Section 34 Applications Challenging Arbitral Awards Subject To ₹120 Court Fee, Higher Fees Under Entry No. 1(10) Not Applicable: Calcutta High Court

The Calcutta High Court bench of Justice Sabyasachi Bhattacharyya has held that the principal application under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award, falls under Entry No. 2(c) of Schedule II of the Court Fees Act. This entry is the residuary provision that prescribes a court fee of Rs. 120 for original applications before the High Court, where no other specific provision in Schedule II applies. The bench clarified that Entry No. 1(10) of the Court Fees Act, which prescribes higher fees for applications seeking a direction for filing an award, an order for filing an agreement, or for enforcing foreign awards, does not extend to principal applications under Section 34. Brief Facts: The matter pertained to an objection raised by SREI Equipment Finance Limited (Respondent) regarding the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 by Sajarul Rahaman (Petitioner). The Respondent contended that the application was barred by limitation due to the insufficient court fees paid at the time of filing. According to the Respondent, the court fee payable for such an application is governed by Serial no. 1(10) of Schedule II of the West Bengal Court Fees Act, 1970 which mandates a fee of Rs. 5,000 for the case. The Respondent argued that under Section 34(3) of the Arbitration Act, the limitation period for filing an application is three months from the date the applicant receives the arbitral award, with an additional thirty days provided under the proviso, during which the court may accept an application if it is satisfied that the applicant was prevented from filing within the initial three months due to sufficient cause. The petitioner received the arbitral award on December 31, 2022, and the initial three-month period expired on March 31, 2023. The additional thirty days expired on April 30, 2023. The application under Section 34 was filed on April 27, 2023, with a court fee of Rs. 130/-, instead of the required Rs. 5,000/-, which has not been paid to date, even beyond the April 30, 2023 deadline. As a result, the Respondent contended that the application should be dismissed as time-barred. In support of its argument, the Respondent referred to Section 4 of the Court Fees Act, which states that no document chargeable with fees under the Act shall be filed, exhibited, or recorded in any court unless the fee prescribed by the Act has been paid. The Respondent argued that Section 4(2), which allows a court to accept a plaint or memorandum of appeal with insufficient fees provided the deficit is paid within a time fixed by the court, is not applicable to applications under Section 34, as such applications do not involve a plaint or memorandum. Consequently, the relaxation provided under Section 4(2) of the Court Fees Act is not applicable the petition. On the other hand, the Petitioner argued that the application under Section 34 was filed within the prescribed time limit with the court fee of Rs. 130/-, as assessed by the Stamp Reporter of the court. The Petitioner contended that there was no error on their part in paying the court fees and relied on the legal maxim Actus Curiae Neminem Gravabit (an act of the court shall prejudice no one) to argue that he should not be penalized for following the court's assessment. Observations by the High Court: The High Court examined the provisions of the Court Fees Act to determine the appropriate court fees for an application under Section 34 of the Arbitration Act challenging an arbitral award. The High Court noted that four entries in Schedule II of the Court Fees Act were important. Firstly, Entry No. 2(c) of Schedule II states a court fee of Rs. 120/- for an original petition filed before the High Court that is not otherwise provided for. This entry acts as a residuary clause applicable only when no other specific provision governs the relevant application. The High Court then considered Entry No. 14, which prescribes court fees for memoranda of appeal under Sections 37 and 50 of the Arbitration Act. However, it noted that an application under Section 34 is not a memorandum of appeal under either of these sections. Next, the High Court examined Entry No. 17(iv) of Schedule II, which specifies court fees for a plaint or memorandum of appeal to set aside an award other than an arbitral award as defined in Clause (c) of sub-section (1) of Section 2 of the Arbitration Act. The High Court held that challenges to arbitral awards are specifically excluded from the scope of this entry. The final and most debated provision was Entry No. 1(10). This entry outlines the court fees for applications under Section 12 or Section 34 of the Arbitration Act, including applications for a direction for filing an award or for an order for filing an agreement as well as applications for enforcing foreign...

Section 34 Applications Challenging Arbitral Awards Subject To ₹120 Court Fee, Higher Fees Under Entry No. 1(10) Not Applicable: Calcutta High Court

Rajesh Kumar

Tags