DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. versus M/S NAVIGANT TECHNOLOGIES PVT. LTD. on 2 March 2021

1. The legal requirement of signing the arbitral award by asole arbitrator, or the members of a tribunal is found in Section31 of the 1996 Act, which provides the form and content of anarbitral award. [Para 4(vii)][1149-C]

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2. Section 31 (1) is couched in mandatory terms, andprovides that an arbitral award shall be made in writing and signedby all the members of the arbitral tribunal. If the arbitral tribunalcomprises of more than one arbitrator, the award is made whenthe arbitrators acting together finally express their decision inEwriting, and is authenticated by their signatures. An award takeslegal effect only after it is signed by the arbitrators, which givesit authentication. There can be no finality of the award, exceptafter it is signed, since signing of the award gives legal effect andvalidity to it. The making and delivery of the award are differentstages of an arbitration proceeding. An award is made when it isFauthenticated by the person who makes it. The statute makes itobligatory for each of the members of the tribunal to sign theaward, to make it a valid award. The usage of the term “shall”makes it a mandatory requirement. It is not merely a ministerialact, or an empty formality which can be dispensed with.G[Para 4(viii)][1149-G-H; 1150-A-C]

3. Sub-section (1) of Section 31 read with sub-section (4)makes it clear that the Act contemplates a single date on whichthe arbitral award is passed i.e. the date on which the signedcopy of the award is delivered to the parties. Section 31 (5) enjoins H

upon the arbitrator / tribunal to provide the signed copy of thearbitral award to the parties. The receipt of a signed copy of theaward is the date from which the period of limitation for filingobjections u/S. 34 would commence. This would be evidentfrom the language of sub-section (3) of Section 34(3).[Para 4(ix)][1150-D-E]

4. The date on which the signed award is provided to theparties is a crucial date in arbitration proceedings under the IndianArbitration and Conciliation Act, 1996. It is from this date that:(a) the period of 30 days’ for filing an application under Section33 for correction and interpretation of the award, or additionalaward may be filed; (b) the arbitral proceedings would terminateas provided by Section 32(1) of the Act; (c) the period of limitationfor filing objections to the award under Section 34 commences.[Para 4(xvii)][1153-G; 1154-A]

5. Section 34 provides recourse for judicial scrutiny of theaward by a Court, upon making an application under sub-sections(2) and (3) for setting aside the award. The period of limitationfor filing the objections to the award u/S. 34 commences from thedate on which the party making the application has “received” asigned copy of the arbitral award, as required by Section 31(5) ofthe 1996 Act. Section 34(3) provides a specific time limit of threemonths from the date of “receipt” of the award, and a furtherperiod of thirty days, if the Court is satisfied that the party wasprevented by sufficient cause from making the application withinthe said period, but not thereafter. [Para 4(xviii)][1154-B-D]

6. Applying the law to the facts of the present case, thisCourt finds from a perusal of the arbitral proceedings that eventhough the award was pronounced on 27.04.2018, the signed copyof the award was provided to the parties only on 19.05.2018. Theprocedural orders of the tribunal reveal that on 27.04.2018, onlya copy of the award was provided to the parties to point out anycomputation error, any clerical or typographical error, or any othererror of similar nature which may have occurred in the award onthe next date. It was also recorded that the third arbitrator haddissented, and would be delivering his separate opinion. On12.05.2018, the third arbitrator pronounced his dissentingopinion. On that date, the tribunal posted the matter to A

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A19.05.2018, to enable the parties to point out any typographicalor clerical mistakes in the dissenting opinion, and for handingover the original record of the proceedings to the parties. On19.05.2018, the signed copy of the award and the dissentingopinion, alongwith the original record, were handed over to theparties, as also to each of the arbitrators. The tribunal orderedBthe termination of the proceedings. [Para 5][1160-C-F]

7. This Court is of the considered opinion that the periodof limitation for filing objections would have to be reckoned fromthe date on which the signed copy of the award was made availableto the parties i.e. on 19.05.2018 in the instant case. [Para 6]C[1160-G]

Union of India v. Tecco Trichy Engineers & Contractors(2005) 4 SCC 239 : [2005] 2 SCR 983; P. Radha Bai v.P. Ashok Kumar (2019) 13 SCC 445 : [2018] 12 SCR143; Ssangyong Engineering and Construction Co.Ltd.Dv. NHAI (2019) 15 SCC 131 : [2019] 7 SCR 522– relied on.

State of Maharashtra v. Ark Builders (2011) 4 SCC 616: [2011] 4 SCR 432; Anilkumar Jinabhai Patel v.Pravinchandra Jinabhai Patel (2018) 15 SCC 178 :E[2018] 3 SCR 718; State of Himachal Pradesh vHimachal Techno Engineers (2010) 12 SCC 210 :[2010] 8 SCR 1025; Union of India v. PopularConstruction (2001) 8 SCC 470 : [2001] 3 Suppl. SCR619; Simplex Infrastructure v. Union of India (2019)12 SCC 455 – referred to.F

Axios Navigation v. Indian Oil Corporation 2012 SCCOnline Bom 4; Bharat Sanchar Nigam Ltd. v. Acomeand Ors. AIR 2009 Delhi 102; Axion Navigation v.Indian Oil Corporation Ltd. (2012) 114 (1) Bom LRG392; Oriental insurance Co. v. Air India Ltd. (2019)SCC Online Del 11634 – referred to.

