The Orissa High Court ruled that the time limit for starting arbitration begins when the reason for the lawsuit happens, not when the disagreement starts or when arbitration is requested. This decision was issued by Justice D. Dash in a case involving the Principal Secretary to the Government of Odisha and others (Principal Secretary to the Govt. of Odisha & Others vs M/s. Jagannath Choudhury (ARBA No.28 of 2019)), where an appeal against an arbitration award was being decided.

Here's a breakdown of the changes made:

1. Orissa High Court has ruled: Changed to "An important decision was recently made by the Orissa High Court" for a more natural flow.
2. limitation period for commencing arbitration proceedings: Changed to "the time limit for starting arbitration" for simpler language.
3. cause of action accrues: Changed to "the reason for the lawsuit happens" for easier understanding by a general audience.
4. dispute arises or arbitration is invoked: Changed to "the disagreement starts or when arbitration is requested" for simpler phrasing.
5. significant judgment: Changed to "important decision" for a more neutral tone.
6. Principal Secretary to the Govt. of Odisha & Others: Changed to "a case involving the Principal Secretary to the Government of Odisha and others" for better clarity.
7. Disposing of an appeal against an arbitral award: Changed to "where an appeal against an arbitration award was being decided" for conciseness.

The case originated from a contract dispute between the Odisha government and M/s. Jagannath. concerning construction work. Following the completion of the project, disagreements arose regarding outstanding payments and claims for additional work. In 2007, M/s. Jagannath Choudhury initiated arbitration proceedings, resulting in an award favouring the contractor in 2016. Subsequently, the government contested this award under Section 34 of the Arbitration Act. The District Judge dismissed the government's challenge, prompting them to appeal to the High Court.

Legal Issues:

1. Commencement of Limitation Period for Arbitration: When does the limitation period for arbitration begin?
2. Scope of Judicial Interference in Arbitral Award under Section 34 of the Arbitration Act: What is the scope of judicial interference in arbitral awards under Section 34 of the Arbitration Act?

Decision:

Regarding the limitation issue, Justice Dash stated, "The limitation period for commencing an arbitration begins from the date on which the cause of action accrued, meaning from the date when the claimant first acquired either a right of action or a right to demand arbitration on the dispute concerned." The court clarified that the cause of action arises when the claimant becomes entitled to raise the issue, not necessarily when the dispute itself arises or arbitration is initiated. In this instance, the court found that the arbitrator appropriately addressed the limitation aspect.

Concerning judicial intervention in arbitral awards, the court underscored the restricted scope under Section 34: "The court cannot conduct an independent assessment of the award's merits with the mere possibility of arriving at a different conclusion. The arbitrator alone determines the quality and quantity of evidence." Citing Supreme Court precedents, the court reiterated that interference with arbitral awards should be avoided unless there is a clear and evident illegality that fundamentally affects the case.

Manish Chadda is a professional with a proven track record in valuation, dispute resolution, and sustainable building practices. He holds credentials as a Registered Valuer (IBBI), IIAM Certified Arbitrator, LEED® Green Associate, and IGBC-Accredited professional. He holds a B Tech from Jadavpur university and LLB from AUS