Law: Arbitration Act, 1940

Section: X,17

(a) Arbitration Act (X of 1940) S.17---Arbitration award---Award made rule of court merely on the ground that objections against it were barred by time---Duty of court to examine award on its own motion regardless of whether any objections or time-barred objections were filed or not---Scope---Court must ensure that award is free from any patent illegality, material irregularity or jurisdictional error---Facts of the matter in brevity were that the appellant/Capital Development Authority (CDA) awarded a construction contract to respondent company---Various disputes between the parties led them to arbitration---The sole arbitrator awarded Rs. 640 million to the respondent company---The appellant/CDA filed objections beyond the statutory limitation period which the Trial Court dismissed solely on grounds of delay and made the award rule of the court---The significant questions requiring determination by the High Court were as to (i) Whether the objections filed against the arbitration award were rightly dismissed as time-barred without a substantive examination of the award itself? and; (ii) Whether the grounds raised for setting aside the award in appeal merit consideration despite the dismissal of objections on the ground of limitation? ---Held: While deciding the objections filed to the award Trial Court failed to appreciate the true import of the statutory mandate under S. 17 of the 1940 Act---Record demonstrated that the Trial Court failed to fulfill its legal obligation under S. 17 of the 1940 Act---Trial Court made the award rule of the court solely on the ground that the objections filed by the appellant/CDA were time-barred---Record clearly revealed that the Trial Court did not undertake the essential judicial scrutiny of the award as required by law under S. 17 of the Act 1940---It failed to assess the contents, fairness or legality of the award and did not determine whether the award was within the bounds of the arbitrator s authority or in violation of any provision of law, instead, the court dismissed the objections on the ground of limitation and proceeded to make the award rule of the court without applying the standards mandated by law---This…