Serving signed arbitral award copy to employee is not proper service u/s. 31(5) of Arbitration Act

Health Care Vs Amulya Investment (Bombay High Court)

Bombay High Court held that serving signed copy of arbitral award to employee of the partnership firm is not proper service of signed award as required under section 31(5) of the Arbitration and Conciliation Act, 1996.

Facts- The 1^st respondent – Amulya Investment, a proprietary firm had business dealings with a partnership firm. Letters dated 15^th January 2016 and 7^th February 2016 exchanged between the parties contained an arbitration clause. The proprietary firm – Claimant invoked the arbitration clause in the light of disputes arising between it and the appellants. The 1^st appellant – M/s. Health Care, Medical & General Stores – hereinafter referred to as “the Partnership Firm” comprised of three partners being the 2^nd and 3^rd appellant as well as the 2^nd respondent. Arbitrator passed his award on 1^st July 2017 holding the Claimant entitled to various reliefs.

It is the case of the Partnership Firm through its partners as well as the partners who were parties to the arbitration proceedings that they were not served in the said proceedings before the Arbitrator. It was only when the copy of the award was declined to be served on them by the Arbitrator on 10^th August 2023 that the limitation for filing proceedings u/s. 34 of the Act of 1996 commenced. The Arbitration Petition was accordingly filed on 7^th September 2023.