Case Law Reference

[2019] 7 SCR 522relied onParas 3.1, 4.20[2005] 2 SCR 983relied onPara 4.10H

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 791of 2021.

From the Judgment and Order dated 11.12.2019 of the High Courtof Punjab & Haryana at Chandigarh in FAO No. 1954 of 2019.

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Hemant Gupta, Ms. Payal Gupta, Ms. Sunakshi Gupta, TusharSharma, Sanjay Kumar Visen, Advs. for the Appellant.

Joby P. Varghese, Adv. for the Respondent.

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The Judgment of the Court was delivered by INDU MALHOTRA, J.

Leave granted.

1. The present Civil Appeal arises from a Petition filed underSection 34 of the Arbitration and Conciliation Act, 1996 by the Appellant-Bijli Vitrain Nigam to challenge the arbitral award dated 27.04.2018passed by a three-member tribunal (2:1) in favour of the respondentcompany.

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2. The issue which has arisen for our consideration is as to whetherthe period of limitation for filing the Petition under Section 34 wouldcommence from the date on which the draft award dated 27.04.2018was circulated to the parties, or the date on which the signed copy of theaward was provided.

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(i) The background facts emanate from a Service LevelAgreement dated 02.05.2011 executed by the appellant-corporation in favour of the Respondent-company providingcall centre services.

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Clause 13 of the Agreement provided for resolution ofdisputes through arbitration by a three-member tribunal,under the Arbitration and Conciliation Act, 1996.

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AClause 13 reads as :

“13. Arbitration

All matter question, disputes, differences and/or claims arisingout of and/or concerning and/or in connection and/or inconsequences or relating to the Contract whether or not obligationsof either or both parties under the Contract be subsisting at thetime of such dispute and whether or not the contract has beenterminated or purported to be terminated or completed, shall bereferred to the arbitration which shall be conducted by threearbitrators, one each to be nominated by the Service Provider andthe Nigam (Arbitrator to be approved by the MD DHBVNL orauthority of the Nigam) and the third to be named by the presidentof the institution of Engineers, India. If either of the parties fails toappoint its arbitrator within thirty (30) days after receipt of a noticefrom the other party invoking the arbitration clause, the presidentof the institution of Engineers, India, shall have the power at therequest of either of the parties, to appoint the arbitrator. A certifiedcopy of the order of the institution of engineers (India) makingsuch an appointment will be furnished to each of the parties.

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The decision of the majority of the arbitrators shall be final andbinding upon the parties. The parties to the contract agree thatthe cost of arbitration shall be as per instructions to the Nigamissued/prevalent on the date of appointment of arbitral tribunal.The arbitrators may, from time to time, with the consent of theparties enlarge the time for making the award. In the event of anyof the aforesaid arbitrators dying, neglecting, resigning or beingusable to act for any reason, it will be lawful for the partyconcerned to nominate another arbitrator in place of the outgoingarbitrator.

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The arbitrator shall have full powers to review and/or revise anydecision, opinion, direction, certification or valuation of the Engineerin consonance with the Contract, and neither party shall be limitedin the proceedings before such arbitrators to the evidence orarguments put before the engineer for the purpose of obtainingthe said decision.

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Subject to aforementioned provisions, the provisions of theArbitration and Conciliation Act, 1996 and the Rules there underany statutory modifications thereof for the time being enforce,shall be deemed to apply to the Arbitration proceedings under theclause.”

(ii) On 16.10.2014, the appellant corporation terminated theService Level Agreement, which led to disputes betweenthe parties. The disputes were referred to arbitration by athree-member tribunal.

(iii) The arbitral tribunal orally pronounced the award [2:1] on27.04.2018, whereby the claims of the respondent companywere allowed. The parties were informed that the thirdarbitrator had disagreed with the view taken by the majorityof arbitrators, and would be rendering his separate opinion.A copy of the draft award was provided to the parties topoint out any computation, clerical or typographical errorsin the award on the next date of hearing.

The proceedings of the tribunal dated 27.04.2018 readas under :

“27.04.2018

Present:-

Sh. Nishant Shrivastava, Advocate for the claimant withSh. Ankur Bhatia, M.D. of the Claimant.

Sh. Ashish Goyal, Advocate and Sh. Sanjeev Sharma,JE for the respondent.

Vide separately recorded award dated today, claims ofthe claimant have been allowed with cost. Dr. ShivaSharma has agreed with same, whereas Sh. D.S. Yadavhas disagreed. He shall file his separate award. Copiesfree of costs, of the award have been supplied to boththe Ld. Counsels for the parties. To come up on12.05.2017, at 4:30 p.m. for award of Sh. D.S. Yadav,Arbitrator. On that date, parties are also required to showany computation error, any clerical or typographical erroror any other error of similar nature occurred in the awardif any.

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Vinod Jain, D&S Judge(retd.) Presiding ArbitratorSh. Shiva Sharma, D&S Judge (retd.)Sh.D.S. Yadav, Director, DHBVN (retd.)”(emphasis supplied)

The matter was next posted to 12.05.2018.

(iv) On 12.05.2018, a copy of the dissenting opinion wasprovided by the third arbitrator to the parties (even thoughthe opinion was dated 27.04.2018). The matter was thenposted to 19.05.2018, for the parties to point out anytypographical or clerical mistakes in the dissenting opiniondelivered by the third arbitrator.

