Service of an arbitral award at the last known address triggers limitation despite its return undelivered.

The dispute arose under a Service Provider Agreement dated 09.06.2015, concerning service fees, alleged contractual breaches, and a lien over the appellant’s fixed deposit. The respondent invoked arbitration, and an arbitral tribunal was appointed by the Delhi High Court on 03.07.2020. The tribunal passed its award on 17.01.2023.

The appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) on 05.06.2023. The learned Single Judge dismissed it as barred by limitation, holding that the award had been received on 05.02.2023 and that the period of three months, together with the maximum additional thirty days permissible under the proviso to Section 34(3), had expired before the filing date.

Before the Division Bench, the appellant contended that it actually received the award on 06.02.2023, or, alternatively, that receipt on 05.02.2023, which was a Sunday, should be treated as receipt on the next working day. It also argued that service was invalid because the award had been sent to its former Santacruz address.

The respondent contended that the former address was the appellant’s last known address in the arbitral proceedings, that the appellant had never formally notified the arbitrator of the change of address, and that the appellant had consistently pleaded before the Single Judge that the award was received on 05.02.2023.

Whether the Section 34 petition filed on 05.06.2023 was barred by the limitation period prescribed under Section 34(3) of the Act?

Whether the award was validly delivered or deemed to have been delivered when it was sent by registered post to the appellant’s last known address, despite the packet being returned undelivered?

Whether the date of receipt could be treated as 06.02.2023 because 05.02.2023 was a Sunday, or on the basis of the appellant’s subsequently filed affidavit and inward courier register?

Section 34(3) of the Act prescribes a limitation period of three months for filing an application to set aside an arbitral award from the date on which the party receives the award, with a maximum additional period of thirty days available only upon showing sufficient cause; the period cannot be extended beyond that statutory outer limit.

Section 31(5) requires delivery of a signed copy of the award to the parties, while Section 3 of the Act, read with Section 27 of the General Clauses Act, 1897, supports deemed delivery where the communication is properly sent to the party’s last known address in the ordinary course.

Union of India v. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239, and State of Maharashtra v. Ark Builders Pvt. Ltd., (2011) 4 SCC 616, establish that limitation under Section 34(3) begins upon delivery or receipt of the signed award.

State of Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC 210, holds that where an award is physically left at an office on a non-working day without the concerned party’s knowledge, receipt may be treated as occurring on the next working day; the principle does not apply where receipt or knowledge on that date is admitted.

The Court held that the appellant had consistently stated in its Section 34 petition, list of dates, and condonation application that it received the award on 05.02.2023. Its subsequent assertion of receipt on 06.02.2023, made for the first time in a later affidavit, was unsupported except by its own inward courier register, which was treated as self-serving.

The reliance on Himachal Techno Engineers was rejected because the appellant had not pleaded that it lacked knowledge of the award on 05.02.2023; therefore, the fact that the date was a Sunday did not postpone receipt.

The award had also been sent to the appellant’s last known address used consistently in the arbitral proceedings. Mere mention of a different address in pleadings did not amount to formal notification to the arbitrator that future communications should be sent there. The return of the registered post did not invalidate service, as accepting that argument would undermine the statutory scheme of Sections 3 and 31(5) of the Act.

Accordingly, limitation began on 06.02.2023, the three-month period expired on 05.05.2023, and the additional thirty-day period expired on 04.06.2023. The petition filed on 05.06.2023 was therefore beyond the permissible statutory period.

The appeal under Section 37 of the Act was dismissed, and the order of the learned Single Judge rejecting the Section 34 petition was upheld.