Delhi High Court on Computing Limitation Period under Section 34(3)

 

In Prime Interglobe Pvt Ltd v. Super Milk Products Pvt Ltd, the Delhi High Court held that both parties can benefit from the latter part of Section 34(3) of the Arbitration and Conciliation Act when computing the limitation period for filing a petition to set aside an arbitral award. The court clarified that the statute does not limit the benefit to the party that filed the application under Section 33 for corrections or additional awards. This decision ensures fairness in the arbitration process by allowing either party to calculate the limitation period from the date of disposal of the Section 33 application, irrespective of who filed it.

Factual Background

The dispute arose after an arbitral award was issued on March 11, 2023. Subsequently, the respondent filed an application under Section 33(4) for an additional award, which was granted. Later, the petitioner sought corrections under Section 33(1), which the tribunal dismissed on May 24, 2023. When the petitioner filed its petition to challenge the award on August 22, 2023, the question of limitation arose. The respondent argued that the petitioner had delayed filing its Section 34 petition.

Submissions by the Parties

The respondent contended that only the party filing an application under Section 33 could benefit from extending the limitation period under Section 34(3). They argued that the petitioner should have filed the Section 34 petition sooner, based on the original award. The petitioner countered that the filing period was still within the allowable timeframe since it had filed its petition within 90 days after the tribunal disposed of the correction application.

Court’s Analysis

The Delhi High Court, led by Justice C. Hari Shankar, rejected the respondent's argument. The court emphasized that Section 34(3) does not restrict who can benefit from the limitation extension triggered by a Section 33 application. It held that both parties could invoke this benefit, even if they were not the ones who filed the Section 33 application. This interpretation of Section 34(3) ensures that the statute is applied uniformly, promoting equitable treatment in arbitration proceedings.

Conclusion

This ruling by the Delhi High Court reinforces the broad applicability of the limitation provisions in the Arbitration and Conciliation Act, allowing both parties the right to compute the limitation period from the disposal date of Section 33 applications. This decision is crucial for parties engaged in arbitration, as it clarifies how limitation periods should be computed, providing both parties with more flexibility in challenging arbitral awards.

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