Case: DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD Vs. M/S NAVIGANT TECHNOLOGIES PVT. LTD

(i) The background facts emanate from a Service Level Agreement dated 02.05.2011 executed by the appellant-corporation in favour of the Respondent-company providing call centre services.Clause 13 of the Agreement provided for resolution of disputes through arbitration by a three-member tribunal, under the Arbitration and Conciliation Act, 1996.Clause 13 reads as :All matter question, disputes, differences and/or claims arising out of and/or concerning and/or in connection and/or in consequences or relating to the Contract whether or not obligations of either or both parties under the Contract be subsisting at the time of such dispute and whether or not the contract has been terminated or purported to be terminated or completed, shall be referred to the arbitration which shall be conducted by three arbitrators, one each to be nominated by the Service Provider and the Nigam (Arbitrator to be approved by the MD DHBVNL or authority of the Nigam) and the third to be named by the president of the institution of Engineers, India. If either of the parties fails to appoint its arbitrator within thirty (30) days after receipt of a notice from the other party invoking the arbitration clause, the president of the institution of Engineers, India, shall have the power at the request of either of the parties, to appoint the arbitrator. A certified copy of the order of the institution of engineers (India) making such an appointment will be furnished to each of the parties.The decision of the majority of the arbitrators shall be final and binding upon the parties. The parties to the contract agree that the cost of arbitration shall be as per instructions to the Nigam issued/prevalent on the date of appointment of arbitral tribunal. The arbitrators may, from time to time, with the consent of the parties enlarge the time for making the award. In the event of any of the aforesaid arbitrators dying, neglecting, resigning or being usable to act for any reason, it will be lawful for the party concerned to nominate another arbitrator in place of the outgoing arbitrator.The arbitrator shall have full powers to review and/or revise any decision, opinion, direction, certification or valuation of the Engineer in consonance with the Contract, and neither party shall be limited in the proceedings before such arbitrators to the evidence or arguments put before the engineer for the purpose of obtaining the said decision Subject to aforementioned provisions, the provisions of the Arbitration and Conciliation Act, 1996 and the Rules there under any statutory modifications thereof for the time being enforce, shall be deemed to apply to the Arbitration proceedings under the clause.(ii) On 16.10.2014, the appellant corporation terminated the Service Level Agreement, which led to disputes between the parties. The disputes were referred to arbitration by a three-member tribunal.(iii) The arbitral tribunal orally pronounced the award [2:1] on 27.04.2018, whereby the claims of the respondent company were allowed. The parties were informed that the third arbitrator had disagreed with the view taken by the majority of arbitrators, and would be rendering his separate opinion. A copy of the draft award was provided to the parties to point out any computation, clerical or typographical errors in the award on the next date of hearing.The proceedings of the tribunal dated 27.04.2018 read as under :Sh. Nishant Shrivastava, Advocate for the claimant with Sh. Ankur Bhatia, M.D. of the Claimant.Sh. Ashish Goyal, Advocate and Sh. Sanjeev Sharma, JE for the respondent.Vide separately recorded award dated today, claims of the claimant have been allowed with cost. Dr. Shiva Sharma has agreed with same, whereas Sh. D.S. Yadav has disagreed. He shall file his separate award. Copies free of costs, of the award have been supplied to both the Ld. Counsels for the parties. To come up on 12.05.2017, at 4:30 p.m. for award of Sh. D.S. Yadav, Arbitrator. On that date, parties are also required to show any computation error, any clerical or typographical error or any other error of similar nature occurred in the award if anyVinod Jain, D&S Judge(retd.) Presiding ArbitratorSh. Shiva Sharma, D&S Judge (retd.)Sh.D.S. Yadav, Director, DHBVN (retd.)The matter was next posted to 12.05.2018.(iv) On 12.05.2018, a copy of the dissenting opinion was provided by the third arbitrator to the parties (even though the opinion was dated 27.04.2018). The matter was then posted to 19.05.2018, for the parties to point out any typographical or clerical mistakes in the dissenting opinion delivered by the third arbitrator.The order dated 12.05.2018 reads as :Sh. Nishant Shrivastava, Advocate for the claimantSh. Sanjeev Sharma, JE for the respondent.Arbitrator Sh. D.S. Yadav has filed his own dissenting Award.Copies free of cost have been supplied to both the parties to these arbitration proceedings. Both the parties have not pointed out any computation or clerical error etc. in the award dated 27.04.2018 Now to come up on 19.05.2018 at the same venue to point out any typographical or clerical mistakes if any in the award of today given by Sh. D.S. Yadav, Arbitrator. Venue the same. Also on that date original record should be handed over to the Ld. Counsel for the claimant for safe custody with pen drives of the record to the other party as well as to the Arbitrators.