Eagle Fashions vs Due Esse di Salvatore Suppa and Another

Rajiv Sahai Endlaw, J.—The arbitration suit was registered on receipt in this Court of letter dated 12th August, 1999 of the Indian Council of Arbitration enclosing therewith the original arbitral award dated 9th March, 1994 alongwith the arbitral record. Vide order dated 1st September, 1999 the notice of the filing of the award was ordered to be issued to the respondent, the counsel for the petitioner having appeared before the court on that date and having accepted notice on behalf of the petitioner. The arbitral award is in the sum of USD 66,293.92 (Rs. 19,22,528.92) with pendente lite interest at 15% per annum on the principal amount and costs of arbitration, in favour of the petitioner and against the respondent. The petitioner did not challenge the award. The respondent has filed IA. No. 5394/2006 under Sections 30 and 33 of the Arbitration Act 1940 challenging the award.

The respondent in its objections has, inter alia, pleaded that the proceedings are barred by limitation. The petitioner filed a reply to the said objections and in which it is stated that the petitioner had filed a petition under Sections 14, 17 and 29 of the Arbitration Act, 1940 for filing of the arbitral award in the court and for making the same rule of the court. A copy of the said petition stated to have been filed by the petitioner is filed as annexure "A" to the said reply. The said petition is dated 10th July, 1998. It is further the stand of the petitioner in the said reply that the petitioner after making of the said award had attempted to enforce the same in the courts at Italy, to which country the respondent belongs, but the respondent objected to the jurisdiction of the Italian Court and thus the petitioner was left with no option but to approach this Court under Sections 14 and 17 of the Arbitration Act, 1940 for making the award rule of the court.

On the pleadings of the parties the usual issues were framed on 20th March, 2007 and the parties directed to file evidence in the form of affidavits. The respondent has filed affidavit by way of evidence. No affidavit was filed by the petitioner. On 26th September, 2008 the counsel for the petitioner stated that she had not received any instruction from the petitioner inspite of registered notices; in the circumstances the suit was adjourned to 25th November, 2008. On 25th November, 2008 none appeared on behalf of the petitioner. However, finding that the suit had been registered on the filing of the arbitral award in the court by the arbitral tribunal itself and not on a petition under Sections 14 and 17 of the Act, inspite of failure of the petitioner to appear, the suit was held to be maintainable. The counsel for the respondent had on that date also urged that the proceedings were barred by limitation. However, since the order sheet of the suit showed that the same had been registered on receipt of arbitral award and not on a petition, notwithstanding the petitioner in its reply to the objections of the respondent having stated so, it was felt that the proceedings were maintainable even in the absence of the petitioner. On the request of the counsel for the respondent the registry was directed to report whether the petition under Sections 14 and 17 of the Act as claimed by the petitioner had been registered separately and/or had been filed. The suit was listed thereafter on 16th March, 2009 and 13th July, 2009 on which dates also none appeared for the petitioner. The registry has reported that no petition under Sections 14 and 17 of the Act as claimed by the petitioner to have been filed, had in fact been filed.

Today also none has appeared for the petitioner. During the course of hearing the counsel for the respondent on objections preferred by it, it has come to notice that in the letter dated 12th August, 1999 of the Indian Council of Arbitration, on receipt whereof this suit was registered it is stated

As requested by the claimant, I hereby file the original award dated 9th March, 1994 made by the Sole-Arbitrator together with proceedings and documents, under Sections 14 and 17 of the Arbitration Act and under the authority conferred in the award on the Registrar of the Indian Council of Arbitration, in accordance with Rule 67 (c) of the Rules of Arbitration of the Council, as per index enclosed.

Before the arbitral tribunal the petitioner was the claimant.

It thus transpires that the award though filed by the arbitrator has been so filed on the request of the petitioner. As far as the said letter refers to the authority conferred by the award, the award in the last paragraph thereof authorizes the Registrar to cause the award to be filed "at the request of either of the parties".

Article 119(a) of the Schedule to the Limitation prescribes the limitation for filing of an application under the Arbitration Act 1940, for the filing in court of an award, as 30 days, commencing from the date of service of the notice of the making of the award.

From the reply of the petitioner to the objections it is clear that the petitioner was served with the notice of the making of the award, soon after the making of the award - the petitioner immediately thereafter initiated proceedings in the court at Italy as aforesaid and only after being unsuccessful therein claimed to have approached this Court under Sections 14 and 17 of the Act. In the petition u/s 14 and 17 of the Act, which the petitioner claims to have filed, it is mentioned that the petitioner learnt of making of the award vide letter dated 11th March, 1994 of the Indian Council of Arbitration and had thereafter been requesting the said council to file the award in court and which had not been done. The petition even if any filed by the petitioner on or about 10th July, 1998, for filing of the award dated 9th March, 1994 in the court would have been barred by time.

It is settled law that no time is prescribed for the arbitral tribunal to file the award in the court. However, the law with respect to such filing by the arbitrator/arbitral tribunal at the instance asking of one of the parties, as clearly borne out from the letter dated 12th August, 1999 (supra) of the Indian Council of Arbitration, is no longer res intergra.

The Supreme Court in Patel Motibhai Naranbhai and another Vs. Dinubhai Motibhai Patel and others, has held that a party to an arbitration, faced with a situation that an application for filing the award in court u/s 14 of the Arbitration Act, 1940 has become barred by Limitation, cannot be permitted to induce the arbitrator to make the application for filing of the award. It was held that a party with the help of the arbitrator cannot be permitted to do indirectly what he could not have done directly. It was further held that the law could not be allowed to be circumvented in this fashion. The Supreme Court declined to entertain the application moved by the arbitrator, in that case nearly six years after making of the award. It was further held that the court should not come to the aid of a party where there has been an unwarrantable delay in seeking the statutory remedy - any remedy must be sought with reasonable promptitude having regard to the circumstances.

This Court also in Union of India (UOI) Vs. Rajesh Kumar Pradeep Kumar, has held that where the award is filed in the court by the arbitrator not suo moto but at the instance of a party to arbitration agreement, Article 119(a) would apply and the award if filed beyond 30 days period will be bared by limitation. The same view has been recorded recently in Union of India (UOI) Vs. Chadha Engg. Works, wherealso finding from the language of the forwarding letter that the award was filed in the court at the request of the petitioner, the filing of the award was held not to be by the arbitrator on his own so as to save the period of limitation prescribed in Article 119(a) and held to be barred by time.

In the present case also the filing of the award by the arbitral tribunal at the instance of the petitioner is after the unusually long time of five years from the date of the making of the award and this Court has no option but to hold the same to be barred by limitation.

The objection of the respondent of limitation having succeeded, it is not deemed necessary to deal with the other objections, specially as the petitioner has not been appearing. Resultantly, it is held that the award having been filed in this Court beyond the prescribed limitation, the relief of making the award a rule of the court or passing judgment/decree in terms thereof is barred by time. The suit is thus dismissed. However, in the circumstances, the parties are left to hear their own costs.