The Jammu and Kashmir High Court has ruled that the limitation period for challenging an arbitral award begins only after the party receives a signed copy of the award. The court emphasized that the delivery of a signed copy is a mandatory requirement under the Arbitration and Conciliation Act, 1996.

In this case, the petitioner had not received the certified copy of the arbitral award dated March 1, 2024, because the arbitrator exercised powers under Section 39 of the Act to withhold the award due to unpaid fees. The signed copy was eventually delivered on October 18, 2024, after the outstanding payment was cleared.

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Justice Sanjay Dhar clarified the difference between making an award and delivering an award under the Act:

• Making an Award: This refers to when the tribunal finalizes its decision and the award is signed by the arbitrator.
• Delivering an Award: This happens when the signed award is formally handed over to the parties, as required under Section 31(5) of the Act.

The court stated that only after the signed copy is delivered can the limitation period for challenging the award begin.

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The court rejected the argument that a delay in paying arbitrator fees should affect the calculation of the limitation period.

"Merely because a party defaulted in making payment to the arbitrator for a few months, the same cannot alter the situation in favour of the respondent."

The court also highlighted that under Section 38 of the Act, the respondent had the option to pay the petitioner’s share of the arbitrator's fees to avoid delays.

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"It was open to the respondent to pay the share of the payment which was due from the petitioner to prevent delay."

Since the respondent was not left without legal remedies, the court concluded that the petitioner was still within the limitation period to challenge the award.

Case Background

The petitioner filed a challenge against the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. The respondent objected to the petition, arguing that it was filed beyond the permissible limitation period.

The delay occurred because the arbitrator, invoking Section 39 of the Act, withheld the award until the petitioner cleared outstanding fees. As a result, the petitioner could only obtain the signed copy on October 18, 2024, leading to a delay in filing the challenge.

The High Court ultimately ruled in favor of the petitioner, affirming that the limitation period starts from the date the signed copy is delivered.

APPEARANCE

Syed Musaib, Dy.AG for Petitioners

Showkat Ali Khan, Advocate for Respondent

Case-Title: Chief Engineer PW(R&B) Department and another vs M/s Abdul Salam Mir, 2025