(v) On 19.05.2018, the tribunal recorded that both the parties had not filed any application to point out any clerical or typographical mistakes in the award, or dissenting opinion. On this date, the signed copy of the arbitral award was provided to both the parties, and the proceedings were terminated. The proceedings of 19.05.2018 read as :Sh. Nishant Shrivastava, Advocate for the claimantSh. Ashish Goyal, Advocate withSh. Sanjeev Sharma, JE for the respondent.Original record has been handed over to Sh. Nishant Shrivastava, Advocate for its safe custody with him and for its production before the appropriate authority in case of need. Pen drives of the record have been provided to both the counsels as well as to the arbitrators. Record is comprised of two files. First file of pleadings is comprised of 270 pages and second file of awards, evidence, zimini orders and misc. papers is comprised of 596 pages. Awards (signed copies) have also been provided to Ld. Counsel for both the parties free of cost. Both the parties also not filed any applications to point out any clerical or typographical mistakes in the awards.Proceedings now come to an end, so are hereby terminated.(vi) The Appellant-corporation filed its Objections under Section 34 on 10.09.2018 before the Ld. Civil Court, Hisar, Haryana vide Arbitration Petition No. 316/2018 to challenge the award dated 27.04.2018, along with an Application for condonation of delay.It was submitted by the appellant corporation that the objections were filed within the period prescribed by Section 34(3) i.e. within 3 months and 30 days from the date of receipt of the signed award on 12.05.2018.(vii) The Civil Court dismissed the Application for condonation of delay vide Order dated 14.02.2019. It was held that the Appellant had received the majority award on 27.04.2018. Thus, the period of limitation starts running from the same date. Accordingly, the period of limitation of three months starts from 27.04.2018 i.e. the date on which the Appellant received the arbitral award. The proviso to Section 34(3) provides that if the Court is satisfied that the applicant was prevented from sufficient cause from making the application within 3 months, it may entertain the application within a further period of 30 days. In the present case, the application u/S. 34 was filed even after the expiry of the further period of 30 days. Merely because the dissenting opinion was erroneously styled as an award by the minority arbitrator, it cannot be said that the dissenting opinion attains the status of an award. Consequently, the objections were dismissed solely on the ground of delay.(viii) The appellant corporation filed Appeal No. 1954/2019 (O&M) under Section 37 of the Arbitration Act before the High Court.The High Court vide the impugned Order dated 11.12.2019 affirmed the Order passed by the Civil Court. It was held that a reading of Section 31 clearly reflects that once an award is signed and communicated by the majority of arbitrators, the same would constitute an award. The signed copy of the majority award i.e. signed by two of the three arbitrators was received on 27.04.2018, and u/S. 34(3), the objections had to be filed within 3 months, which would expire on 27.07.2018. Even if the benefit of 30 days had been granted to the Appellants, the objections ought to have been filed by 26.08.2018, whereas the objections had been filed on 10.09.2018. There was no infirmity in the judgment of the Civil Court, and accordingly, the Appeal was dismissed.(ix) Aggrieved by the rejection of the objections under Section 34 on the ground of delay, the appellant corporation has filed the present Appeal.

Reasoning: The statute recognises only one arbitral award being passed by an arbitral tribunal, which may either be a unanimous award, or an award passed by a majority in the case of a panel of members. An award is a binding decision made by the arbitrator/s on all the issues referred for adjudication. The award contains the reasons assigned by the tribunal on the adjudication of the rights and obligations of the parties arising from the underlying commercial contract. The award must be one which decides all the issues referred for arbitration. The view of a dissenting arbitrator is not an award, but his opinion. However, a party aggrieved by the award, may draw support from the reasoning and findings assigned in the dissenting opinion.Section 35 provides that an arbitral award shall be final and binding on the parties and persons claiming under them. A dissenting opinion does not determine the rights or liabilities of the parties which are enforceable under Section 36 of the Act.(v) The reference to the phrase arbitral award in Sections 34 and 36 refers to the decision of the majority of the members of the arbitral tribunal. A party cannot file a petition u/S. 34 for setting aside, or u/S. 36 for enforcement of a dissenting opinion. What is capable of being set aside u/S. 34 is the arbitral award i.e. the decision reached by the majority of members of the tribunal. Similarly, u/S. 36 what can be enforced is the arbitral award passed by the majority of the members.The statute makes it obligatory for each of the members of the tribunal to sign the award, to make it a valid award. The usage of the term shall makes it a mandatory requirement. It is not merely a ministerial act, or an empty formality which can be dispensed with.(ix) Sub-section (1) of Section 31 read with sub-section (4) makes it clear that the Act contemplates a single date on which the arbitral award is passed i.e. the date on which the signed copy of the award is delivered to the parties. Section 31 (5) enjoins upon the arbitrator / tribunal to provide the signed copy of the arbitral award to the parties. The receipt of a signed copy of the award is the date from which the period of limitation for filing objections u/S. 34 would commence.(x) In Union of India v. Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 . , a three-judge bench of this Court held that the period of limitation for filing an application u/S. 34 would commence only after a valid delivery of the award takes place u/S. 31(5) of the Act. In para 8, it was held as under :8. The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, has to be received by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings.(xi) The judgment in Tecco Trichy Engineers (supra) was followed in State of Maharashtra v. Ark Builders, (2011) 4 SCC 616 wherein this Court held that Section 31(1) obliges the members of the arbitral tribunal to make the award in writing and sign it. The legal requirement under sub-section (5) of Section 31 is the delivery of a copy of the award signed by the members of the arbitral tribunal / arbitrator, and not any copy of the award. On a harmonious construction of Section 31(5) read with Section 34(3), the period of limitation prescribed for filing objections would commence only from the date when the signed copy of the award is delivered to the party making the application for setting aside the award. If the law prescribes that a copy of the award is to be communicated, delivered, despatched, forwarded, rendered, or sent to the parties concerned in a particular way, and since the law sets a period of limitation for challenging the award in question by the aggrieved party, then the period of limitation can only commence from the date on which the award was received by the concerned party in the manner prescribed by law(xii) In State of Himachal Pradesh v Himachal Techno Engineers,this Court held that if one of the parties to the arbitration is Government, or a statutory body, which has notified holidays, and if the award was delivered to a beldar or a watchman on a holiday or non-working day, it cannot be considered to be receipt of the award by the party concerned for the purposes of Section 31(5) of the Act. When the award is delivered, or deposited, or left in the office of a party on a non-working day, the date of physical delivery is not the date of receipt of the award by that party. For the purposes of Section 31(5), the date of receipt will have to be the next working day.(xiii) Section 32 provides that the arbitral proceedings shall be terminated after the final award is passed. With the termination of the arbitral proceedings, the mandate of the arbitral tribunal terminates, and the tribunal becomes functus officio.(xiv) In an arbitral tribunal comprising of a panel of three members, if one of the members gives a dissenting opinion, it must be delivered contemporaneously on the same date as the final award, and not on a subsequent date, as the tribunal becomes functus officio upon the passing of the final award. The period for rendering the award and dissenting opinion must be within the period prescribed by Section 29A of the Act.The period of limitation for filing the objections to the award u/S. 34 commences from the date on which the party making the application has received a signed copy of the arbitral award, as required by Section 31(5) of the 1996 Act.Section 34(3) provides a specific time limit of three months from the date of receipt of the award, and a further period of thirty days, if the Court is satisfied that the party was prevented by sufficient cause from making the application within the said period, but not thereafterIn Union of India v. Popular Construction,(2001) 8 SCC 470 . this Court held that Section 5 of the Limitation Act, 1963 would not apply to applications filed under Section 34 of the Arbitration Act. It was held that :12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are but not thereafter used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase but not thereafter wholly otiose. No principle of interpretation would justify such a result.(xix) If the objections are not filed within the period prescribed by Section 34, the award holder is entitled to move for enforcement of the arbitral award as a deemed decree of the Court u/S. 36 of the Act.This Court in P. Radha Bai v. P. Ashok Kumar,(2019) 13 SCC 445 . held that :32.5. Once the time-limit or extended time-limit for challenging the arbitral award expires, the period for enforcing the award under Section 36 of the Arbitration Act commences. This is evident from the phrase where the time for making an application to set aside the arbitral award under Section 34 has expired. [36. Enforcement.—Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.(emphasis supplied)] There is an integral nexus between the period prescribed under Section 34(3) to challenge the award and the commencement of the enforcement period under Section 36 to execute the award.36.2. Second, extending Section 17 of the Limitation Act to Section 34 would do violence to the scheme of the Arbitration Act. As discussed above, Section 36 enables a party to apply for enforcement of award when the period for challenging an award under Section 34 has expired. However, if Section 17 were to be extended to Section 34, the determination of time for making an application to set aside the arbitral award in Section 36 will become uncertain and create confusion in the enforcement of award. This runs counter to the scheme and object of the Arbitration Act.(a) The dissenting opinion of a minority arbitrator can be relied upon by the party seeking to set aside the award to buttress its submissions in the proceedings under Section 34.(b) At the stage of judicial scrutiny by the Court under Section 34, the Court is not precluded from considering the findings and conclusions of the dissenting opinion of the minority member of the tribunal.