Bijli Vitran Nigam Ltd. v. M/s. Navigant Technologies Pvt. Ltd

CITATION	2021 SCC OnLine SC 157
DATE OF JUDGMENT	2nd March 2021
COURT	Supreme Court of India
APPELLANT	Dakshin Haryana Bijli Vitran Nigam Ltd.
RESPONDENT	M/s. Navigant Technologies Pvt. Ltd
BENCH	Hon’ble Ms. Justice Indu Malhotra and Hon’ble Mr. Justice Ajay Rastogi

Introduction 

The Supreme Court of India in its judgment dated March 2, 2021, decided the case of Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s. Navigant Technologies Pvt. Ltd. This was an appeal filed against an order dated July 17, 2019, passed by the Punjab and Haryana High Court in Civil Revision Petition (CRM) No. 19409 of 2015. The facts of the case pertain to a Service Level Agreement dated May 2, 2011, entered by and between Dakshin Haryana Bijli Vitran Nigam. There was an arbitration clause inserted within the Agreement for dispute resolution. On 16th October 2014, the Appellant terminated the Agreement and a three-member Arbitral Tribunal was constituted, which by majority judgment dated 27th April 2018 held in favour of the Respondent.

The Appellant then challenged the award by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996, supported by a petition for condonation of delay, before the Civil Court. The court framed that the period of limitation for the award to be challenged started on April 27, 2018, i.e. on which date, the majority decision was pronounced. The High Court held that he was out of time and the Appellant appealed to the Supreme Court, contending that the expression “arbitral award” embraces both the majority and the dissenting opinion and consequently the limitation period ran from the date when all opinions were available.

The Supreme Court considered the provisions of the 1996 Act relating to the signing and delivering of arbitral awards. The Supreme Court found that the limitation period for objections filed under Section 34 runs from the date the signed copy of the award actually reaches the party concerned. In this case, the oral award was made on April 27, 2018, but the award that was signed finally reached the parties on May 19, 2018. Therefore, the Supreme Court found that the limitation period ran from the latter of the two dates. The Court accepted dissents although such views are non-binding they may in the course of proceedings have relevance with the aim of setting aside the award.

Facts of the case 

The Appellant is Dakshin Haryana Bijli Vitran Nigam Ltd. and the Respondent is M/s. Navigant Technologies Pvt Ltd. The Service Level Agreement was for the Respondent to operate a call center for the Appellant, as agreed on May 2, 2011. The important feature of the agreement was that it contained a dispute resolution clause relating to arbitration by a three-member tribunal under the provisions of the Arbitration and Conciliation Act, 1996.

Disputes with the Respondent arose from the fact that, by termination of the agreement, the Appellant dismissed the Respondent as of October 16, 2014. A three-member Arbitral Tribunal was constituted to settle these disputes. The tribunal delivered its award on April 27, 2018, with a majority ruling in favor of the Respondent. The dissenting opinion of the third arbitrator was filed on May 12, 2018, and the tribunal concluded the proceedings by signing the arbitral award on May 19, 2018.

As soon as the arbitral award was issued, the Appellant filed an application under Section 34 to set aside the award under the 1996 Act; however, the said application was also filed along with the application for condonation of delay. The Civil Court rejected the application for condonation and further held that the limitation period, for challenging the award, had started on April 27, 2018, measuring from the date that the majority decision was given to the Appellant. Being aggrieved by the aforesaid judgment and order, the Appellant approached the High Court.  The High Court affirmed the judgment and order of the Civil Court.

The Appellant approached the Supreme Court of India by way of special leave, and in their submissions, both the Civil Court and the High Court had overruled the objections on the score of limitation, and not on the ground of merits. It was the contention of the Appellant that the term ‘arbitral award’ under the 1996 Act would have to be one inclusive of a majority as well as minority view. It was argued that the limitation period should run from when the signed copy of the award, containing the dissenting opinion, had been served.

The House of Lords carefully looked at the language of the 1996 Act, especially as it concerned the signing and delivery of arbitral awards. The Court summed that the period of limitations within which objections are to be filed under Section 34 would start running from the date of handing over of the signed copy of the award to the party. In this case, since the signed copy of the award was given on May 19, 2018, the Supreme Court ruled that the limitation period started to run from that date. The Court also noted that even though these dissenting opinions are not binding, they can still be taken into consideration during the proceedings of setting aside the award. The case relates to the following issues

Section 34, Arbitration and Conciliation Act, 1996: Whether the period of limitation for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996, would commence from the date on which the draft of the award was circulated or from the date on which the signed copy of the award was supplied. 7. Arbitral award: Whether the term “arbitral award” under the 1996 Act includes both the majority and minority (dissenting) opinions for computation of the period of limitation.

• Whether dissent of an arbitrator can be an integral part of an arbitral award and which would be an eligible case for challenge under Section 34 of the 1996 Act?

• Whether the bar imposed by Section 31 of the 1996 Act, which provides that the arbitral award shall be final and binding, will result in the arbitral award being void by reason of non-compliance by all the arbitrators in signing?

• Whether the objections to the arbitral award, based on the alleged errors or dissenting opinions, ought to be treated as an application to set aside the award under Section 34 of the 1996 Act?

