Jammu and Kashmir government demands strict adherence to arbitration deadlines to avoid financial losses

Jammu and Kashmir government demands strict adherence to arbitration deadlines to avoid financial losses

The Ministry of Law, Justice and Parliamentary Affairs, Government of Jammu and Kashmir has issued a circular stressing the importance of strict adherence to time limits in arbitration proceedings.

The circular noted shortcomings where arbitration cases were not being dealt with expeditiously, leading to serious repercussions. It was often noted that referrals to the Department of Law, