The Arbitration and Conciliation Act, 1996, streamlines dispute resolution in India. Section 31(5) ensures arbitral awards are delivered to parties, a critical step in the process. This article examines its significance, key case laws, and practical implications.
Overview of Section 31(5) in the Arbitration and Conciliation Act
If one tries to understand the legislative intent of Section 31(5) in The Arbitration And Conciliation Act, 1996, it comes down to one point; the Arbitral Award should be communicated. The sole intent behind delivering the signed copy is to communicate the final decision specifically to the Party concerned and not to anybody else in order to enable the party to understand and decide the next course of action. The emphasis is on whether the Party received the Award or not.
Definition of "Party" in Arbitration Agreements
As per section 2(h) of the Act, Party is defined as “a party to an arbitration agreement”. The abovementioned definition excludes everyone else other than the “party to the Arbitration Agreement”.
Even delivery to the agent and lawyer is not considered as a proper compliance under section 31(5) in The Arbitration And Conciliation Act of 1996:
Key Case Laws on Arbitral Award Delivery
Benarsi Krishna Committee v. Karmyogi Shelters Pvt. Ltd.
It is one thing for an Advocate to act and plead on behalf of a party in a proceeding and it is another for an Advocate to act as the party himself. The expression "party", as defined in Section 2(h) of the 1996 Act, clearly indicates a person who is a party to an arbitration agreement. The said definition is not qualified in any way so as to include the agent of the party to such agreement.
Union of India v. Tecco Trichy Engineers
“8. The delivery of an arbitral award under sub-Section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, has to be "received" by the party. This delivery by the arbitral tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings.”
Importance of Effective Award Delivery
The above case laws clears that even the advocate or the agent is excluded from the purview of party when it comes to compliance under Section 31(5) in The Arbitration And Conciliation Act, 1996. The emphasis is on the Party and the Party means Party to the Arbitration Agreement.
The court has also cautioned that the delivery does not merely mean dispatch of the Arbitral Award but the receipt of the Award by the party. The effective delivery under Section 31(5) will complete only upon the receipt of Award by the party.
Since the determination of when the limitation period begins under Section 34(3) of the Arbitration and Conciliation Act depends crucially on the interpretation of Section 31(5), its proper compliance cannot be undermined which mandates the delivery of a signed copy of the arbitral award to each party.
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