The order dated 12.05.2018 reads as :

“12.05.2018

Present:-

Sh. Nishant Shrivastava, Advocate for the claimant Sh. Sanjeev Sharma, JE for the respondent.

Arbitrator Sh. D.S. Yadav has filed his own dissentingAward.

Copies free of cost have been supplied to both theparties to these arbitration proceedings. Both theparties have not pointed out any computation or clericalerror etc. in the award dated 27.04.2018.

Now to come up on 19.05.2018 at the same venue topoint out any typographical or clerical mistakes if any inthe award of today given by Sh. D.S. Yadav, Arbitrator.Venue the same. Also on that date original record shouldbe handed over to the Ld. Counsel for the claimant forsafe custody with pen drives of the record to the otherparty as well as to the Arbitrators.”

(v) On 19.05.2018, the tribunal recorded that both the partieshad not filed any application to point out any clerical ortypographical mistakes in the award, or dissenting opinion.On this date, the signed copy of the arbitral award was provided to both the parties, and the proceedings wereterminated. The proceedings of 19.05.2018 read as :

“19.05.2018

Present:-

Sh. Nishant Shrivastava, Advocate for the claimant Sh. Ashish Goyal, Advocate with Sh. Sanjeev Sharma,JE for the respondent.

Original record has been handed over to Sh. NishantShrivastava, Advocate for its safe custody with him andfor its production before the appropriate authority in caseof need. Pen drives of the record have been provided toboth the counsels as well as to the arbitrators. Record iscomprised of two files. First file of pleadings is comprisedof 270 pages and second file of awards, evidence, ziminiorders and misc. papers is comprised of 596 pages.Awards (signed copies) have also been providedto Ld. Counsel for both the parties free of cost.Both the parties also not filed any applications to pointout any clerical or typographical mistakes in the awards.

Proceedings now come to an end, so are herebyterminated.”

(vi) The Appellant-corporation filed its Objections underSection 34 on 10.09.2018 before the Ld. Civil Court, Hisar,Haryana vide Arbitration Petition No. 316/2018 to challengethe award dated 27.04.2018, along with an Application forcondonation of delay.

It was submitted by the appellant corporation that theobjections were filed within the period prescribed by Section34(3) i.e. within 3 months and 30 days from the date ofreceipt of the signed award on 12.05.2018.

(vii) The Civil Court dismissed the Application for condonationof delay vide Order dated 14.02.2019. It was held that theAppellant had received the majority award on 27.04.2018.Thus, the period of limitation starts running from the same A

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Adate. Accordingly, the period of limitation of three monthsstarts from 27.04.2018 i.e. the date on which the Appellantreceived the arbitral award. The proviso to Section 34(3)provides that if the Court is satisfied that the applicant wasprevented from sufficient cause from making the applicationwithin 3 months, it may entertain the application within aBfurther period of 30 days. In the present case, the applicationu/S. 34 was filed even after the expiry of the further periodof 30 days. Merely because the dissenting opinion waserroneously styled as an award by the minority arbitrator, itcannot be said that the dissenting opinion attains the statusCof an award. Consequently, the objections were dismissedsolely on the ground of delay.

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(viii) The appellant corporation filed Appeal No. 1954/2019(O&M) under Section 37 of the Arbitration Act before theHigh Court.

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DThe High Court vide the impugned Order dated 11.12.2019affirmed the Order passed by the Civil Court. It was heldthat a reading of Section 31 clearly reflects that once anaward is signed and communicated by the majority ofarbitrators, the same would constitute an “award”. Thesigned copy of the majority award i.e. signed by two of theEthree arbitrators was received on 27.04.2018, and u/S. 34(3),the objections had to be filed within 3 months, which wouldexpire on 27.07.2018. Even if the benefit of 30 days hadbeen granted to the Appellants, the objections ought to havebeen filed by 26.08.2018, whereas the objections had beenFfiled on 10.09.2018. There was no infirmity in the judgmentof the Civil Court, and accordingly, the Appeal wasdismissed.

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(ix) Aggrieved by the rejection of the objections under Section34 on the ground of delay, the appellant corporation hasGfiled the present Appeal.

3. Submissions of the parties

(i) The appellant corporation inter alia contended that itsobjections had been erroneously dismissed by the AdditionalCivil Judge, as well as the High Court on the sole ground oflimitation, and not on merits. It was submitted that referenceH

to the ‘arbitral award’ in the Arbitration Act includes boththe majority award as well as the minority opinion.

Section 31(1) of the Act provides that all the members ofthe tribunal shall sign the award. Section 31(2) which permitsan award to be rendered so long as it is signed by the majorityof the members, and reasons for omission of the signatureof the third arbitrator is mentioned, applies only in the caseof a unanimous award. Section 31(2) has no applicationwhen there is dissenting view rendered by one of thearbitrators.

Section 34 of the Act provides for objections to be filedagainst the arbitral award, and not the majority award alone.Consequently, the time limit to file objections against anaward under Section 34(3) of the Act, does not relate toonly the majority award, but to the arbitral award, whichincludes the opinion of the dissenting member of the tribunal.

It was contended that if the majority award was taken tomean the arbitral award, the dissenting opinion of theminority would have no relevance. Such a view would causegrave prejudice to the award debtor.

