include agent or advocate of such party.   Section 34(3) provides that an application for setting aside an award may not be made after three months from the date on which the party had “received” the award.   The limitation, therefore, would start only when a copy of the arbitral award is “served” on “party” to the arbitration agreement and not on representatives or Counsel of the parties.  Thus, the appeal was allowed.

Judgment dated 20.12.2023 in FAO (OS_) (COMM) 326/2019 and CM No.49717/2019 – Ministry of Health & Family Welfare and another  Vs. M/s. Hosmac Projects Division of Hosmac Indiva Private Ltd.