Dismissed

Amit S. Lanavat v. Kotak Securities

Bombay HC27 Sept 2010ARBP/1018/2009

Case brief

AI extract

What is this about?

The High Court of Bombay dismissed an arbitration petition under Section 34 of the Arbitration and Conciliation Act, 1996, as time-barred. The court held that the rejection of a Section 33 application for correction did not reset the limitation period for setting aside the award.

What did the court decide?

The petition under Section 34 of the Arbitration Act was dismissed on the ground of limitation.

Amit S. Lanavat Vs Kotak Securities — Arbitration | Bombay HC (2010)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 1018 OF 2009

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Shri Amit Suryakant Lunavat 163, “E” Ward, Shadow, Gauthan, Lonavala- 410 401

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....Petitioner.

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Vs.

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M/s. Kotak Securities A Company incorporated under the Companies Act, 1956, having its Office Address at Nirlon House, 2^nd Nirlon House, 2^nd Floor, Annie Besant Road, Mumbai. ....Respondent.

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Mr. Rajesh Khandelwal for the Petitioner. Mr. V.K. Rambhadran for the Respondent.

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CORAM : ANOOP V. MOHTA, J.

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DATE : 27^th September, 2010

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ORAL JUDGMENT:-

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Heard finally, by consent.

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2 The Petitioner has moved this Petition under Section 34 of the

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Arbitration and Conciliation Act, 1996, (for short, the Act) thereby challenge is made to the award dated 16^th May, 2009 which according to the Petitioner received on 1^st June, 2009. Admittedly, the Petitioner has

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moved an Application under Section 33 of the Act, on 19^th June, 2009, and various grounds were raised referring to limitation and the merit also and prayed to reconsider all the points. The Respondent though served, not appeared before the Tribunal.

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3 By order dated 1^st July, 2009, the Arbitrator, observed that; there are no typographical or clerical errors or errors of similar nature in the award; the application, as filed, does not come within any of the criteria falling under Section 33; it amounts to review of the award; rejected the application on all grounds.

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4 The Petitioner moved/ lodged this petition under Section 34 of the Act, on 07/10/2009.

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5 The relevant Section 33 is reproduced as under:-

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“33 Correction and interpretation of award; additional award.-

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(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties-

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a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

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b) if so agreed by the parties, a party, with notice to

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the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

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(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

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(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award.

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(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

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(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.

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(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) of sub-section (5).

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(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section.”

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6 Section 34 sub-clause 3 is also reproduced as under:-

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“(1) ....

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(2) ....

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(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

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Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

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(4) .....”

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7 As per the scheme of the Act and these two sections, it is permissible

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for the parties to apply for correction and/or interpretation and/or for addition in the award within 30 days from the receipt of the award. The Petitioner did apply accordingly. As per clause (a) of 33(1) of the Act with notice to the other party, a party can request the arbitral tribunal to correct any computation errors or any clerical or any typographical errors or any other errors of a similar nature. So far as clause 33(1) (b) is concerned, the agreement/ consent of the other party is necessary. The consent can be obtained and/or Arbitrator can take note of the same on given facts and circumstances of the case, after notice to the other side, which is a must, even for the interpretation of a specific point or part of the award.

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8 The Tribunal after hearing both the parties or even otherwise, if there is any correction or any interpretation in the award, it should be made

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within 30 days from the receipt of the request. It shall form part of the Arbitral award. Therefore, it is mandatory for the parties to apply within 30 days, as well as, for the arbitrator to pass order within 30 days from the receipt of such request.

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9 As per Section 33 (4) of the Act, unless otherwise agreed by the parties and subject to notice to other party, a party may request within 30 days from the date of receipt of the Arbitral award, the Arbitral Tribunal to make an additional arbitral award, in a case where the Arbitrator, for whatever may be the reason, omitted to decide some portion or part of the claim so made by the parties. Therefore, the consent of the parties here again necessary for such additional arbitral award of the omitted claims only and not otherwise. One party cannot apply for additional award firstly, without due notice and secondly, without consent to reconsider and or/to consider the omitted claims, if any. The Tribunal, within 60 days from the receipt of the request may consider and pass the additional award.

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10 As per Section 33 (6), of the Act the Tribunal may extend, if necessary, the period of correction or give an interpretation or make any additional award under sub-section (2) of Sub section (5) of Section 33 of the Act.

