Delay In Receiving Award Due To Default In Paying Arbitral Fees Cannot Be Held Against Party Seeking To Challenge Award While Calculating Limitation: J&K HC

The Jammu and Kashmir High Court held that since the delivery of a signed copy of the arbitral award was the mandatory requirement under the arbitration act therefore, the limitation for challenging the said award would arise only after the said signed copy is received by the party seeking to challenge the same.The petitioner had not received the certified copy of the award dated 01.03.2024 as the arbitrator had exercised its power under the section 39 of the arbitration act for withholding the arbitral award as payment due from the side of the petitioner was pending and it was only after the outstanding payment was made that the arbitrator gave the signed copy of the said award on 18.10.2024.A bench of Justices Sanjay Dhar observed that there is a distinction between making of award and delivering an award. The court added that making an award refers to the period when a Tribunal finalizes its decision between the parties which is deemed to be made when it is signed by the arbitrator while as Delivering of an award refers to formal handing over of the signed award to the parties in terms of Section 31 (5) of the Act.The court however ruled that period of limitation to challenge the award starts to run against the party challenging the award from the date of delivery of the signed copy of the award to such party.The court said merely because party defaulted in making payment to the arbitrator in paying the fee of the Arbitrator for a few months, the same cannot alter the situation in favour of the respondent. The court said that even otherwise it was open to the respondent to pay the share of the payment which was due to petitioner in terms of section 38 of the Act in order to avoid the delay due to non-payment by the petitioner.The court said that it was not a case where the respondent was rendered remediless because of default of the petitioners.Therefore, the court added the petitioner was within the period of limitation for challenging the arbitral award.BACKGROUND:The petitioner by virtue of this petition had challenged the arbitral award passed by the arbitrator under section 34 of the arbitration and conciliation Act, 1996. respondent has raised a preliminary objection with regard to the maintainability of the petition on the ground of limitation. The learned Arbitrator had invoked powers under Section 39 of the Act and said award would be delivered to the petitioners as and when outstanding amount of fee is deposited by the petitioners which caused delay of few months in challenging the said award by virtue of this present petition. APPEARANCESyed Musaib, Dy.AG for PetitionersShowkat Ali Khan, Advocate for RespondentCase-Title: Chief Engineer PW(R&B) Department and another vs M/s Abdul Salam MirCitation: 2025 LiveLaw (JKL) 131Click Here To Read/Download Order

Delay In Receiving Award Due To Default In Paying Arbitral Fees Cannot Be Held Against Party Seeking To Challenge Award While Calculating Limitation: J&K HC

Aleem Syeed

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