Appellant’s Arguments:

The Appellant submitted that the Civil Court and the High Court rejected their applications on the threshold that the same were within limitation and without considering the case on merits. They contended that the expressions “arbitral award” under the Arbitration and Conciliation Act, 1996 should include both the majority and minority views. The Appellant drew attention to Section 31(1) of the Act, which provides that the award shall be signed by all members of the tribunal, and objections to the whole award, and not merely to the majority decision alone, can be permitted under Section 34. They were of the view that the dissenting judgment, having been delivered on a date much later, on 12th May 2018, formed part of the arbitral award and affected the limitation period upon which they intended to rely in the present case. On their part, the Appellant referred to several bites of the cherry that had been snatched by, inter alia, Ssangyong Engineering, which in fact allowed the relevance of a dissenting opinion in some circumstances.

Respondent’s Arguments 

The Respondent submitted that dissent cannot form a part of the term “arbitral award” for calculating the period of limitation provided under Section 34(3) of the 1996 Act. The Respondent maintained the limitation period must commence from 27th April 2018 when the majority decision was pronounced. He relied upon Section 29(1) of the 1996 Act, by which the decision of the majority members can amount to the arbitral award, and as provided under Section 31(2), the majority members can sign the award without the signature of the dissenting arbitrator. They placed heavy reliance in that fact that the dissenting opinion is really no more than an opinion and not enforceable as an award, nor should it form the basis for affecting the computation of the limitation period. He placed reliance on numerous judgments of High Courts, which supported his stand that the limitation period starts from the date of passing of the majority award, some of which are Bharat Sanchar Nigam Ltd.

Judgment

The Supreme Court examined the provisions of the Arbi6tratin and Conciliation Act, 1996, specifically, the nature of an arbitral award and the essential of its enforceability. The Court found that the statute admits of one arbitral award, and such could be a majority or unanimous one, the Court further explained to state that the dissenting opinion is an opinion alone and not an executable award. The Court underscored that it was necessary that the arbitral award be executory if legally signed by all its members, and only then would it arrive at its legal finality and execution.

On the issue of when the limitation period under Section 34 of the Act starts for filing objections, the Supreme Court held that it starts from the date on which the signed copy of the award is delivered to the party concerned. In the present case, the majority award was pronounced on April 27, 2018, but the signed copy of the award was furnished on May 19, 2018. Therefore, limitation commenced from the latter date. The Court observed that the signing of the award is a formality and does not have the effect of making the award winner final.

The Supreme Court also dealt with the scope of the dissenting opinions and stated that it was of the view that such opinions are not binding for a court, however, the award stand owner can refer such dissenting opinion in favor of the objections under Section 34. The court has explicitly referred the judgments like Ssangyong Engineering to state that court can look into dissenting opinion at the time of the setting aside. Ultimately, the Supreme Court held that the limitation period for filing objections dated to 19 May 2018 when the signed copy of the award was delivered, thereby resolving the ambiguity on the interplay between the Act and the limitation period.

 Analysis

The judgment of the Supreme Court in Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s. Navigant Technologies Pvt. Ltd. brought out certain features under the Arbitration and Conciliation Act, 1996, pertaining to the commencement of limitation for challenging arbitral awards. It ensures that the procedural formalities associated with finalizing an award and delivering it to the parties are complied with by holding that the limitation period commences from the date on which a signed copy of the award is delivered to the parties. It is nonetheless a decision that confirms that, for the purposes of finality, every member of the tribunal must sign an arbitral award to protect its integrity and provide explicit directions for the parties.

This judgment also explains the role of dissenting opinions in arbitral proceedings. Although dissenting opinions are not legally binding and are not part of the arbitral award, the Court accepted that they may be relevant in an action challenging the award. This approach, however, does allow a party to place before it, under Section 34, grounds of objection based on any dissenting views presented as a way of illustrating the insidious ways through which such opinions could impact the disposition in judicial review. The ruling of the Court seeks to strike a balance between procedural rigour and practical considerations, hence giving an all-rounded framework for approaching disputes on arbitral awards and limitation periods flowing therefrom.

Conclusion 

The judgment of the Supreme Court in Dakshin Haryana Bijli Vitran Nigam Ltd. v. M/s. Navigant Technologies Pvt. It is in this context that Ltd. lays down a clear and categorical exposition of some of the important provisions under the Arbitration and Conciliation Act, 1996. The court has stated that the limitation period for filing objections commences only from the date the signed copy of the arbitral award is delivered and hence, reaffirmed that adherence to procedural requirements is a condition precedent for the award to achieve legal finality. This judgment gives parties adequate time to challenge an award, based on the only official and complete version.

The judgment finally gives clarity to the role of dissenting opinions in arbitral proceedings: though nonbinding, they may still be resorted to at objections against an award. A subtle approach, which recognizes that dissenting views can be powerful, without disrupting the finality of the majority’s decision. The conclusions reached by the Court increase procedural certainty and fairness in the conduct of the arbitration, ensuring that matters relating to form and substance, while currently adequately dealt with in relation to arbitral awards, also are covered in a legal context.

REFERENCES

1. SCC Online
2. https://www.pslchambers.com/case-brief/dakshin-haryana-bijli-vitran-nigam-ltd-v-m-s-navigant-technologies-pvt-ltd/ 
3. https://indiankanoon.org/doc/124541183/

This Article is written by Nandini Achhra student of Vivekananda institute of professional studies, Delhi; Intern at Legal Vidhiya.

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