Limitation Period for Foreign Award would be governed by Article 137 limitation Act 1963: SC

In a recent case of Government of India vs Vedanta Limited (Civil Appeal No.3185 of 2020), the Supreme Court of India has held that period of limitation for filing petition for enforcement of foreign award under Section.47 and Section 49 of Arbitration Act, 1996 would be governed by Article.137 of limitation act, 1963 which prescribes that, the limitation period will begin from time when right to apply accrues for which limitation period is of 3years..

The three judge bench comprising of Justices S.Abdul Nazeer, Indu Malhotra and Aniruddha Bose observed that Article 136 of Limitation Act is relating to decrees of civil court in India, and thus application for execution of foreign decree would not be applicable, and only Article 137 would be covered for foreign award as Article.137 of Limitation act is residuary provision.

Foreign awards are not decree of Civil Court in India, as Article 136 of Limitation Act is only for any decree or order of civil courts of India thus it would not be applicable for any foreign awards under section 47 and 49.

Under section 5 of Arbitration Act 1996, the party may file application for condonation of delay in filling case for enforcement of foreign award as bar contained there excludes application filed under provision of Order XXI of the Code of Civil Procedure, but this bar is not applicable to the substantive petitions filed under the Act. Sections 47 and 49 are substantive petitions filed under Arbitration Act, 1996 thus the bar contained in section 5, which excludes application filed under provision of Order XXI of CPC , would not be applicable to such substantive petitions filed under ArbitrationAct,1996.

In this case the court noticed that enforcement petition was filed within 3 months from date when right to apply accrued and petition for foreign award was filed under article 137 of the Limitation Act, 1963.The bench also added that in any event, there are sufficient grounds to condone the delay, if any, in filing enforcement / execution of petition under section 47 and 49 on account of lack of clarity with respect to period of limitation of foreign award.

Credit: Gauri dharne

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