GITAM Deemed to be University

GITAM School of Law

A Study on Appeals under the Arbitration and

Conciliation Act, 1996

Submitted by:
Madhuri Arjilli
BBA LLB Hons.
Reg. no: 122033201029
Course code: SOL5B605
Semester VI
Batch 2020-2025

Under the guidance of:

Mr. Vardhman S Panwar
Assistant Professor,
GITAM School of Law

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 DECLARATION

I hereby declare that I am submitting this project, entitled: A Study on Appeals under the
Arbitration and Conciliation Act, 1996 in the partial fulfilment of the requirement for our
academic study.

The matter embodied in this project report has not been submitted to any other University or
Institution for any award of degree. This project is an original work and it has not been
presented earlier in any manner. This information is purely academic interest.

Date 31/03/2023
Signature
Madhuri Arjilli
BBA LLB Hons.
Semester VI
GITAM School of Law

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 ACKNOWLEDGEMENTS

The completion of this project is only possible because of the kind support and guidance from
many individuals. I take this opportunity to express our sincere gratitude to all of them.

I extend my heartfelt gratitude and respect to Mr Vardhman S Panwar for providing us with
the opportunity to do this project and for his guidance which made me complete the project
duly. Thank you, sir, for always being supportive.

Working on this project helped me improve my research skills, and I am really grateful to them.

I also take this opportunity to thank my friends Neeraja and Charan who helped me a lot in
finalizing this project within the limited time frame.

With gratitude,
Madhuri

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 INDEX

Introduction ................................................................................................................................ 5

Provision for Appeal under the Arbitration and Conciliation Act ............................................ 5

Determination of Limitation Period of 120 Days ..................................................................... 6

Is the 120 days Limitation Period a settled position .................................................................. 8

Jurisdiction of the Arbitration Tribunal .................................................................................... 9

Conclusion ............................................................................................................................... 10

Bibliography ............................................................................................................................ 11

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Introduction

The quick settlement of disputes is one of the stated goals of the Arbitration and Conciliation
Act, 1996. The Parliament has twice amended the Arbitration Act, 1996 in 2016 and 2019,
introducing provisions that, among other things, set forth a time limit for the conclusion of the
arbitral proceedings, the beginning of the arbitral proceedings within 90 days of the date of the
interim order issued by the court, a limited scope for judicial inquiry, and a role for the court at
the stage of arbitrator appointment.

In furtherance of the aforementioned objective, the request to set aside an arbitral award must
be lodged within three months of receiving the award, according to Section 34(3) of the
Arbitration Act of 1996. If the applicant was prohibited from making the application within
three months for "sufficient cause," the proviso of Section 34(3) grants the Court a limited
discretion to grant the application within a further window of 30 days.

In the event that the court declines to set aside the arbitral judgement pursuant to Section 34,
an appeal may be filed under Section 37 of the Arbitration Act, 1996. However, the Act does
not specify a deadline for submitting an appeal under Section 37, in contrast to the three months
plus 30 days allowed under Section 34. Articles 116 and 117 of the Limitation Act, 1963 require
appeals under Section 37 to be filed within 90 days or 30 days, depending on whether the
appeal is from any other court to a High Court or an intra-High Court appeal, respectively. This
is because the Limitation Act, 1963 is applicable to arbitrations and court proceedings by virtue
of Section 43 of the Arbitration Act, 1996. Moreover, the Commercial Courts Act, 2015 Section
13(1A) specifies a 60-day limitation time for appeals filed under Section 37 of the Arbitration
Act.

This paper aims to provide an understanding of the concept of Appeals under section 37 of the
Arbitration and Conciliation Act, 1966 and examine the grey areas associated with this subject.
An attempt has been made to analyse whether to condone or not to condone the delay beyond
120 days in matters of appeals in arbitration.

Provision for Appeal under the Arbitration and Conciliation Act, 1996

An appeal procedure is included in Section 37 of the Arbitration and Conciliation Act of 1996.
The following orders of the Court are appealable:

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 • Granting or refusing to grant the interim measures requested under Section 9 of the Act
• An arbitral award set aside or refused to be set aside in accordance with Section 34 of
the Act.
• The Amendment Act broadened the Act's appeals process. The awarding decision of the
arbitral panel shall also be subject to judicial review.
• accepting the plea referred to in subsections (2) or (3) of section 16 that might be used
to contest the authority or range of the arbitral tribunal's authority.
• Granting or refusing to grant interim measures under Section 17 or not.

Nothing in section 37(3) alters or eliminates the ability to appeal to the Supreme Court. No
second appeal must be allowed from an order entered in an appeal under section 37(3). This
simply indicates that, in accordance with the appellate jurisdiction rules of the Arbitration Act,
if the first appeal is dismissed, a second appeal contesting the same order cannot be filed in the
same court.

