Ministry of Youth Affairs and Sports, Dept. of Sports, Govt. of India V. Ernst & Young LLP and Anr.

Case : Ministry of Youth Affairs and Sports, Dept. of Sports, Govt. of India V. Ernst & Young LLP and Anr.

Court : Delhi High Court

Date of Judgment: 28.08.2023

By : Adv. Saksham Mathur

Facts:

  • The Organizing Committee of Commonwealth Games 2010, (now Ministry of Youth Affairs and Sports, Government of India), and a consortium of Ernst & Young Pvt. Ltd. and M/s Event Knowledge Services, Switzerland, entered into an agreement on 24.03.2008, for games planning, project management, and workforce
  • M/s Event Knowledge Services, Switzerland, transferred all its rights and obligations to M/s Event Knowledge Services, Mauritius on 1.06.2009. Disputes arose between the parties, leading organizing Committee of Commonwealth Games 2010 to invoke the arbitration clause 46 of the An Arbitral Tribunal of three retired High Court judges was constituted.
  • organizing Committee of Commonwealth Games filed a Statement of Claim, including a claim for 2.82 crores along with interest. Respondents filed a Statement of Defense and counterclaims.
  • The Arbitral Tribunal vide award dated 12.2017, awarded Rs. 25,04,259/- with interest and costs to the organizing Committee of Commonwealth Games but did not explicitly address the Rs. 2.82 crore claim in the concluding paragraph.
  • Petitioner filed an application under Section 33(1) of the Arbitration Act for correction of the award, including reflecting the 2.82 crores claim.
  • The Tribunal, on 03.2018, issued an order correcting the typographical errors in paragraphs 96 and 112 but did not address the Rs. 2.82 crores claim in this order.  On  17.05.2018, the Tribunal issued an “Addendum to the Award,” correcting another typographical error in paragraph 112, which had occurred in its March 7 order.
  • The petitioner claims it was unaware of the  March  7  order  until  it received the May 17 Upon petitioner’s request, the Tribunal provided a copy of the March 7 order on 22.05.2018.
  • On 06.2018, petitioner again requested the Tribunal to address the Rs. 2.82 crores claim, seeking an opportunity for oral submissions.
  • On 13.06.2018, the Tribunal informed petitioner that it could not pass further orders as it had become functus officio (having completed its duty).
  • Petitioner filed a petition under Section 34 of the Arbitration Act, challenging the award for not granting relief for the 2.82 crore claim.
  • The respondents argue that the petition is time-barred under Section 34(3) of the Arbitration They contend that the limitation period began on March 7, 2018, the date of the Tribunal’s order disposing of petitioner ‘s Section 33 request.
  • The petitioner, however, argues that the limitation period should  be counted from 06.2018, the date the Tribunal declared itself functus officio. Petitioner claims its request  regarding  the  Rs.  2.82  crores remained “alive” until that  point,  as  the  Tribunal  did  not  explicitly address it.

 

Issue

 

  • Whether or not the petitioner filed the petition within the time period?
  • Whether the Tribunal’s actions regarding the Section 33 request affect the limitation period?

 

Legal Analysis

 

  • Section 34(3) of the Arbitration Act: Establishes a three-month limitation period for challenging an award, running from the date of receiving the award. If a Section 33 request is made, the period starts from the date of that request’s
  • Section 33 of the Arbitration Act: Allows parties to seek corrections or interpretations of the
  • Extension of Time: The Tribunal has the authority to extend the time to make corrections under Section 33(6), even on its own
  • Delivery of Award (Section 31(5)): The limitation period begins  after valid delivery of the award, which requires a signed
  • Interpretation of “Signed Copy”: Case law suggests  that  a  scanned, signed copy delivered electronically constitutes  valid  delivery  under Section 31(5).
  • “Sufficient Cause” for Delay (Section 34(3) Proviso): The court has discretion to condone delays up to 30 days beyond the three-month limit if “sufficient cause” is shown. This applies even if no formal application for condonation is made
  • Defective vs. Non-est Filing: An application with curable defects is not automatically non-est. Only fundamental flaws rendering the application unintelligible or unauthorized would make it non-est.

 

Conclusion

 

The petition, filed on 24.08.2018, was two  days  delay,  considering  the 17.05.2018, start of the limitation period. However, this delay falls within the 30-day grace period provided the petitioner demonstrates “sufficient cause.”The petitioner should be granted the opportunity to file a formal application for condonation of delay. The court will then exercise its discretion to determine if “sufficient cause” exists to condone the two-day delay.

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