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11 Section 33 (7) refers to Section 31 of the Act, insofar as the correction or interpretation of the arbitral award and/or additional award made in this section. Section 33 contemplates and form arbitral award. It also means that if there is a correction or interpretation and/or additional award, the Arbitrator will modify and/or pass award, considering the forms and contents as provided under Section 31 of the Act. Therefore, whenever there is a correction, modification or any addition of any claim or additional award, it means there will be a new and/or corrected arbitral award and the original award after such correction, clarification and/or additional award, looses its originality for the purpose of limitation as contemplated under Section 34(3) of the Act.

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12 As quoted above, Section 34(3) provides that an application for setting aside should be made within 3 months from the date on which the party making that application had received the award or if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal. In my view, considering the scheme of Sections 33 and 33(4), it is clear that merely because the application under Section 33 is filed within 30 days from the receipt of the award, and the order of the same received within 30 days or 60 days, as referred above, there is no question of starting new limitation period from the date of disposing of the arbitration application under Section 33 of the Act, in a

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case, where the Arbitrator rejects the application without making any modification/ correction and/or addition in arbitral award.

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13 There is no justification, as contended, to accept the submission in view of the mandate of Section 34 and considering the scheme and purpose of the Arbitration Act that because the application under Section 33 of the Act was filed and it was rejected subsequently, therefore, the limitation period commenced afresh from the date of such decision of the award. In my view, it is contemplated only on a situation where the Arbitrator corrects or interprets and/or add or decide to add any additional claims and modified the award as only in such cases the original award looses its originality and therefore an application for setting aside the award needs to be filed within three months from the date of receipt of such corrected or modified award. Therefore, the party who received the award after deciding the application under Section 34(3) of the Act, may get the benefit of fresh commencement of limitation from the receipt of the modified and/or corrected award and not otherwise.

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14 In the present case, even otherwise, the award is dated 16^th May, 2009, received on 1^st June, 2009, the Application under Section 33 was filed on 19^th June, 2009 which was decided on 1^st July, 2009 though received on 9^th July, 2009, the present Petition under Section 34 was filed

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on 7^th October, 2009. Therefore, in any way, it is beyond limitation of three months, as well as, 30 days thereafter, as contemplated under Section 34(3) of the Act.

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15 The learned counsel appearing for the Respondent has strongly relied on State of Arunachal Pradesh Vs. Damani Construction Co., (2007) 10 SCC 742 , and thereby contended that as the Arbitrator has no power to review, on merits and an application seeking clarification and substantive review of the award no way falls within the ambit of section 33 of the Act. The Apex Court while interpreting the provisions of Section 33, as well as Section 34 (3) observed that such application was totally misconceived and the Arbitrator’s decision did not give any fresh cause of action so as to file application under Section 34(3) of the Act taking it as a supporting point of limitation from the date of reply/ order given by the Arbitrator.

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16 I have already observed in Arbitration Petition No. 207 of 2009, Shri. Ashwin Neema Vs. Mangalam Clothes (Pvt.) Ltd. & Ors. by order dated 17th April, 2009, referring to Section 34(3) of the Act as under:-

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“3. The Apex Court has declared that the provisions in Section 34(3) has to be construed strictly. The time limit so prescribed is absolute and unextendable. (State of Goa Vs. Western Builders (2006) 6 SCC 239). Section 14 of the Limitation Act provides exclusion of period. (Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department& Ors.,

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(2008) 7 S.C.C.169 . In the case of Shakti Tubes Limited Vs. State of Bihar & Ors., (2009) 1 S.C.C. 786 , it is held that the provisions of Section 14 of the Limitation Act is applicable to the proceedings under Section 34 of the Act. The fact and circumstances has to be seen. It does not apply automatically.”

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17 In view of above, it is further clear that except the case of exclusion as contemplated under Section 14 of the Limitation Act, the Court has no power to entertain and/ or consider and/or condone the delay as contemplated under Section 5 of the Limitation Act while deciding such application under Section 34 (3) of the Act except last thirty days. Therefore, the submission of the learned counsel appearing for the Petitioner that there were various reasons for the Petitioner not to initiate proceedings within limitation after receipt of rejection of his application under Section 33 of the Act on 1^st July, 2009, just cannot be considered as present petition was filed on 7^th October, 2009.

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18 Therefore, without observing anything on the merits of the matter, in view of above clear provisions of law, as well as, undisputed position of facts, in my view, the present Petition under Section 34 of the Arbitration Act is liable to be dismissed on the ground of limitation itself.

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19 The Petition is accordingly dismissed with no order as to costs.

Amit S. Lanavat v. Kotak Securities

Case brief

What is this about?

What did the court decide?

Amit S. Lanavat v. Kotak Securities

Case brief

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