ELP Arbitration Weekly Alert

This week, we analyze the Supreme Court’s recent verdict in Indian Farmers Fertilizer Co-operative Limited v. Bhadra Products. The issue which arose for consideration before the Supreme Court was (i) whether an award on the point of limitation is an interim award and amenable to appeal under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”); or (ii) whether a decision on the point of limitation would go to the root of jurisdiction and therefore be covered within the ambit of Section 16 of the Act.

The SC held that an award on the issue of limitation is an interim award, which being an arbitral award, could be challenged separately and independently under Section 34 of the Act. Accordingly, the SC set aside the order of the Orissa High Court, and directed the District Judge to decide the Section 34 proceedings.

The SC further recommended that Parliament should consider amending Section 34 of the Act, in order to consolidate all interim awards along with the final award, so that upon the delivery of the final arbitral award, a single challenge is filed under Section 34 rather than multiple challenges. The SC observed that “Piecemeal challenges like piecemeal awards lead to unnecessary delay and additional expense.”

We trust you will find this an interesting read. For any queries or comments on this update, please feel free to contact us at drupdate@elp-in.com.

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