It was further submitted that even though the award of themajority was pronounced on 27.04.2018, the tribunal postedthe matter on 12.05.2018 to enable the parties to point outany correction, or any typographical or clerical error in theaward. On 12.05.2018, the dissenting opinion waspronounced, and a copy was provided to the parties. Thematter was next posted on 19.05.2018, to consider anyapplication for correction in the opinion of the minority. Sinceno application for correction of the award, or the minorityopinion, was filed by the parties, the tribunal terminated theproceedings.

It was further submitted that the dissenting opinion has beenheld to be the correct view by the Courts in various cases.Reliance was placed on the judgment of this Court inSsangyong Engineering and Construction Co. ltd. v.NHAI.,[1 ]wherein thedissenting opinion was upheld as beingthe correct view, and was affirmed. Reference was made 1 2019 (15) SCC 131.

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to the judgment of the Bombay High Court in AxiosNavigation v. Indian Oil Corporation,[2] wherein it washeld that the view of the minority was relevant for theadjudication of objections under Section 34 of the Act.

(ii) On the other hand, the Respondents contended that theobjections filed by the appellant corporation under Section34 of the Arbitration Act are barred by limitation, and oughtto be dismissed as such. The contention of the Respondentis that since the majority award was pronounced on27.04.2018, the limitation period applicable under Section34(3) would commence from this date.

The Respondent placed reliance on Section 34(3) of theAct to submit that a party may file objections to the awardwithin a period of three months from the date of receipt ofthe award. On sufficient cause being shown to thesatisfaction of the Court, the three months period could beextended by an additional period of thirty days. TheRespondent submitted that the time for filing objections wasavailable till 26.07.2018, or if sufficient cause was madeout, an additional period of 30 days’ which expired on26.08.2018.

The dissenting opinion of the minority member was not anaward for the purposes of computing the limitation periodprescribed under sub-section (3) of Section 34.

Section 29(1) of the Act contemplates that the decision ofthe majority of members of the tribunal, is the arbitral award.Reliance was placed on Section 31(2) of the Act whichprovides that the signature of all the members of the tribunal was not required, so long as the award was signed by amajority of the members, and reasons for omission of thesignature of the third arbitrator were recorded in the award.

The opinion of the minority was only a view, and could notbe enforced as an award. It could not be considered to bethe arbitral award for the purpose of computing limitationunder Section 34(3) of the Act.

Reliance was placed on the judgments of the Delhi andBombay High Court in Bharat Sanchar Nigam Ltd. v.Acome and Ors.[3], Axion Navigation v. Indian OilCorporation Ltd.,[4] and Oriental insurance Co. v. AirIndia Ltd.,[5] wherein it was held that the limitation periodunder Section 34(3) of the Act shall commence from thedate when the award is passed.

4. Discussion & Analysis

We have heard the Ld. counsel for the parties. In order toappreciate the rival contentions of the parties, we will first examine thescheme of the Arbitration and Conciliation Act, 1996.

(i) Section 2 (1)(c) of the 1996 Act defines “arbitral award” toinclude an interim award. The phrase “arbitral award” hasbeen used in several provisions of the 1996 Act.

The statute recognises only one arbitral award being passedby an arbitral tribunal, which may either be a unanimousaward, or an award passed by a majority in the case of apanel of members. An award is a binding decision made bythe arbitrator/s on all the issues referred for adjudication.The award contains the reasons assigned by the tribunal onthe adjudication of the rights and obligations of the partiesarising from the underlying commercial contract. The awardmust be one which decides all the issues referred forarbitration. The view of a dissenting arbitrator is not anaward, but his opinion. However, a party aggrieved by theaward, may draw support from the reasoning and findingsassigned in the dissenting opinion.

(ii) The phrase ‘arbitral tribunal’ has been defined by Section2(1)(d) to mean a sole arbitrator, or a panel of arbitrators.

(iii) Chapter VI of the Arbitration and Conciliation Act providesthe procedure for making of an arbitral award, andtermination of arbitral proceedings.

Sections 28 to 31 relate to the procedure for making theaward. Section 28 provides the rules applicable for thedetermination of a dispute by arbitration.

3 AIR 2009 Delhi 102.

4 (2012) 114 (1) Bom LR 392.

5 (2019) SCC Online Del 11634.

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A(iv)Section 29 of the 1996 Act deals with decision making by apanel of arbitrators. Section 29 reads as :

“29. Decision making by a panel of arbitrators.-(1) Unlessotherwise agreed by the parties, in arbitralproceedings with more than one arbitrator, any decisionof the arbitral tribunal shall be made by a majority of allits members.

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(2) Notwithstanding sub-section (1), if authorised by theparties or all the members of the arbitral tribunal,questions of procedure may be decided by the presidingarbitrator.”

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Sub-section (1) provides that unless the parties agreeotherwise, in arbitral proceedings with more than onearbitrator, “any decision of the arbitral tribunal shall be madeDby a majority of all its members”.

An “arbitral award” is the decision made by the majoritymembers of an arbitral tribunal, which is final and bindingon the parties.

Section 35 provides that an arbitral award shall be “finaland binding” on the parties and persons claiming under them.A dissenting opinion does not determine the rights or liabilitiesof the parties which are enforceable under Section 36 ofthe Act.

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(v) The reference to the phrase “arbitral award” in SectionsF34 and 36 refers to the decision of the majority of themembers of the arbitral tribunal. A party cannot file a petitionu/S. 34 for setting aside, or u/S. 36 for enforcement of adissenting opinion. What is capable of being set aside u/S.34 is the “arbitral award” i.e. the decision reached by theGmajority of members of the tribunal. Similarly, u/S. 36 whatcan be enforced is the “arbitral award” passed by themajority of the members.

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(vi) Section 29A was inserted by the 2015 Amendment Act.Under sub-section (1), the arbitral tribunal [other than in aninternational commercial arbitration] is mandated by statute H

to make the arbitral award within a period of 12 months’from the date of completion of pleadings, as provided bysub-section (4) of Section 23. Section 29A(4) provides thatthe “mandate” of the arbitrator/s shall terminate if the awardis not made “within” the period specified in sub-section (1),or the extended period under sub-section (3). Therefore,by prescription of law, the mandate of the arbitrator/s wouldterminate if the time limits are not followed.

(vii) Legal requirement of signing the award

(vii) Legal requirement of signing the award The legal requirement of signing the arbitral award by asole arbitrator, or the members of a tribunal is found inSection 31 of the 1996 Act, which provides the form andcontent of an arbitral award. Section 31 provides that :

“31. Form and contents of arbitral award.- (1) An arbitralaward shall be made in writing and shall be signed bythe members of the arbitral tribunal.

(2) For the purposes of sub-section (1), in arbitralproceedings with more than one arbitrator, the signaturesof the majority of all the members of the arbitral tribunalshall be sufficient so long as the reason for any omittedsignature is stated.

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(4) The arbitral award shall state its date and the placeof arbitration as determined in accordance with section20 and the award shall be deemed to have been made atthat place.

(5) After the arbitral award is made, a signed copy shallbe delivered to each party.

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(viii) Section 31 (1) is couched in mandatory terms, and providesthat an arbitral award shall be made in writing and signedby all the members of the arbitral tribunal. If the arbitraltribunal comprises of more than one arbitrator, the award ismade when the arbitrators acting together finally express A

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Atheir decision in writing, and is authenticated by theirsignatures.[6] An award takes legal effect only after it is signedby the arbitrators, which gives it authentication. There canbe no finality of the award, except after it is signed, sincesigning of the award gives legal effect and validity to it.The making and delivery of the award are different stagesBof an arbitration proceeding. An award is made when it isauthenticated by the person who makes it.

The statute makes it obligatory for each of the members ofthe tribunal to sign the award, to make it a valid award. Theusage of the term “shall” makes it a mandatory requirement.CIt is not merely a ministerial act, or an empty formality whichcan be dispensed with.

(ix) Sub-section (1) of Section 31 read with sub-section (4)makes it clear that the Act contemplates a single date onwhich the arbitral award is passed i.e. the date on whichDthe signed copy of the award is delivered to the parties.Section 31 (5) enjoins upon the arbitrator / tribunal to providethe signed copy of the arbitral award to the parties. Thereceipt of a signed copy of the award is the date from whichthe period of limitation for filing objections u/s. 34 wouldEcommence. This would be evident from the language ofsub-section (3) of Section 34(3) which reads :

“34. Application for setting aside arbitral award.

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(3) An application for setting aside may not be madeafter three months have elapsed from the date on whichthe party making that application had received thearbitral awardor, if a request had been made underSection 33, from the date on which that request hadGbeen disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicantwas prevented by sufficient cause from making the 6 Malhotra’s Commentary on the Law of Arbitration, Wolters Kluwer, 4th Ed., Vol.1,p.794.H

application within the said period of three months it mayentertain the application within a further period of thirtydays, but not thereafter.”

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(x) In Union of India v. Tecco Trichy Engineers &Contractors[7], a three-judge bench of this Court held thatthe period of limitation for filing an application u/s. 34 wouldBcommence only after a valid delivery of the award takesplace u/S. 31(5) of the Act. In para 8, it was held as under:

“8. The delivery of an arbitral award under sub-section(5) of Section 31 is not a matter of mere formality. It isa matter of substance.It is only after the stage underCSection 31 has passed that the stage of termination ofarbitral proceedings within the meaning of Section 32 ofthe Act arises. The delivery of arbitral award to theparty, to be effective, has to be ‘received’ by the party.This delivery by the Arbitral Tribunal and receipt by theDparty of the award sets in motion several periods oflimitation such as an application for correction andinterpretation of an award within 30 days under Section33(1), an application for making an additional awardunder Section 33(4) and an application for setting asidean award under Section 34(3) and so on. As this deliveryEof the copy of award has the effect of conferring certainrights on the party as also bringing to an end the right toexercise those rights on expiry of the prescribed periodof limitation which would be calculated from that date,the delivery of the copy of award by the Tribunal andFthe receipt thereof by each party constitutes an important”stage in the arbitral proceedings.

(xi) The judgment in Tecco Trichy Engineers (supra)wasfollowed in State of Maharashtra v. Ark Builders,[8]Gwherein this Court held that Section 31(1) obliges themembers of the arbitral tribunal to make the award in writingand sign it. The legal requirement under sub-section (5) of 7 (2005) 4 SCC 239.

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ASection 31 is the delivery of a copy of the award signed bythe members of the arbitral tribunal / arbitrator, and not anycopy of the award. On a harmonious construction of Section31(5) read with Section 34(3), the period of limitationprescribed for filing objections would commence only fromthe date when the signed copy of the award is delivered toBthe party making the application for setting aside the award.If the law prescribes that a copy of the award is to becommunicated, delivered, despatched, forwarded, rendered,or sent to the parties concerned in a particular way, andsince the law sets a period of limitation for challenging theCaward in question by the aggrieved party, then the period oflimitation can only commence from the date on which theaward was received by the concerned party in the mannerprescribed by law.

