Arbitration Act 1940 | 30-Day Objection Period Starts When Objector Becomes Aware of Award, Not Upon Formal Notice : Supreme Court

The Supreme Court noted that under the Arbitration Act, 1940 (“1940 Act”), 30-day period for filing objections begins when the objector becomes aware of the award, not upon receiving formal notice“The question for consideration is whether the time for filing a Section 17 application commences when the party seeking to challenge the award receives a formal notice (18.11.2022) of the making of the award, or from the date such party is aware of the existence of the award. In fact, this issue is no more res-integra. Following certain precedents of this Court, we have allowed the appeal having found that the respondent was fully aware of the making of the Award (by 21.09.2022), for the law does not require a formal notice of the making of the Award, as against knowledge/notice of the Award.”, the Court said. The bench comprising Justice PS Narasimha and Justice Sandeep Mehta was hearing an appeal filed against the Delhi High Court's decision which affirmed the trial court's decision to declare the Appellant's application for making of the award as premature because it was filed before the commencement of the limitation period for filing objection against the award. An arbitral award was issued on 21.09.2022, and the Respondent (the award objector) was informally aware of its issuance. However, the formal notice of the award's issuance was sent to them on 18.11.2022. On 10.11.2022, the Appellant filed an application before the trial court seeking a judgment in accordance with the award. The Respondent contested this application, arguing that it was premature. They claimed their right to file objections against the award was unfairly curtailed, asserting that the limitation period for filing such objections would only commence on 18.11.2022, the date they received the formal notice, and not from 21.09.2022, when they were informally aware of the award. Rejecting the Respondent's contention, the judgment authored by Justice Narasimha observed that the formal service of notice of filing of the award is not required to trigger the 30-day limitation period for filing an objection against the making of an award. Even a simple awareness about the making of an award is sufficient to trigger the limitation period for filing an objection, the court clarified. In this regard, the court referred to the case of Bharat Coking Coal Ltd. v C.K. Ahuja (1995) where the Court “had referred a dispute to arbitration and its registry had issued a notice to both parties about the filing of the award. The award-holder, however, relied on the much later date of a formal notice to calculate limitation for filing objections to the award. Relying on the authorities discussed above, it was held that the date of receiving a copy of the award is not the requirement of Section 14(2), but merely awareness that it is available to the parties. This holding signifies that the parties have to take steps to scrutinise the award themselves as soon as it becomes accessible and they are aware of its accessibility.” “it is seen that both the District Court and the High Court fell into error that the limitation for filing objections was still running when the appellant filed an application under Section 17 of the Act on 10.11.2022. The formal date of notice of filing of the award on the respondents, that is, 18.11.2022 holds no significance as they were made sufficiently aware of the award 's filing on 21.09.2022 itself. The court directing the respondents to clear the fees was a clear intimation about its filing. Holding otherwise would not only be departing from precedents of this Court, but also allowing the respondents to take advantage of their own inaction. Hence, the limitation is to be treated as expired on 20.10.2022, and the appellant's application seeking pronouncement of judgment in terms of the award was valid and well beyond the period for filing objections to the award.”, the court held. Accordingly, the appeal was allowed. Appearance: For Petitioner(s) Ms. Madhusmita Bora, AOR Mr. Pawan Kishore Singh, Adv. Mr. Dipankar Singh, Adv. For Respondent(s) Mr. Debojit Borkakati, AOR Mrs. Anuradha Gayeen Saikia, Adv. Case Title: KRISHNA DEVI @ SABITRI DEVI (RANI) M/S S.R. ENGINEERING CONSTRUCTION VERSUS UNION OF INDIA & ORS.Citation : 2025 LiveLaw (SC) 16Click here to read/download the judgment

Arbitration Act 1940 | 30-Day Objection Period Starts When Objector Becomes Aware of Award, Not Upon Formal Notice : Supreme Court

Yash Mittal

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