Limitation under Section 34 of Arbitration Act runs from the date of disposal of Section 33 request, SC

The Supreme Court yesterday clarified that when a party to arbitral proceedings has filed an application under Section 33 of the Arbitration and Conciliation Act, 1996, for correction and interpretation of an arbitral award, then the period of limitation provided under Section 34 of the Act for challenging an arbitral award would start from the date of disposal of the Section 33 application. This disposal can be either by allowing or rejecting the application..The order was passed by Justices Rohinton Nariman and Indu Malhotra in the case of M/s Ved Prakash Mittal & Sons v. Union of India, challenging a judgment passed by Delhi High Court..In this context, the Court also ruled that the judgment of a Single Judge of the Bombay High Court in the case of Amit Suryakant Lunavat vs. Kotak Securities, Mumbai [2010(6) Mh.L.J. 764] does not reflect the correct law..Section 33 of the Act provides for correction and interpretation of an arbitral award..Section 34(3) of the Act lays down that “an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award, or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal.”.In the present case, an Arbitral Award was delivered on October 30, 2015, and received by the respondent on November 7, 2015. An application to correct the said Award was made by the respondent on November 16, 2015. It was dismissed by the Arbitrator on December 14, 2015..On March 11, 2016, objections and application objecting to the Award was filed under Section 34 of the Act by the respondent. The question which arose was whether the aforesaid Section 34 application was within the time mentioned in Section 34(3) of the Act..The Additional District Judge found that the application was time-barred, reasoning that the application should have been made on and from the first date as, in fact, there was no correction made to the Award..On appeal, the Delhi High Court reversed the order of the Additional District Judge stating that as the Section 33 application had been disposed of only on December 14, 2015, the period mentioned in Section 34(3) would start running only from then, in which case, the Section 34 application could be said to be within time..This was then challenged in the Supreme Court..The petitioners, in this case, had contended that if an application under Section 33 of the Act is filed for correction of an arbitral award, a new limitation period from the date of disposal of such an application would not run if such an application was rejected by the arbitrator without making any modification/ correction..In other words, the benefit of fresh commencement of limitation as provided in Section 34(3) of the Act can be taken only if the arbitral award is modified and/ or corrected and not otherwise..It was the petitioner’s argument that the expression “disposed” which is mentioned in Section 34(3) would have to be read in consonance with and in harmony with Section 33. So read, this would only mean where some positive step has, in fact, taken place under Section 33 and the Award is either corrected or modified. This could not possibly refer to an Award which is not ultimately corrected or modified and the application under Section 33 is merely dismissed. For this, the petitioner had relied upon the judgment of a Single Judge of the Bombay High Court in the case of Amit Suryakant Lunavat vs. Kotak Securities, Mumbai..The petitioners had also placed reliance on the case of State of Arunachal Pradesh v. M/S Damini Construction [2007(3) SCALE 576] in which it was held that a court before holding that the limitation period commences from the date of disposal of Section 33 application has to ensure that the application which is filed is actually one within the scope of Section 33 of the Act and that an application under the garb of Section 33 of the Act in the nature of review would not extend the limitation under Section 34 of the Act..The respondents, on the other hand, had contended that in case a Section 33 request is made, the limitation under Section 34(3) would run from the date the request under Section 33 is disposed of. This would be irrespective of the outcome of the Section 33 request..The contention of the petitioner that if such a request is rejected, the limitation would fall back to the date of receipt of the award runs contrary to the unambiguous provision in the Act, the respondent had stated..In a short 4-page order, the Supreme Court made it clear that the decision of the Bombay High Court in Amit Suryakant Lunavat does not reflect the correct position in law. It ruled that disposal” of the application can be either by allowing it or dismissing it..“We are of the view that the judgment of the Bombay High Court does not reflect the correct position in law. Section 34(3) specifically speaks of the date on which a request under Section 33 has been “disposed of” by the Arbitral Tribunal. .We are also of the view that a “disposal” of the application can be either by allowing it or dismissing it.”.It, therefore, dismissed the appeal..Advocate Piyush Kalra appeared for the petitioner. Advocates Saurav Agrawal, Sahil Tagotra, and Satywan Shekhawat represented the respondent..Read the order below.