The judgment in Tecco Trichy has been recently followedDin Anilkumar Jinabhai Patel v. Pravinchandra JinabhaiPatel.[9]

(xii) In State of Himachal Pradesh v Himachal TechnoEngineers,[10] this Court held that if one of the parties to thearbitration is Government, or a statutory body, which hasEnotified holidays, and if the award was delivered to a beldaror a watchman on a holiday or non-working day, it cannotbe considered to be “receipt of the award” by the partyconcerned for the purposes of Section 31(5) of the Act.When the award is delivered, or deposited, or left in theoffice of a party on a non-working day, the date of physicalFdelivery is not the date of “receipt” of the award by thatparty. For the purposes of Section 31(5), the date of receiptwill have to be the next working day.

(xiii) Section 32 provides that the arbitral proceedings shall beterminated after the final award is passed. With theGtermination of the arbitral proceedings, the mandate of thearbitral tribunal terminates, and the tribunal becomes functusofficio.

9 (2018) 15 SCC 17810 (2010) 12 SCC 210H

(xiv) In an arbitral tribunal comprising of a panel of threeAmembers, if one of the members gives a dissenting opinion,it must be delivered contemporaneously on the same dateas the final award, and not on a subsequent date, as thetribunal becomes functus officio upon the passing of thefinal award. The period for rendering the award andBdissenting opinion must be within the period prescribed bySection 29A of the Act.

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(xv) In the treatise on ‘International Commercial Arbitration’authored by Fouchard, Gaillard, Goldman, it has been opinedthat :

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“1403.- A dissenting opinion can only be issued whenthe majority has already made the decision whichconstitutes the award. Until then, any document issuedby the minority arbitrator can only be treated as part ofthe deliberations. However, once the majority decisionDhas been reached, it is preferable for the author of thedissenting opinion to communicate a draft to the otherarbitrators so as to enable them to discuss the argumentsput forward in it. The award made by the majority couldthen be issued after the dissenting opinion, or at least,after the draft of the dissenting opinion...” [11]E

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(xvi) There is only one date recognised by law i.e. the date onwhich a signed copy of the final award is received by theparties, from which the period of limitation for filing objectionswould start ticking. There can be no finality in the award,except after it is signed, because signing of the award giveslegal effect and finality to the award.

F

(xvii) The date on which the signed award is provided to the partiesis a crucial date in arbitration proceedings under the IndianArbitration and Conciliation Act, 1996. It is from this datethat: (a) the period of 30 days’ for filing an application underSection 33 for correction and interpretation of the award,or additional award may be filed; (b) the arbitral proceedingswould terminate as provided by Section 32(1) of the Act; G

11 Fouchard, Gaillard, Goldman, International Commercial Arbitration, Ed. EmmannuelGaillard, John Savage,, p.786 (Kluwer Law International).

(c) the period of limitation for filing objections to the awardunder Section 34 commences.

A

(xviii) Section 34 provides recourse for judicial scrutiny of theaward by a Court, upon making an application under sub-sections (2) and (3) for setting aside the award.

B

The period of limitation for filing the objections to the awardu/S. 34 commences from the date on which the partymaking the application has “received” a signed copy of thearbitral award, as required by Section 31(5) of the 1996Act.

C

Section 34(3) provides a specific time limit of three monthsfrom the date of “receipt” of the award, and a further periodof thirty days, if the Court is satisfied that the party wasprevented by sufficient cause from making the applicationwithin the said period, but not thereafter.

D

In Union of India v. Popular Construction,[12] this Courtheld that Section 5 of the Limitation Act, 1963 would notapply to applications filed under Section 34 of the ArbitrationAct. It was held that :

“12. As far as the language of Section 34 of the 1996Act is concerned, the crucial words are “but notthereafter” used in the proviso to sub-section (3). In ouropinion, this phrase would amount to an express exclusionwithin the meaning of Section 29(2) of the LimitationAct, and would therefore bar the application of Section5 of that Act. Parliament did not need to go further. Tohold that the court could entertain an application to setaside the award beyond the extended period under theproviso, would render the phrase “but not thereafter”wholly otiose. No principle of interpretation would justifysuch a result.”

E

F

G

In Simplex Infrastructure v. Union of India,[13] this Courtheld that the phrase “but not thereafter” provided underSection 34(3) of the Act makes it evident that the statutoryperiod of limitation for filing an application for setting aside 12 (2001) 8 SCC 470.H13 (2019) 12 SCC 455

is three months, which is extendable by thirty days, ifsufficient cause is made out. No further period of time canbe granted for the filing of an application under Section 34.

(xix) If the objections are not filed within the period prescribedby Section 34, the award holder is entitled to move forenforcement of the arbitral award as a deemed decree ofthe Court u/S. 36 of the Act.

