DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. versus M/S NAVIGANT TECHNOLOGIES PVT. LTD.

Citation: [2021] 1 S.C.R. 1135 · Decided: 02-03-2021 · Supreme Court of India · Bench: INDU MALHOTRA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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   [2021] 1 S.C.R. 1135
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DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD.
v.
M/S NAVIGANT TECHNOLOGIES PVT. LTD.
(Civil Appeal No. 791 of 2021)
MARCH 02, 2021
[INDU MALHOTRA AND AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act, 1996 – s.31 and s.34 – Period
of limitation for filing the petition u/s. 34 – A service level agreement
was executed by the appellant-corporation in favour of the
respondent-company providing call centre services – Agreement
provided arbitration clause – The appellant-corporation terminated
the service level agreement, which led to dispute between the parties
– The disputes were referred to arbitration by a three-member tribunal
– 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 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 – On 19.05.2018, the signed copy
of the arbitral award was provided to both the parties, and the
proceedings were terminated – Whether the period of limitation for
filing the Petition u/s.34 would commence from the date on which
the draft award dated 27.04.2018 was circulated to the parties, or
the date on which the signed copy of the award was provided i.e.
19.05.2018 – Held: s.31(1) makes it obligatory for each of the
members of the tribunal to sign the award, to make it a valid award
– Further, 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 s.31(5) of the Act – In the instant case, on 19.05.2018,
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SUPREME COURT REPORTS
[2021] 1 S.C.R.
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 – Therefore, 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.
Allowing the appeal, the Court
HELD: Whether the period of limitation for filing the
Petition u/s.34 would commence from the date on which the draft
award dated 27.04.2018 was circulated to the parties, or the date
on which the signed copy of the award was provided
1. The legal requirement of signing the arbitral award by a
sole arbitrator, or the members of a tribunal is found in Section
31 of the 1996 Act, which provides the form and content of an
arbitral award. [Para 4(vii)][1149-C]
2. Section 31 (1) is couched in mandatory terms, and
provides that an arbitral award shall be made in writing and signed
by all the members of the arbitral tribunal. If the arbitral tribunal
comprises of more than one arbitrator, the award is made when
the arbitrators acting together finally express their decision in
writing, and is authenticated by their signatures. An award takes
legal effect only after it is signed by the arbitrators, which gives
it authentication. There can be no finality of the award, except
after it is signed, since signing of the award gives legal effect and
validity to it. The making and delivery of the award are different
stages of an arbitration proceeding. An award is made when it is
authenticated by the person who makes it. 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.
[Para 4(viii)][1149-G-H; 1150-A-C]
3. 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
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upon the arbitrator / tribunal to provide the signed copy of the
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