Arbitral award decree cannot be challenged under Order 9 Rule 13 CPC, and delay requires sufficient cause

A decree passed in terms of an arbitral award is not amenable to an application under Order 9 Rule 13 CPC, because such decrees are governed by the special scheme of the Arbitration Act, 1940; any interference depends on the statutory framework, not the procedure for ex parte suit decrees. Delay in moving to set aside the award was also not condoned, as notice had been duly served and no sufficient cause was shown under Section 5 of the Limitation Act, 1963 read with Article 119(b). The allegation of arbitral misconduct failed as the arbitrators had only construed the contract on the admitted facts and no misconduct was established.

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Issues: (i) whether an application under Order 9 Rule 13 of the Code of Civil Procedure, 1908 was maintainable to set aside a decree passed in terms of an arbitral award; (ii) whether sufficient cause was shown to condone the delay in moving the application to set aside the decree and award; (iii) whether the arbitrators were shown to have misconducted themselves in rejecting the counterclaim.

Issue (i): whether an application under Order 9 Rule 13 of the Code of Civil Procedure, 1908 was maintainable to set aside a decree passed in terms of an arbitral award.

Analysis: The decree under challenge was one passed on an award under the Arbitration Act, 1940. Order 9 Rule 13 applies to ex parte decrees in suits, whereas a decree under Section 17 of the Arbitration Act, 1940 is governed by the special statutory scheme for awards. The judgment also recognises that, in an appropriate case, the court may act in its inherent jurisdiction where the decree has been passed irregularly or without compliance with the statutory requirements, but that principle does not make Order 9 Rule 13 itself applicable.

Conclusion: The application under Order 9 Rule 13 was not maintainable for setting aside the award decree.

Issue (ii): whether sufficient cause was shown to condone the delay in moving the application to set aside the decree and award.

Analysis: Under Section 5 of the Limitation Act, 1963 read with Article 119(b), an application to set aside an award must be filed within the prescribed period of 30 days from service of notice under Section 14(2) of the Arbitration Act, 1940, subject to condonation upon sufficient cause. The court found that notice had been duly served, that the time for challenging the award had expired, and that the applicant had not shown diligence in securing the necessary papers or in searching the court records. The explanation for the delay was held to be inadequate.

Conclusion: Sufficient cause was not shown and the delay was not condoned.

Issue (iii): whether the arbitrators were shown to have misconducted themselves in rejecting the counterclaim.

Analysis: The counterclaim concerned refund of import duty allegedly embedded in the contract price. The contract text provided that import duty, if any, was to be paid in advance by the buyer and any increase or decrease would be on the buyer's account. On the admitted facts, the buyer had not paid the import duty. The court held that the arbitrators had merely construed the contract and had not been required to take evidence of any separate agreement before reaching their conclusion; the material relied on did not establish arbitral misconduct.

Conclusion: No arbitral misconduct was proved.

Final Conclusion: The challenge to the award decree failed on maintainability, limitation, and merits, and the court declined to interfere.

Ratio Decidendi: A decree passed in terms of an arbitral award is not governed by Order 9 Rule 13 of the Code of Civil Procedure, 1908; interference in such a matter depends on the statutory scheme of the Arbitration Act, 1940 and, where delay is involved, upon proof of sufficient cause under Section 5 of the Limitation Act, 1963.

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