This Court in P. Radha Bai v. P. Ashok Kumar,[14 ]held that:

“32.5. Once the time-limit or extended time-limit forchallenging the arbitral award expires, the period forenforcing the award under Section 36 of the ArbitrationAct commences. This is evident from the phrase “wherethe time for making an application to set aside thearbitral award under Section 34 has expired”.[“36. Enforcement.—Where the time for making anapplication to set aside the arbitral award underSection 34 has expired, or such application having beenmade, it has been refused, the award shall be enforcedunder the Code of Civil Procedure, 1908 (5 of 1908) inthe same manner as if it were a decree of theCourt.”(emphasis supplied)] There is an integral nexusbetween the period prescribed under Section 34(3) tochallenge the award and the commencement of theenforcement period under Section 36 to execute theaward.

36.2. Second, extending Section 17 of the LimitationAct to Section 34 would do violence to the scheme ofthe Arbitration Act. As discussed above, Section 36enables a party to apply for enforcement of award whenthe period for challenging an award under Section 34has expired. However, if Section 17 were to be extendedto Section 34, the determination of “time for making anapplication to set aside the arbitral award” in Section 36will become uncertain and create confusion in theenforcement of award. This runs counter to the schemeand object of the Arbitration Act.”

A

BC

F

G

A(xx) Relevance of a dissenting opinion

(a) The dissenting opinion of a minority arbitrator can be reliedupon by the party seeking to set aside the award to buttressits submissions in the proceedings under Section 34.

(b) At the stage of judicial scrutiny by the Court under SectionB34, the Court is not precluded from considering the findingsand conclusions of the dissenting opinion of the minoritymember of the tribunal.

(c) In the commentary of ‘Russel on Arbitration’, the relevanceof a dissenting opinion was explained as follows :C“6-058. Dissenting opinions. Any member of thetribunal who does not assent to an award need not signit but may set out his own views of the case, either within“”the award document or in a separate dissenting opinion.The arbitrator should consider carefully whether thereDis good reason for expressing his dissent, because adissenting opinion may encourage a challenge to theaward. This is for the parties’ information only and doesnot form part of the award, but it may be admissible asevidence in relation to the procedural matters in the eventof a challenge or may add weight to the arguments of aE”[15]party wishing to appeal against the award.

(d) Gary B. Born in his commentary on InternationalCommercial Arbitration opines that :

F“Even absent express authorization in national law orapplicable institutional rules (or otherwise), the right toprovide a dissenting or separate opinion is an appropriateconcomitant of the arbitrator’s adjudicative function andthe tribunal’s related obligation to make a reasonedaward. Although there are legal systems whereGdissenting or separate opinions are either not permitted,or not customary, these domestic rules have littleapplication in the context of party-nominated co-arbitrators, and diverse tribunals. Indeed, the right of an 15 David St. John Sutton, Judith Gill and Matthew Gearing QC, Russel on Arbitration,H24[th ]ed. (Sweet & Maxwell), p. 313.

arbitrator to deliver a dissenting opinion is properlyconsidered as an element of his / her adjudicativemandate, particularly in circumstances where a reasonedaward is required.Only clear an explicit prohibition shouldpreclude the making and publication to the parties of adissenting opinion, which serves an important role in thedeliberative process, and can provide a valuable checkon arbitrary or indefensible decision making.”[16]

It is further commented that :

“There is nothing objectionable at all about an arbitrator“systematically drawing up a dissenting opinion, andinsisting that it be communicated to the parties”. If anarbitrator believes that the tribunal is making a seriouslywrong decision, which cannot fairly be reconciled withthe law and the evidentiary record, then he / she mayexpress that view.There is nothing wrong – and on thecontrary, much that is right – with such a course as partof the adjudicatory process in which the tribunal’sconclusion is expressed in a reasoned manner. And, ifthe arbitrator considers that the award’s conclusionsrequire a “systematic” discussion, that is also entirelyappropriate; indeed, it is implied in the adjudicativeprocess, and the requirement of a reasoned award.”[17]

It is further observed that :

“…the very concept of a reasoned award by a multi-member tribunal permits a statement of different reasons– if different members of the tribunal in fact hold differentviews. This is an essential aspect of the process bywhich the parties have an opportunity to both, presenttheir case, and hear the reasons for the tribunal’sdecision; not hearing the dissent deprives the parties ofan important aspect of this process.”

(e) In Ssangyong Engineering & Construction Co. Ltd v.NHAI,[18] this Court upheld the view taken in the dissenting 16 Gary Born, International Commercial Arbitration, Wolters Kluwer, Ed. 2009, VolumeII, p. 2466.

17 Gary Born, International Commercial Arbitration, Wolters Kluwer, Ed. 2009, VolumeII, p. 2469.18 (2019) 15 SCC 131.

A

BC

D

E

F

G

H

A

B

C

D

E

F

G

H

opinion to be the correct position in law. In this case, theCourt was hearing a special leave petition from an orderpassed by a division bench of the Delhi High Court. ThisCourt noted that:

“12.A Section 34 petition which was filed by theappellant was rejected by the learned Single Judge of-the Delhi High Court, by a judgment and order dated 98-2016 [Ssangyong Engg. and Construction Co.Ltd. v. NHAI, 2016 SCC OnLine Del 4536] , in which itwas held that a possible view was taken by the majorityarbitrators which, therefore, could not be interfered with,given the parameters of challenge to arbitral awards.The learned Single Judge also went on to hold that theNew Series published by the Ministry could be appliedin the case of the appellant as the base indices for 2004-2005 under the New Series were available. Having soheld, the learned Single Judge stated that even though the view expressed in the dissenting award is moreappealing, and that he preferred that view, yet he foundthat since the majority award is a possible view, the scopeof interference being limited, the Section 34 petition wasdismissed. A Section 37 appeal to the Division Bench ofthe Delhi High Court yielded the same result, by theimpugned judgment dated 3-4-2017[Ssangyong Engg.and Construction Co. Ltd. v. NHAI, 2017 SCC OnLineDel 7864 : (2017) 240 DLT 711].”

