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If an application under Section 34 of the A&C Act is made within the applicable time frame, Section 5 Limitation Act application is not necessary: Orissa High Court

In the case of Faridabad Gurgaon Minerals versus Orissa Mining Corporation Ltd. (Dated: 03.08.2022), according to the Orissa High Court, since both the prescribed and the extended periods are stipulated in Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act), it is not necessary to file a separate application for the condonation of a delay in filing an application to set aside an arbitral award under Section 34 of the A&C Act. The Supreme Court in the case of State of Bihar versus Bihar Rajya Bhumi Vikas Bank Samiti (2018) declared the law and interpreted the provisions of Section 34 (5) of the A&C Act, which requires a party to give the other party prior notice before filing an application to set aside an arbitral award, as being directory in nature and not mandatory. This was the conclusion reached by the Single Bench of Justice Arindam Sinha. Because it is a declaration on the identification of the proper concept, the High Court decided that the law as expressed by the Supreme Court applies retroactively.

Facts: An arbitral award was made against the respondent Orissa Mining Corporation Ltd., who then appealed the decision by submitting an application to the District Judge under Section 34 of the A&C Act. The respondent’s plea under Section 34 of the A&C Act was entertained by the District Court, which was challenged by the petitioner/award holder Faridabad Gurgaon Minerals in a writ suit filed before the Orissa High Court. The petitioner continued that the respondent had withdrawn the initial application it had filed and had filed a new application under Section 34 to set aside the arbitral award because it had filed an application to set aside the arbitral award without complying with the requirement under Section 34 (5) of the A&C Act of providing a prior notice to the petitioner/award holder. The petitioner argued that the application filed by the respondent was unmaintainable since the delay in filing the new application under Section 34 to set aside the arbitral award was past the time period as stated under Section 34(3) of the A&C Act. As a result, the petitioner argued that the lower court had violated its own rules by considering the respondent’s newly submitted application.

Judgement: The Supreme Court declared the law and interpreted Section 34 (5) of the A&C Act as being directory in the case of State of Bihar v. Bihar Rajya Bhumi Vikas Bank Samiti (2018), the court ruled. As a result, the law as stated by the Supreme Court is retroactive because it is a declaration on the discovery of the correct principle. As a result, the Court determined that the challenge to the maintainability of the application filed by the respondent under Section 34 of the A&C by the petitioner was unlikely to succeed given the retrospective application of the law stated by the Apex Court in the State of Bihar versus Bihar Rajya Bhumi Vikas Bank Samiti (2018) case, and that there was therefore no need for the respondent to have withdrawn the application originally filed by it under Section 34. Thus, the Court upheld the application that the respondent had originally made in accordance with Section 34 of the A&C Act and excused the longer-than-required filing delay.

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JUDGEMENT REVIEWED BY SNIGDHA DUBEY

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