But, Section 37 does not prevent a challenge of a decision by any other appellate court by filing
an appeal with the Supreme Court. Nonetheless, it should be noted that this section makes no
reference to a deadline for such appeals. Additionally, it is uncertain if the Arbitration Act will
be covered by the Limitation Act of 1963. The statute of limitations for appeals under section
37 is, therefore, ambiguous.

Determination of Limitation Period of 120 days

Position in High Courts

In the case of Oil and Natural Gas Corporation Ltd. v. Jagson International Ltd. (2005)1, the
Bombay High Court stated that "the Legislature has chosen not to impose any time of
limitation," despite granting an appeal under Section 37. This makes it clear that the Court will
not be justified in importing a limitation period as given under section 34 for submitting an
application to set aside an award and applying it to an appeal filed in accordance with Section
37. Hence, the time limit for filing an appeal under Section 37 is not specified in the Limitation
Act, and it was determined that the time limit for appeals under Part 34 would not apply to
appeals under Section 37.

1
AIR 2005 Bom 335

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Furthermore, it was found that the Limitation Act of 1963 didn't include a clause defining a
limitation term for submitting an appeal under Section 37.

The Bombay High Court re-examined the Jagson decision in Oil & Natural Gas Corporation
Ltd v. M/s Dynamic Corporation (2012)2. The Court declared that the judgement in the Jagson
case was flawed because it was founded on erroneous assumptions and that Sections 29 of the
Limitation Act of 1963 and Section 43 of the Arbitration & Conciliation Act of 1996 were not
taken into consideration when making the judgement.

In this instance, an appeal was filed in opposition to a High Court decision that nullified an
arbitral award in accordance with Section 34. The Court determined that the limitation period
for appeals under Section 37 would be 30 days and that they would be governed by Section
117 of the Limitation Act.

The Rajasthan High Court held in Shivraj Singh v. Shri Ram Transport Finance Co Ltd3 that
the statute of limitations for initiating an appeal against a decision granting or refusing
temporary relief is 90 days from the date of the decree (2013) and that appeals will be time-
barred if they are filed after the limitation period has gone.

The Meghalaya High Court determined that appeals under Article 37 of the Arbitration Act are
covered by clause (a) of Article 116 of the Schedule to the Limitation Act in North Eastern
Electric Power Corporation Ltd v. M/s Patel Unity Joint Venture (PUJV) (2017).4

Different High Courts have set varying appeals restriction times in their rulings, and Section
37 of the Arbitration Act does not set a fixed appeals limitation period. Thus, there is still some
confusion regarding appeals made in accordance with Section 37 of the Arbitration Act.

Position in the Supreme Court

In the case of M/s Consolidated Engineering Enterprises v. The Principal Secretary (Irrigation
Department) & Ors.5, the Supreme Court decided that, unless specifically excluded by the
Arbitration Act, the terms of limitation for appeals under Section 37 of the Arbitration &
Conciliation Act, 1996, would be governed by Article 116 of the Limitation Act, which

2
APPEAL (L) NO. 390 OF 2011 in ARBITRATION PETITION NO. 153 OF 2008
3
S.B. Civil Misc. Appeal No.5047/2012
4
MC (ARB.A) No.3/2017
5
Appeal (civil) 2461 of 2008

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establishes a 90-day limitation period for appeals to the High Court under the Code of Civil
Procedure 1908.

The Supreme Court in Union of India v. M/s Varindera Const. Ltd. (2018)6 ruled the 120-day
limitation period under Section 37 of the Act by comparing it to the limitation period allowed
under Section 34. The Court reasoned that since a Section 34 application must be submitted
within 120 days, including the grace period of 30 days, "the same procedure should apply to
an appeal submitted from the same action under Section 37."

In M/s N.V. International v. The State of Assam & Ors (2019)7, upholding the 120-day limitation
period for appeals under Section 37 of the Act, the Supreme Court said: "We may only add that
what we have done in the aforesaid judgement. That is to add to the period of 90 days, which
is provided by statute for filing of an appeal under Section 37 of the Arbitration Act, a grace
period of 30 days under Section 5 of the Limitation Act, as well.”

Is the 120-day limitation period a settled position?

Even after the N.V. International Case, there was no consistency in the restriction period. The
issues observed in this case are as follows:

• Would intra-court appeals also be governed by the ruling?

• Would it also cover appeals from commercial court judgements issued in accordance
with Sections 9 and 34 of the Arbitration Act?

The ruling in this case was overridden by the Supreme Court in Executive Engineer v. Borse
Brothers Engineers & Contractors Pvt. Ltd. (2021)8. It explained the matter of the limitation
period under section 37 of the Arbitration Act and has established the following deadline for
filing an appeal:

• The Arbitration & Conciliation Act, 1996 will be interpreted in conjunction with Article
116 of the Limitation Act, 1963and the limitation period shall be 90 days if the claim
amount is less than three lakh rupees.