(e) In Ssangyong Engineering & Construction Co. Ltd v. NHAI,(2019) 15 SCC 131 this Court upheld the view taken in the dissenting opinion to be the correct position in law. In this case, the Court was hearing a special leave petition from an order passed by a division bench of the Delhi High Court. This Court noted that:12. A Section 34 petition which was filed by the appellant was rejected by the learned Single Judge of the Delhi High Court, by a judgment and order dated 9- 8-2016 [ Ssangyong Engg. and Construction Co. Ltd. v. NHAI, 2016 SCC OnLine Del 4536] , in which it was held that a possible view was taken by the majority arbitrators which, therefore, could not be interfered with, given the parameters of challenge to arbitral awards. The learned Single Judge also went on to hold that the New Series published by the Ministry could be applied in the case of the appellant as the base indices for 2004-2005 under the New Series were available. Having so held, the learned Single Judge stated that even though the view expressed in the dissenting award is more appealing, and that he preferred that view, yet he found that since the majority award is a possible view, the scope of interference being limited, the Section 34 petition was dismissed. A Section 37 appeal to the Division Bench of the Delhi High Court yielded the same result, by the impugned judgment dated 3-4-2017 [Ssangyong Engg. and Construction Co. Ltd. v. NHAI, 2017 SCC OnLine Del 7864 : (2017) 240 DLT 711]This Court set aside the award. However, in paragraph 77 of the Judgment, the Court held as under :77. The judgments of the Single Judge [Ssangyong Engg. and Construction Co. Ltd. v. NHAI, 2016 SCC OnLine Del 4536] and of the Division Bench [Ssangyong Engg. and Construction Co. Ltd. v. NHAI, 2017 SCC OnLine Del 7864 : (2017) 240 DLT 711] of the Delhi High Court are set aside. Consequently, the majority award is also set aside. Under the scheme of Section 34 of the 1996 Act, the disputes that were decided by the majority award would have to be referred afresh to another arbitration. This would cause considerable delay and be contrary to one of the important objectives of the 1996 Act, namely, speedy resolution of disputes by the arbitral process under the Act. Therefore, in order to do complete justice between the parties, invoking our power under Article 142 of the Constitution of India, and given the fact that there is a minority award which awards the appellant its claim based upon the formula mentioned in the agreement between the parties, we uphold the minority award, and state that it is this award, together with interest, that will now be executed between the parties. The minority award, in paras 11 and 12, states as follows:11. I therefore award the claim of the claimant in full.12. Costs — no amount is awarded to the parties. Each party shall bear its own cost.In Ssangyong, this Court upheld the view taken by the dissenting arbitrator in exercise of its powers under Article 142 of the Constitution, in order to do complete justice between the parties. The reason for doing so is mentioned in paragraph 77 i.e. the considerable delay which would be caused if another arbitration was to be held. This Court exercised its extraordinary power in Ssangyong keeping in mind the facts of the case, and the object of expeditious resolution of disputes under the Arbitration Act.(f) In law, where the Court sets aside the award passed by the majority members of the tribunal, the underlying disputes would require to be decided afresh in an appropriate proceeding.Under Section 34 of the Arbitration Act, the Court may either dismiss the objections filed, and uphold the award, or set aside the award if the grounds contained in sub-sections (2) and (2A) are made out. There is no power to modify an arbitral award.In McDermott International Inc. v. Burn Standard Co. Ltd., this Court held as under :52. The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the courts jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it.5. Applying the law to the facts of the present case, we find from a perusal of the arbitral proceedings that even though the award was pronounced on 27.04.2018, the signed copy of the award was provided to the parties only on 19.05.2018. The procedural orders of the tribunal reveal that on 27.04.2018, only a copythe award was provided to the parties to point out any computation error, any clerical or typographical error, or any other error of similar nature which may have occurred in the award on the next date. It was also recorded that the third arbitrator had dissented, and would be delivering his separate opinion. The proceedings were then posted for 12.05.2018.On 12.05.2018, the third arbitrator pronounced his dissenting opinion. On that date, the tribunal posted the matter to 19.05.2018, to enable the parties to point out any typographical or clerical mistakes in the dissenting opinion, and for handing over the original record of the proceedings to the parties.On 19.05.2018, the signed copy of the award and the dissenting opinion, alongwith the original record, were handed over to the parties, as also to each of the arbitrators. The tribunal ordered the termination of the proceedings6. We are of the considered opinion that the period of limitation for filing objections would have to be reckoned from the date on which the signed copy of the award was made available to the parties i.e. on 19.05.2018 in the instant case.7. It is the admitted position that the objections were filed within the period of limitation prescribed by Section 34(3) of the Act, if reckoned from 19.05.2018. Undisputedly, in the instant case, the objections have been filed within the period of limitation prescribed under Section 34(3) from the date of receipt of the signed award