This Court set aside the award. However, in paragraph 77of the Judgment, the Court held as under :

“77. The judgments of the Single Judge [SsangyongEngg. and Construction Co. Ltd. v. NHAI, 2016 SCCOnLine Del 4536] and of the Division Bench[Ssangyong Engg. and Construction Co.Ltd. v. NHAI, 2017 SCC OnLine Del 7864 : (2017) 240DLT 711] of the Delhi High Court are set aside.Consequently, the majority award is also set aside. Underthe scheme of Section 34 of the 1996 Act, the disputesthat were decided by the majority award would have tobe referred afresh to another arbitration. This would cause considerable delay and be contrary to one of theimportant objectives of the 1996 Act, namely, speedyresolution of disputes by the arbitral process under theAct. Therefore, in order to do complete justice betweenthe parties, invoking our power under Article 142 of theConstitution of India, and given the fact that there is aminority award which awards the appellant its claimbased upon the formula mentioned in the agreementbetween the parties, we uphold the minority award, andstate that it is this award, together with interest, that willnow be executed between the parties.The minorityaward, in paras 11 and 12, states as follows:

“11. I therefore award the claim of the claimant in full.

12. Costs — no amount is awarded to the parties. Eachparty shall bear its own cost.”

In Ssangyong, this Court upheld the view taken by thedissenting arbitrator in exercise of its powers under Article142 of the Constitution, in order to do complete justicebetween the parties. The reason for doing so is mentionedin paragraph 77 i.e. the considerable delay which would becaused if another arbitration was to be held. This Courtexercised its extraordinary power in Ssangyong keeping inmind the facts of the case, and the object of expeditiousresolution of disputes under the Arbitration Act.

(f) In law, where the Court sets aside the award passed by themajority members of the tribunal, the underlying disputeswould require to be decided afresh in an appropriateproceeding.

Under Section 34 of the Arbitration Act, the Court mayeither dismiss the objections filed, and uphold the award, orset aside the award if the grounds contained in sub-sections(2) and (2A) are made out. There is no power to modify anarbitral award.

In McDermott International Inc. v. Burn Standard Co.Ltd., this Court held as under :

“52. The 1996 Act makes provision for the supervisoryrole of courts, for the review of the arbitral award only A

BC

D

E

F

G

H

to ensure fairness. Intervention of the court is envisagedin few circumstances only, like, in case of fraud or biasby the arbitrators, violation of natural justice, etc. Thecourt cannot correct errors of the arbitrators. It can onlyquash the award leaving the parties free to begin thearbitration again if it is desired.So, the scheme of theprovision aims at keeping the supervisory role of thecourt at minimum level and this can be justified as partiesto the agreement make a conscious decision to excludethe court’s jurisdiction by opting for arbitration as theyprefer the expediency and finality offered by it.”

A

B

C

5. Applying the law to the facts of the present case, we find froma perusal of the arbitral proceedings that even though the award waspronounced on 27.04.2018, the signed copy of the award was providedto the parties only on 19.05.2018. The procedural orders of the tribunalreveal that on 27.04.2018, only a copy of the award was provided to theDparties to point out any computation error, any clerical or typographical error, or any other error of similar nature which may have occurred inthe award on the next date. It was also recorded that the third arbitratorhad dissented, and would be delivering his separate opinion. Theproceedings were then posted for 12.05.2018.

EOn 12.05.2018, the third arbitrator pronounced his dissentingopinion. On that date, the tribunal posted the matter to 19.05.2018, toenable the parties to point out any typographical or clerical mistakes inthe dissenting opinion, and for handing over the original record of theproceedings to the parties.FOn 19.05.2018, the signed copy of the award and the dissenting On 19.05.2018, the signed copy of the award and the dissentingopinion, alongwith the original record, were handed over to the parties,as also to each of the arbitrators. The tribunal ordered the termination ofthe proceedings.

6. We are of the considered opinion that the period of limitationGfor filing objections would have to be reckoned from the date on whichthe signed copy of the award was made available to the parties i.e. on19.05.2018 in the instant case.

7. It is the admitted position that the objections were filed withinthe period of limitation prescribed by Section 34(3) of the Act, if reckonedfrom 19.05.2018. Undisputedly, in the instant case, the objections haveH

been filed within the period of limitation prescribed under Section 34(3)from the date of receipt of the signed award.

A

8. In the aforesaid facts and circumstances, the Appeal deservesto succeed. The judgment of the Court of the District and Sessions Judge,Hissar, Haryana dated 14.02.2019, and the impugned order passed bythe High Court of Punjab & Haryana dated 11.12.2019 are accordinglyBset aside.

9. The Petition filed under Section 34 of the Arbitration andConciliation Act, 1996 being Arb. Pet. No. 316 of 2018 is restored to thefile of the Court of District and Sessions Judge, Hissar, Haryana to bedecided on merits in accordance with law.

C

All pending applications are disposed of. Ordered accordingly.

Ankit Gyan

Appeal allowed.

D

E

F

G

H