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Article 137 of Limitation Act to govern the Limitation period for execution of Foreign Award

The Hon’ble Supreme Court of India in the case of Government of India Vs. Vedanta Ltd [Civil Appeal No. 3185 of 2020] allowed the enforcement of 2011 foreign award passed in favour of Vedanta Limited and held that limitation period for filling execution of a foreign award u/s 47 & 49 of Arbitration and Conciliation Act will be governed by Article 137 of the Limitation Act,1963.

The 3-judge bench comprising of Hon’ble Justices S. Abdul Nazeer, Indu Malhotra and Aniruddha Bose upheld a foreign arbitration award in favour of Vedanta and Videocon for the development of the Ravva Oil and Gas Field off the coast of Andhra Pradesh. The Hon’ble court examined judgements of various High Courts regarding the period of limitation for filing a petition for enforcement of a foreign award under the 1996 Act.

It was further observed by the Hon’ble Court that The application under Sections 47 and 49 for enforcement of the foreign award, is a substantive petition filed under the Arbitration Act, 1996. It is a well settled position that the Arbitration Act is a self-contained code.26 The application under Section 47 is not an application filed under any of the provisions of Order XXI of the CPC, 1908. The application is filed before the appropriate High Court for enforcement, which would take recourse to the provisions of Order XXI of the CPC only for the purposes of execution of the foreign award as a deemed decree. The bar contained in Section 5, which excludes an application filed under any of the provisions of Order XXI of the CPC, would not be applicable to a substantive petition filed under the Arbitration Act, 1996. Consequently, a party may file an application under Section 5 for condonation of delay, if required in the facts and circumstances of the case.”

Further, the Hon’ble Court expounded that In view of the aforesaid discussion, we hold that the period of limitation for filing a petition for enforcement of a foreign award under Sections 47 and 49, would be governed by Article 137 of the Limitation Act, 1963 which prescribes a period of three years from when the right to apply accrues.”

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