The Hon’ble Supreme Court (SC), vide its judgement in NDMC v. S.A. Builders Ltd. clarified that the 30-day time limit provided under Section 33(1) of the Arbitration and Conciliation Act, 1996 is flexible and stated that the same can be extended by the parties.
The present case pertains to a challenge to the clarification of the award by the Arbitral Tribunal by the Appellant. There was a dispute between the parties. The award was passed in favour of the Respondent. Section 34 and Section 37 applications seeking setting aside of the award were also dismissed. In 2005 at the enforcement stage, the single-judge bench of the Delhi High Court referred the matter to a division bench to clarify the position of law on the question of post-award interest. The Respondent requested the division bench of the Delhi High Court to permit them to seek clarification from the Arbitral Tribunal on whether interest was awarded under Section 31(7)(a) of the A &C Act on the sum comprising of the principal plus interest on the principal in its award. The Delhi High Court granted its permission for seeking such clarification from the Arbitral Tribunal. Both parties participated in the clarificatory proceedings. The Arbitral Tribunal subsequently issued a clarification affirming the grant of post-award interest.
The Appellant subsequent to this clarification at the stage of enforcement of this award contended that the Arbitral Tribunal had become functus officio and lacked jurisdiction to issue the clarification after the lapse of 30 days as per Section 33(1) of the A & C Act. Upon an appeal before the Supreme Court, it was held that the conduct of both parties, specifically their participation in the clarificatory proceedings, constituted an implied consent to extend the time period under Section 33(1) of the A &C Act.
Section 33(1) of the A & C Act allows the Arbitral Tribunal to issue corrections or clarification such as computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the arbitral award within 30 days from the date of receipt of the arbitral award unless an alternative timeline is agreed upon by the parties. Therefore, the time limit of 30 days can be waived by another time period in the event the same is agreed upon by the parties.
The Supreme Court held that the clarification sought by the parties and issued by the learned Arbitrator would be covered by the phrase “unless another period of time has been agreed upon by the parties” as provided in Section 33 (1) of the A&C Act. The fact that both the parties participated in clarificatory proceedings before the Tribunal without any challenge to the jurisdiction of the Tribunal was enough to construe consent that they agreed to extend the period of 30 days provided under Section 33(1) of the A & C Act. Thus, the clarification was enforceable.
This ruling underscores the flexibility of the A&C Act, allowing parties to extend the time limit through mutual consent. By allowing parties to extend the time limit through their conduct and participation, the Court reinforces the principle that arbitration should be a collaborative and consensual process, tailored to the specific needs and agreements of the parties involved.