Whether while adjudicating objections under Section 34 of Arbitration and Conciliation Act, 1996 to an award passed, an adjudication upon the issue of limitation would preclude the adjudication on merits – Omaxe Ltd. Vs. Joginder Singh Nijjar – Delhi High Court
July 28, 2023
Hon’ble High Court held that:
(i) Even though the power to condone the delay is conferred upon the Courts, the condonation under Section 34 (3) of the Act, 1996 cannot be granted liberally as the same would defeat the very purpose of the enactment of the Act, 1996, that is, the expeditious resolution of disputes. It is also significant to see that even the objective of the law of limitation is to prevent the outdated, fictitious, or fraudulent claims while also requiring a person to exercise his rights to action within the prescribed time.
(ii) Hence, with regard to the first question, it is evident that the law remains settled that adjudging the question of limitation would preclude the adjudication of objections to an arbitral award on merits. It is also evident that the majority view taken is that delay, qua Section 34 of the Act, 1996, may not be condoned in a routine manner. There is a stricter view in this regard. Accordingly, this Court shall consider the issue of limitation.
(iii) Without a limitation/deadline, delays may be caused and uncertainty may prevail in matters arising out of arbitration processes, defeating the very purpose of the Act, 1996, that is, the expeditious resolution of disputes. The limitation period protects the finality of the Award, once the limitation period has passed, by binding the parties by a timeline for filing any claims relating to the Award.
