29A.Time limit for arbitral award.—(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. Explanation.—For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment.
(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period: Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral
tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.
(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.
(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.
(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.
ON THE ASPECT OF SETTING ASIDE PETITION, the Act lays down certain dynamic norms which can pull down an Award is not in illegal in itself. It is quite usually often that an Award may suffer from any kind of infirmity and it is being challenged in Court by an aggrieved party to it. The scope of Act lays down certain grounds on the basis of which an Award can be challenged in the Court by filing a petition for setting aside of the Award in dispute. The law provides sufficient mechanism for challenging the Award in a Court. The grounds on the basis of which an Award can be challenged in the Court could be enlisted as follows: –
– Party to the Arbitration is under some incapacity.
– Arbitration Agreement is not valid under prevailing law of the land.
– Invalid notice of appointment of Arbitrator is issued.
– Award deals with the dispute not contemplated or not falling within the terms of submission to arbitration or it contains decisions of matters beyond the scope of dispute not capable of settlement by arbitration.
– Court opines where the subject matter of dispute is not capable of settlement by arbitration.
– Court opines that Award is in conflict with the Public Policy.
The Act also lays down specific ground in addition to the aforesaid grounds to set aside an International Award. The additional ground for setting aside an international Award is where a Court finds that the Award is prima facie affected by a patent illegality.
The Act also lays down a time line within which an Award could be challenged in the Court. Under its specific provision of Section 34(3) of the Act, it lays down a time limit within which an Award can be challenged for setting it aside by the Court. The time limit of 3 months has been defined as proscribed time for challenging the Award with 30 days of further extension, beyond which a Petition for setting aside of the Award cannot be filed in the Court. In the famous Judgment of P. Radha Bai Vs. P. Ashok Kumar: Civil Appeals Nos.7710-7713 of 2013, the Hon’ble Supreme Court through Hon’ble Justices N.V. Ramana and S. Abdul Nazeer vide its Judgment dated 26 th Sept 2018, held that the time limit prescribed under the Act is specific and cannot be extended by provisions of any other law. In this case, the Hon’ble Supreme Court denied the Petition under Section 34 of the Act as it was delayed and time barred. The Court accordingly, held that the time granted under Section 34 and the extended time period of 30 days had expired and no plausible and viable explanation was given by the Petitioner. Accordingly, the Petition under Section 34 of the Act was dismissed being time barred and Appeal to the Hon’ble Supreme Court against allowing of the Petition under Section 34 of the Act was also dismissed.
In a catena of judgments, the Court has held that the provisions of the Act are having an overriding effect on the provisions of other legislations including general legislation for time i.e. the Limitation Act, 1963 being a Special Act.
An Appeal against the Order for dismissal of a petition for setting aside of the Award goes through the normal procedure prescribed under the Code of Civil Procedure, 1908 read with the provisions of the Commercial Courts Act, 2015 (if applicable) and the provisions of the High Court where such a Petition is filed.
ON THE ASPECT OF APPEAL, the provision of Section 37 of the Act elucidates specific Court Orders which are appealable in the Court. Such specific Court Orders could be enlisted as follows: –
– Refusal to refer parties to the arbitration under Section 8 of the Act.
– Refusal to grant any measure prescribed under Section 9 of the Act being related to seeking interim relief from Court during pendency of the Arbitral proceedings.
– Setting aside or refusal to set aside an arbitral Award under Section 34 of the Act.
The Act further specifies Orders of the Arbitral Tribunal against which an Appeal can be filed. Such Orders of the Tribunal could be accepting the plea referred to in Sub-section (2) or Sub-section (3) of Section 16 of the Act i.e. pertaining to jurisdiction issue and interim measures ordered by the Arbitral Tribunal. An Appeal would also lie from an Order of Tribunal pertaining to an Order of refusal to grant an interim measure under Section 17 of
the Act.
ON OTHER PREFACES, there are other various miscellaneous provisions which are mandatorily to be considered in respect of an Arbitral Award. The laws in India also specifically enshrines that an Arbitral Award passed in India could be executed within a time span of 12 years from the date of its adjudicated by the Tribunal as per the Limitation Act, 1963. Whereas, a foreign Award is executable within 3 years.
An Arbitral Award is enforced in the same manner as a decree of the Civil Court. While considering enforcement of the Arbitral Award involving money, the Court shall consider it as a case of wherein money decree has been passed in a money suit by a Civil Court as in a Civil Suit under the provisions of the Code of Civil Procedure, 1908.
The relevant provisions pertaining to the for enforcement of an Arbitral Award is Section 36 of the Act, which could be elucidated in verbatim as follows: –
Section 36- Enforcement-(1) Where the time for making an application to set aside the arbitral award under section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the Court under section 34, the filing of such an application shall not by itself render that award unenforceable, unless the Court grants an order of stay of the operation of the said arbitral award in accordance with the provisions of sub-section (3), on a separate application made for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the arbitral award, the Court may, subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing:
Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of 1908).]
Also, an Award is to be properly stamped for its execution or even in respect of challenging it in a Court of higher jurisdiction. An Award stamped insufficiently attracts negative impacts such as non-enforceability while its execution or non-objectionability while being challenged. Whereas, a Foreign Award does not attract such an imperative compliance.
On a pertinent issue, it is quite imperative to know that post Arbitration & Conciliation (Amendment) Act, 2015, there is no automatic stay applicable to the proceedings under Section 34 of the Act or Section 37 of the Act which earlier was incubated to the Appellate or Setting aside of Award proceedings.
It is further imperative to know that the Award is restricted to the grounds on which it is passed. Any issue which is not mentioned in the Award is neither appealable nor could be invoked as a ground in an Award Setting Aside Petition under Section 34 of the Act.
