Sec.17 of Limitation Act contrary to ‘unbreakability’ principle enshrined u/s 34 of Arbitration Act

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Sec.17 of Limitation Act contrary to ‘unbreakability’ principle enshrined u/s 34 of Arbitration Act
SC sets aside Andhra Pradesh HC order, thereby disallows condonation of delay to the Respondents seeking rescue u/s 17 of the Limitation Act, 1963 (‘the Act’) beyond the period prescribed u/s 34(3) of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’);

Notes that the Trial Court, instead of examining applicability of Sec. 17 of the Act to an application filed u/s 34 of the Arbitration Act (while dismissing the request for condonation of delay beyond 3 months and 30 days), remanded the matter; Takes note of Respondents’ assertion that there is no express exclusion of Sec. 17 in the Arbitration Act and thus its benefit ought to be extended while determining period of limitation u/s 34(3), peruses the phrase, “express exclusion by special/ local law” u/s 29(2) of the Act in this regard; Observes that the words ‘may not’ used in Sec. 34(3) of the Arbitration Act, which provides that “an application for setting aside may not be made after three months have elapsed”, should be interpreted as ‘cannot’ in view of the intention of limiting  the time during which an award may be challenged; Further opines that the language of Sec. 34(3) tantamounts to an “express exclusion” of Sec. 17 of Limitation Act, as the phrase “but not thereafter” used therein clearly reveals the legislative intent of fixing  an outer boundary period for challenging an award; States that Sec. 17 of the Act is inconsistent with scheme and object of the Arbitration Act, as it “would defeat the Arbitration Act’s objective of speedy resolution of disputes. The finality of award would also be in a limbo as a party can challenge an award even after the 120 day period”; Rules that “extending Section 17 of the Limitation Act would go contrary to the principle of ‘unbreakability’ enshrined under Section 34(3) of the Arbitration Act”; Elucidates that even if Sec. 17 were to be extended to Sec. 34 of the Arbitration Act, it would not address the Respondent’s grievance, as it doesn’t defer the starting point of the limitation period, given that the Appellants have committed fraud, and that it doesn’t encompass all kinds of frauds and mistakes; Lastly, on noting that application u/s 34(3) is based on the award and not fraud, holds that “once the party has received the Award, the limitation period u/s 34(3) of the Arbitration Act commences. Sec. 17 of the Limitation Act would not come to the rescue of such objecting party:SC
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