In the SLP, the delay is after lapse of 90 days or 580 days delay is inclusive of prescribed period to appeal?
1. Was the HC justified in dismissing the case because of delay when the delay was satisfactorily explained.
yes , the HC was very much justified. Refer the citation as below.
Section 34 itself prescribes the period of limitation for making the application for setting aside an award as also the time from which such period starts reckoning. Therefore Article 5 of the Limitation Act has no applicability even on sufficient cause being shown by the applicant.
The arbitration, which is an alternate forum for redressal of disputes, is selected by the parties of their own free will and they agree to the arbitrator's decision by means of a mutual agreement or contract, which gives a go by to the normal judicial forum otherwise available to the parties. There is no compulsion or imposition by any statute compelling the parties to resort to arbitration if a dispute arises.
2. Was the HC justified in dismissing the case when the award was against the terms of the contract ?
Yes HC was justified. The HC could have gone into merrits only if the appeal was in time. Having delayed the filling of appeal they had lost the oppurtunity to be heard on merrits, even assuming for argument sake they had a good case on merrits.
3.How much chances in their SLP ?
Dont take chances. In SC issues are decided very quickly in admission stage and face value matters to be heard patentially. It is generally felt 10% of the senior councils are mostly entrusted 90% of the cases and hence if stakes are high be wise to take prudent decisions.
The dictum of Apex Court in the case of Union Of India vs M/s Popular Construction Co. on 5 October, 2001 is applicable –
i. “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.”
ii. 15. Furthermore, section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub Section 2 and sub Section 3. Sub Section 2 relates to grounds for setting aside an award and is not relevant for our purposes. But an application field beyond the period mentioned in Section 34, sub-section (3) would not be an application "in accordance with" that sub section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired...the award shall be enforced and the Code of Civil Procedure 1908 in the same manner as if it were a decree of a court". This is a significant departure form the provisions of the Arbitration Act, 1940.