Fixing timelines is one of the oldest instruments for the speedy adjudication of disputes and giving finality to the litigation between the parties.
One such instance is section 33(1) of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) which provides a party to request correction or interpretation of the award within a period of thirty days from the receipt of the arbitral award unless the parties have agreed otherwise.
In the instant blog, the author attempts to answer the unsettled question of whether, in absence of any agreement to the contrary, the above-said period of thirty days under section 33(1) is mandatory or directory and condonable.
As a general rule of the statutory interpretation, a provision is to be first literally construed. Going by the same, section 33(1) does not provide scope for condonation, particularly when the Arbitration Act is a special statute and prescribes a specific time period.
However, ventilation of it being directory can be found by reading section 33(1) with section 43 of the Act which makes the Limitation Act, 1963 “apply to arbitrations as it applies to proceedings in Court” i.e., open-armed embracement, however, subject to the specific conditions mentioned in section 5 and section 29(2) of the Limitation Act.
Moreover, though the Hon’ble Supreme Court in the Government of Maharashtra (Water Resources Department) v. M/s Borse Brothers Engineers & Contractors Pvt. Ltd., 2021 SCC OnLine SC 233 dealt with section 37 of the Arbitration Act which does not prescribe any limitation period for the appeals, the Hon’ble Court held that “there can be no doubt whatsoever that section 5 of the Limitation Act will apply to the aforesaid appeals, both by virtue of section 43 of the Arbitration Act and by virtue of section 29(2) of the Limitation Act” (para. 23).
However, the above-discussed liberal reading of section 33(1) is limited by its implication on section 34(3) of the Arbitration Act which prescribes that an application for setting aside an arbitral award may not be made after three months from the date of receiving an arbitral award or from the disposal of the request under section 33(1) where such a request has been made. After the expiry of three months, the proviso further provides a final window of thirty days for entertaining the application provided a sufficient cause for the delay is shown.
Thus, if section 33(1) is read as directory or condonable the same may be used to bypass the limitation imposed in section 34(3). The delayed request under section 33(1) cannot be made an instrument to frustrate the limitation period prescribed under section 34(3) and open a settled dispute. To this effect, in Union of India and Another vs. Saboo Minerals Pvt. Ltd. 2003 (71) DRJ 166 (para. 4) the Hon’ble Delhi High Court ruled thus:
“To exclude the time taken in pursuing the application under Section 33 of the Act, the application filed under Section 33 has to be within the period prescribed in the Act. In a case where an application under Section 33 of the Act has been filed say after a period of six months from the date of receipt of the award by the party, it cannot be said that the time for filing objections under Section 34 of the Act would start from the date of rejection of such an application. If this contention is accepted, any party with a view to circumvent the limitation provided in Section 34 of the Act would make an application before the Arbitrator under Section 33 of the Act and wait for his decision and file objections after disposal of such an application, which was not even maintainable because of the same having been filed beyond the time prescribed in Section 33 of the Act.”
The said decision was reaffirmed by the High Court of Chhattisgarh in the Union of India vs. M/s. Todarmull Infrastructures Pvt. Ltd., Arbitration Appeal No. 50 of 2019 (19.11.2019) and it was held that a delayed request under section 33 and its disposal would not give another life to the time-barred application under section 34.
Aggrieved by the same, the Union of India preferred SLP No. 2558 of 2021 titled Union of India vs. M/s Todarmull Infrastructures Pvt. Ltd. (Engineers and Contractors). Vide the Order dated 21.07.2022, the Supreme Court dismissed the special leave petition but also noted that “the question of law is kept open, which may be considered in some other appropriate case”. i.e., whether the period of thirty days in section 33(1) is mandatory, and if yes for how much period.
PERSONAL OPINION: The concerns relating to the delay and possible misuse of section 33 were raised in the 329th meeting (pg. 4-5) of the United Nations Commission on International Trade Law devoted to the preparation of the UNCITRAL Model Law on International Commercial Arbitration. However, these concerns pertained to the making of section 33(1)(b) i.e., seeking interpretation of award, subject to the agreement between both the parties. However, no discussion ever happened about the nature of the prescribed time period.
In the personal opinion of the author, the period under section 33(1) should be read as condonable unless the same has been filed after the period prescribed under section 34(3) of the Act. An application beyond the period prescribed in section 34(3) shall not be entertained.
However, in a case where a party has filed a delayed application under section 33(1) but within the period prescribed in section 34(3), the triggering date for the application for setting aside shall relate back to the date of the arbitral award. In such a case, the time already consumed in section 34 can be pleaded as excluded by virtue of section 14 of the Limitation Act. The change, if any in the application under section 34 consequent to disposal of an application under section 33, can be made post disposal of the request under section 33 (see Order VI Rule 17, Code of Civil Procedure, 1908).
Such a view is seconded by the fact that even section 33(1) gives the autonomy to the parties to agree otherwise and extend the said time. Further, by virtue of the decision of the Supreme Court in The Project Director, NHAI v. M. Hakeem, 2021 SCC OnLine SC 473 the Court cannot modify or alter an award under section 34 and thus, such error would continue to exist until the parties approach Supreme Court and the Hon’ble Court exercises its power under Article 142 of the Constitution of India, 1950. Thus, it is in the interest of the parties to condone the delay and allow the correction, if any by the arbitral tribunal in the above-suggested time frame.
Most importantly, the suggested harmonious interpretation would safeguard the concern against any party misusing the condonation of delay in section 33(1) as an instrument of delay and re-open a settled dispute and thereby would keep the intent of the legislature behind section 34(3) intact.