6
Petition(s) for Special Leave to Appeal (C) No(s). 23155/2013
7
CIVIL APPEAL NO. 9244 OF 2019 (Arising out of SLP (C) No. 23808/2019)
8
CIVIL APPEAL NO. 995 OF 2021 (@ SLP (CIVIL) No.665 of 2021)

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 • The Arbitration & Conciliation Act, 1996 shall be read in connection with Article 117
of the Limitation Act, 1963, and the limitation period will be 30 days in the instance of
an intra-court appeal when the claim amount is less than three lakh rupees.
• The Arbitration & Conciliation Act, 1996 shall be interpreted in conjunction with
Section 13(1A) of the Commercial Courts Act, 2015, and the statute of limitations will
be 60 days for both inter-court and intra-court appeals if the claim amount exceeds three
lakh rupees.

The Court further indicated that delays would only be accepted in exceptional situations where
the parties engaged in honest and good faith behaviour rather than negligence. It further
declared that this ruling would only be effective going forward. The legislation regarding the
appeals limitation time under Section 37 of the Arbitration Act has now been completely
explained by the Supreme Court as a result of this ruling.

Jurisdiction of the Arbitration Tribunals

The claim that an arbitral tribunal has statutory authority is untrue. The tribunal decides on its
jurisdiction in order to serve the interests of the parties. The arbitral agreement is principally
responsible for determining the arbitral tribunal’s jurisdiction.

The fundamental idea behind party autonomy is that when two parties have the capacity to
settle their disputes amicably, they also have the capacity to show that capacity to any third
party, enabling the dispute to be settled openly. So, a well-written agreement is essential since
it allows the tribunal full ability to make decisions regarding matters relevant to the jurisdiction.

The authority to decide specific issues is expressly mentioned in Section 17 of the Arbitration
and Conciliation Act of 1996, i.e., the Appointment of a guardian for a person of incompetent
mental capacity or a child throughout the arbitration procedure and Protection, security,
confinement, or a temporary injunction on the subject matter of the arbitration.

In some situations, the arbitral tribunal’s competence is conditional on obtaining answers to

inquiries.

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Conclusion

The Supreme Court's ruling in the Borse Brothers case clarified Section 37 appeals' murky
status. The Court emphasised the purpose of the Commercial Courts Act and the Arbitration
Act by stating, "Given the object sought to be achieved under both the Commercial Courts Act
and the Arbitration Act, namely the speedy resolution of disputes, the expression "sufficient
cause" is not elastic enough to cover long delays beyond the period provided by the appeal
provision itself."

India needs to strengthen out-of-court settlements due to the backlog of cases. These
agreements offer some benefits in terms of litigation as well. Despite numerous occasions
where their efficacy has been questioned, they are nevertheless seen as a secondary alternative
for resolving disputes. The awards made as a result of these proceedings are, therefore, null
and invalid.

Arbitration is an alternative to litigation for resolving disputes. Even binding arbitration is

becoming more widely accepted as a component of the legal system. Arbitral decisions are
contested when it comes to enforcement, nevertheless.

The Arbitration and Conciliation Act has undergone numerous revisions to reflect recent
events. Recently, the primary Act of 1996 underwent revisions to bring it into compliance with
current international arbitration law. Two significant amendments were adopted by virtue of
the amending Act of 2021, producing a number of problems and queries.

The most recent change to the Act added that an unconditional stay would be issued over an
arbitral award if the court discovers prima facie evidence of fraud and corruption, which will
restrict arbitral awards. Dealing with such challenges can result in a variety of other problems.
On the other hand, removing the Eighth Schedule gives international arbitrators various
chances to practise arbitration in India under UNCITRAL Model Laws.

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 BIBLIOGRAPHY

Statutes
1. The Arbitration and Conciliation Act, 1996
2. The Limitation Act, 1963

Book(s)
1. Avtar Singh, Arbitration & Conciliation and Alternative Dispute Resolution Systems (12th
Edition, Eastern Book Company)

Other sources
1. A Study of Appeals under Arbitration and Conciliation Act, 1996 Law Insider India,
https://www.lawinsider.in/columns/a-study-of-appeals-under-arbitration-and-
conciliation-act-1996 (last visited Mar 31, 2023)

2. Appeal Under Section 37 of the Arbitration and Conciliation Act, 1996 - To Condone
or Not to Condone Delay Beyond 120 Days, that was the Question! SCC Blog,
https://www.scconline.com/blog/post/2021/08/30/appeal-under-section-37-of-the-
arbitration-and-conciliation-act-1996-to-condone-or-not-to-condone-delay-beyond-
120-days-that-was-the-question/ (last visited Mar 31, 2023)

3. 10 Landmark Judgments On Arbitration By Supreme Court Of India In The Year 2019

- Trials & Appeals & Compensation - India, https://www.mondaq.com/india/trials-amp-
appeals-amp-compensation/880718/10-landmark-judgments-on-arbitration-by-
supreme-court-of-india-in-the-year-2019 (last visited Mar 31, 2023)

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