The High Court clarified the interaction between the limitation provisions of the Arbitration Act, 1996, and the implications of the pandemic and the IBC moratorium.
Calcutta High Court Single-Judge Bench of Justice Sabyasachi Bhattacharyya reviewed miscellaneous Petitions and observed that an application under Section 34 of the Arbitration and Conciliation Act, 1996, is time-barred if filed beyond the three-month period and the additional thirty days, and that a party cannot simultaneously invoke both pandemic-related extensions and the moratorium under the IBC to delay filing. The Court emphasized that the limitation periods are mandatory and must be adhered to without exception.
The High Court addressed the critical issue of whether the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 was barred by limitation. The respondent's counsel contended that according to Section 34(3), an application to set aside an arbitral award must be submitted within three months from the date the party received the award. In this case, the petitioner received the award on November 30, 2019, but the challenge was filed on November 16, 2023, well beyond both the three-month period and the additional thirty days granted by the proviso.
The petitioner sought to argue that the limitation period should be extended due to the COVID-19 pandemic and the subsequent Corporate Insolvency Resolution Process (CIRP) affecting the respondent company. The Court examined the timelines and noted that the extension for pandemic-related delays, as stated in the Supreme Court's judgments, was effective only until May 29, 2022. By then, the petitioner should have filed the application if it had been vigilant, as the moratorium under the IBC would not apply to the pandemic extensions post-May 29, 2022.
The High Court found that while the petitioner claimed it was affected by both the pandemic and the CIRP, it could not simultaneously benefit from both situations. The explicit limitation period under Section 34(3) is mandatory, and the Court determined that any request for condonation of delay must fall within the prescribed timelines. Ultimately, since the application was filed after the expiration of the limitation period, the Court ruled that it was time-barred. The application was dismissed with no order as to costs.
Thus, the High Court clarified the interaction between the limitation provisions of the Arbitration and Conciliation Act and the implications of the pandemic and IBC moratorium, reiterating the necessity for litigants to act diligently within established timeframes.
Subscribers can access the Case, including Case Analysis, Ratio Decidendi, Headnotes, Briefs, Case Research, Cited Case Laws, Case Law Cross-references, and the latest updates on Statutes, Notifications, Circulars, Guidelines Press Release and more.
Click on the Citation/Link to access these resources
Comments