Signed arbitral award sent to parties via email is valid delivery to trigger limitation: Delhi High Court

The Delhi High Court on May 23 ruled that an arbitral award pronounced in a virtual hearing and subsequently shared as a signed digital copy over email amounts to valid delivery under Section 31(5) of the Arbitration and Conciliation Act, 1996..Section 31(5) lays down that a signed copy of arbitral awards must be delivered to all parties once it has been pronounced.A division bench of Justices Vibhu Bakhru and Tejas Karia has held that delivery of the signed arbitral award by email is sufficient under this provision, and that such delivery would to trigger the limitation period under Section 34(3) for challenging the award.“A signed copy of the award can be delivered electronically in accordance with Section 31(5) of the Act provided that the signed copy of the award attached to the electronic communication is duly authenticated by the Arbitral Tribunal or Arbitral Institution,” the Court held..The judgment came in an appeal filed by Kristal Vision Projects Pvt Ltd, challenging the dismissal of a petition against an arbitral tribunal ruling as time-barred. The Court upheld the arbitral tribunal’s delivery process, noting that the award was not only pronounced in a virtual hearing but also emailed and acknowledged by the company’s representative.The dispute originated from a construction contract dated February 26, 2010, between Kristal Vision Projects Private Limited and the Union of India for building 826 dwelling units for the armed forces in Meerut, Uttar Pradesh. The project, which began with a letter of acceptance issued on March 10, 2010, became mired in disputes over contract performance and compliance.Both parties simultaneously terminated the contract on March 31, 2016, each citing breaches by the other. The Union of India alleged that Kristal Vision had committed a breach of Clause 48 of the General Conditions of Contract, while the construction company cited delays in issuing time extensions, illegal deductions from bills, non-payment for extra works, and failure to issue completion certificates..Following the contract termination, Kristal Vision approached the Delhi High Court in 2017 seeking the appointment of an arbitrator under Section 11 of the Arbitration Act, 1996. The court appointed a sole arbitrator on February 22, 2018, who conducted extensive proceedings over several years before passing the final award on October 16, 2023.The arbitral tribunal ruled comprehensively in favor of the Union of India, directing Kristal Vision to pay ₹25,98,58,132.05 to the government along with interest at 7 per cent per annum from the date of filing the Statement of Claim. Including accrued interest of ₹9,12,99,196.86, the total award amount came to ₹35,11,57,328.91.Kristal Vision challenged the arbitral award before the High Court by filing a plea under Section 34 of the Arbitration Act. A single judge of the High Court upheld the award and dismissed the appeal, on the ground that it was barred by limitation. This led the company to file another appeal under Section 37, challenging the dismissal of its Section 34 plea. .Kristal Vision submitted that the single-judge had erred in calculating the limitation period from October 16, 2023. It explained that on the said date, a former employee who was no longer associated with the company had received the award copy by email. The company added that it actually received the arbitral award only on March 9, 2024. As it had not received a signed copy of the award for a long period of time, on March 9, 2024, the company approached the arbitrator's office, who forwarded the e-mail dated October 16, 2023, containing a scanned copy of the Award.Kristal Vision contended that the limitation period should run from this date. The single judge, however, had opined that the company should have been more diligent. The single judge added that since the arbitration was conducted virtually and since the arbitration award was signed in the presence of parties before being emailed, the responsibility of collecting a physical copy of the award from the arbitrator's office lay with the parties..Before the division bench of the Court, Senior Advocate Arvind Nayar represented Kristal Vision and submitted that a delivery of a signed copy of the award to a former employee did not meet the statutory requirement of Section 31(5).Relying on Benarsi Krishna Committee v. Karmyogi Shelters and other precedents, he argued that the “party” referred to in Section 31(5) must mean the party itself, and not an agent, counsel, or ex-employee..In response, Central Government Standing Counsel Nidhi Raman argued that the ex-employee who was sent the award, Rama Varma, had consistently acted as the company’s authorised signatory throughout the arbitration, attended hearings, and filed documents, including the vakalatnama. The email acknowledgment sent by him post the award's pronouncement was copied to the company’s Managing Director, who did not raise any objections at the time..The Court noted that Section 31(5) imposes a mandatory requirement for the delivery of a signed copy of the arbitral award, and such delivery triggers the limitation period under Section 34(3). However, the delivery need not necessarily be in physical form, it observed.Referring to a line of judgments including Tecco Trichy, Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies, and Ministry of Youth Affairs v. Ernst & Young, the Court observed that authenticated digital copies sent via email can constitute valid delivery.“Technological advancements allow for authenticated digital copies to be considered valid for all legal purposes,” the Court observed..The Court distilled the following principles regarding delivery under Section 31(5):a) Mandatory Requirement: Section 31(5) requires that a signed copy be delivered to the party. The limitation period under Section 34 commences only upon such delivery.b) Signed Copy: The term includes copies bearing original signatures or duly authenticated/ certified copies of the signed award by the arbitral tribunal or administering institution.c) Delivery of the Award: It is the tribunal’s obligation to ensure delivery. If parties do not collect the award after a virtual pronouncement, the tribunal must dispatch it.d) Delivery to the Parties: Delivery to counsel is valid if the counsel was duly authorised or provided as the service address.e) Electronic Delivery: Digital delivery is valid if the signed copy is authenticated and sent in compliance with Section 31(5).f) Delivery by Institution: Delivery of the signed copy of the award by arbitral institution on behalf of the tribunal to the parties and / or their authorized counsel shall be a valid service under Section 31(5) of the Act in Institutional Arbitrations..Rejecting the Kristal Vision's argument that Varma was no longer employed and hence unauthorised, the Court held that his continued representation during the arbitration and his undisputed participation in the pronouncement hearing supported the conclusion that he remained authorised. Moreover, the email confirming receipt was addressed to the arbitral tribunal and copied to the Managing Director, who later admitted to receiving it.“The contention… that Mr. Rama Varma Ch. was not authorized to represent the Appellant cannot be accepted as it appears to be an afterthought,” the Court noted.It thus dismissed the plea filed by Kristal. .Nayar was briefed by Advocates inay Tripathi, Akshay Joshi, Shravanth Shanker and Grahita Agarwal.The Union government was represented by Central Government Standing Counsel Nidhi Raman with Advocates Archana Surve, Zubin Singh and Aakash Mishra.[Read Judgment]