Arbitration Monthly Digest: April 2025

Supreme Court Sec 34(3) Arbitration Act | Application Filed On Next Working Day After 90 Day Period Is Within Limitation : Supreme Court Case Title: M/S R. K. TRANSPORT COMPANY VERSUS M/S BHARAT ALUMINUM COMPANY LTD. (BALCO) Citation : 2025 LiveLaw (SC) 391 A bench of Justices PS Narasimha and Prashant Kumar Mishra held that the three-month limitation period under Section 34(3) of the Arbitration & Conciliation Act, 1996 (“Arbitration Act”) for challenging an arbitral award should not be rigidly interpreted as exactly 90 days, rather it should be interpreted as three calendar months. The Court upheld the filing of an application under Section 34 of the Arbitration Act on 11.07.2022 to set aside an arbitral award passed on 09.04.2022, despite it being beyond the 90-day period. It noted that the limitation period ended on 09.07.2022, which was a court holiday (second Saturday), followed by Sunday. Therefore, the application filed on the next working day, Monday (11.07.2022), was held to be within limitation. Relying on State of Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC 210 and applying Section 12 of the Limitation Act, 1963, the Court reiterated that for calculating limitation under Section 34(3), the date on which the arbitral award is passed must be excluded. Accordingly, the limitation period begins from the day following the date of the award. Supreme Court Holds Chandigarh Authorities Liable For Delay In Film City Project, Directs Refund Of 47.75 Crores To Successful Bidder Case Title: M/s. PARSVNATH FILM CITY LTD. VERSUS CHANDIGARH ADMINISTRATION & OTHERS, CIVIL APPEAL NO.6162 OF 2016 (and connected case) Citation : 2025 LiveLaw (SC) 422 In a recent judgment, the Supreme Court largely upheld an arbitral award passed in favor of a company engaged by the Chandigarh Administration to establish a Multimedia-cum-Film City in the Union Territory, holding the authorities liable to refund a forfeited bid amount of Rs.47.75 crores. A bench of Justices BV Nagarathna and Satish Chandra Sharma delivered the verdict, being of the view that the Punjab and Haryana High Court wrongly set aside the arbitral award. It opined that though time was of the essence to the project sought to be developed, there was a clear and unreasonable delay (of over 16 months) attributable to the authorities in handing over encumbrance-free land to the appellant-Company. Arbitral Tribunal Can Proceed Against Party Though They Weren't Served With S.21 Notice Or Made Party In S.11 Application : Supreme Court Case Title: ADAVYA PROJECTS PVT. LTD. VERSUS M/S VISHAL STRUCTURALS PVT. LTD. & ORS., CIVIL APPEAL NO. 5297 OF 2025 Citation : 2025 LiveLaw (SC) 439 The Supreme Court recently observed that not being served with the notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, and not being made a party in the Section 11 application (for appointment of arbitrator), are not sufficient grounds to hold that a person cannot be made party to arbitral proceedings. "A notice invoking arbitration under Section 21 of the ACA is mandatory...and it is a prerequisite to filing an application under Section 11. However, merely because such a notice was not issued to certain persons who are parties to the arbitration agreement does not denude the arbitral tribunal of its jurisdiction to implead them as parties during the arbitral proceedings...merely because a court does not refer a certain party to arbitration in its order does not denude the jurisdiction of the arbitral tribunal from impleading them during the arbitral proceedings as the referral court's view does not finally determine this issue. The relevant consideration to determine whether a person can be made a party before the arbitral tribunal is if such a person is a party to the arbitration agreement", said a bench of Justices PS Narasimha and Manoj Misra. Supreme Court Flags Long Submissions In S.34/37 Arbitration Act Proceedings, Says Timelimit Needs To Be Imposed Case Title: LARSEN AND TOUBRO LTD. VERSUS PURI CONSTRUCTION PVT. LTD. & ORS. Citation : 2025 LiveLaw (SC) 449 On April 21, the Supreme Court expressed its displeasure over the prolonged arguments and submissions made by members of the Bar in arbitration proceedings under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996. The Court noted that excessively long oral submissions force judges to invest significant time in reviewing extended arguments, often supported by a large volume of case law, regardless of their relevance. This practice, particularly in high-stakes matters, leads to unnecessarily lengthy judgments and ultimately undermines the efficiency and growth of arbitration as an effective dispute resolution mechanism in India. “We have noticed that there is a tendency on the part of senior members of the bar to argue as if these proceedings...

Arbitration Monthly Digest: April 2025

Mohd Talha Hasan

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