Limitation To Challenge Arbitral Award Starts Only On Delivery Of Signed Copy, Not Pronouncement: Madhya Pradesh High Court

The Madhya Pradesh High Court has clarified a crucial aspect of limitation under the Arbitration and Conciliation Act, 1996, holding that the period for challenging an arbitral award begins only when a signed copy of the award is delivered to the party concerned, and not merely when the award is pronounced.

The ruling came in an arbitration appeal where the Court set aside an order refusing to condone delay, observing that the lower court had failed to properly appreciate the statutory scheme governing delivery of arbitral awards.

The division bench, comprising Justice Vijay Kumar Shukla and Justice Alok Awasthi, was hearing an appeal filed under Section 37 of the Act against an order of the Commercial Court, Indore, which had dismissed an application for condonation of delay and consequently rejected the appellant’s challenge under Section 34. The appellant had argued that the delay was wrongly computed since the signed copy of the arbitral award had never been delivered to them in accordance with law.

Before the High Court, Arpit Kumar Oswal, counsel for the appellant contended that the limitation period under Section 34(3) must be read in light of Section 31(5), which mandates delivery of a signed copy of the arbitral award to each party. It was argued that mere pronouncement of the award or presence of counsel would not trigger limitation unless the statutory requirement of delivery was fulfilled.

On the other hand, Girish Patwardhan, Sr. Adv. assisted by Paresh Joshi, the respondent’s counsel supported the Commercial Court’s order, arguing that the appellant was present on the date of the award and that it should be presumed that the signed copy was delivered on that date itself.

Examining the record, the High Court focused on the arbitrator’s order sheet dated March 15, 2024. The order recorded the presence of counsel for both sides but did not specifically record the presence of the appellant. It also stated that the award was “passed and delivered” and that signed copies were delivered to the parties. However, the bench found this insufficient to conclusively establish compliance with Section 31(5).

In a significant observation, the Court noted that the statutory mandate requires actual delivery of a signed copy of the award to each party. The bench held that “the provisions of Section 34(3) of the Act has to be read alongwith Section 31(5) of the Act and, therefore, the limitation would count from the date when signed copy of the award is delivered to the appellant(s).”

The Court further emphasised that the presence of counsel cannot be equated with delivery of the award to the party itself, particularly when the record does not clearly establish such delivery. It observed that the arbitrator’s order sheet did not record the presence of the appellant and, therefore, the presumption of delivery could not be sustained.

Calling the omission significant, the bench remarked that the Commercial Court had failed to consider this vital aspect while rejecting the application for condonation of delay. It held that such an approach defeats the statutory safeguards built into the arbitration framework, which ensure that parties are not deprived of their right to challenge an award due to procedural lapses.

Consequently, the High Court set aside the impugned order and directed the Commercial Court to reconsider the application for condonation of delay afresh, keeping in view the interplay between Sections 31(5) and 34(3) of the Act. The appeal was accordingly allowed and disposed of.

Case Title: Late Shri Smt. Navlibai W/o Shri Shri Bhagwanlajji Mehta Deceased Through Her Legal Representatives and Others v. Motilal Khatri

Date of Order: March 26, 2026

Bench: Justice Vijay Kumar Shukla and Justice Alok Awasthi