Email Delivery Of Scanned Signed Arbitral Award Starts Limitation For Challenge: Delhi High Court

The Delhi High Court on 7 July held that an arbitrator's email transmitting a scanned signed copy of an arbitral award amounts to valid delivery under Section 31(5) of the Arbitration and Conciliation Act, 1996 and starts the limitation period for challenging the award under Section 34.

Justice Om Prakash Shukla dismissed a petition by the Chief Engineer, Employees' State Insurance Corporation (ESIC), challenging an arbitral award dated 19 August 2023 in favour of Enarch Consultants as time-barred, noting that limitation began on 21 August 2023, when the sole arbitrator emailed the scanned signed copy to the parties and their counsel. He held:

“... limitation under Section 34(3) commenced … when the scanned signed copy of the Arbitral Award was delivered by the learned Sole Arbitrator in compliance with Section 31(5) of the Act.

Once the commencement of limitation is determined, the consequences under Section 34(3) follow inexorably. The period of three months prescribed by the statute, together with the further period of thirty days contemplated by the proviso, constitutes the maximum period within which the Court is empowered to entertain a petition under Section 34. Beyond the said period, the jurisdiction of the Court itself stands exhausted.”

The dispute arose from ESIC's petition under Section 34 (which allows a party to challenge an arbitral award) against the award passed in favour of Enarch Consultants, along with an application seeking condonation of a delay of 22 days.

Advocate Sonal Kumar Singh, appearing for Enarch Consultants, argued that the petition was not merely delayed but barred by Section 34(3), which prescribes a three-month limitation period with a further thirty-day condonable period. He submitted that limitation commenced on 21 August 2023 when the sole arbitrator emailed the scanned signed copy of the award to the parties and their counsel.

Standing Counsel Siddharth, appearing for ESIC, contended that limitation could begin only upon receipt of the award in terms of Section 31(5), which, according to him, occurred when ESIC received the hard copy on 3 January 2024. He argued that the email was sent to an officer who was not authorised to decide whether proceedings under Section 34 should be initiated.

Rejecting ESIC's contention, the Court held that Section 31(5) requires delivery of a signed copy of the award but does not prescribe any particular mode of delivery. It observed that the provision does not require an arbitrator to send the award only through physical dispatch or provide a certified hard copy.

It further noted that the sole arbitrator had transmitted the scanned signed copy through the same electronic mode used during the arbitration proceedings and that ESIC had not disputed its authenticity. The email also expressly stated that the award was being transmitted in compliance with Section 31(5) and was addressed to an ESIC official as well as the advocates representing both parties.

Therefore, the Court rejected ESIC's argument that limitation would begin only after the award reached the officer authorised to approve litigation. It held that Section 34(3) does not make the limitation period dependent on internal file movement, engagement of counsel or administrative approvals within a government organisation. It observed that ESIC had used the same email address throughout the arbitration proceedings and, having accepted electronic communication during the proceedings, could not question the validity of the same mode when the award was delivered.

Justice Shukla also held that a “litigant cannot approbate and reprobate in the same breath.” Since ESIC filed the Section 34 petition only on 25 April 2024, it had crossed the three-month limitation period as well as the additional thirty-day period that could be condoned under the proviso to Section 34(3).

Relying on Union of India v. Popular Construction Co. and My Preferred Transformation & Hospitality (P) Ltd. v. Faridabad Implements (P) Ltd., the Bench reiterated that the words “but not thereafter” in Section 34(3) exclude condonation beyond the statutory outer limit.

It also directed the Ministry of Law and Justice to constitute a high-level committee to examine delays by government bodies in challenging arbitral awards and consider departmental action against officers responsible for such delays.

Accordingly, the High Court dismissed ESIC's application for condonation of delay and the Section 34 petition as barred by limitation.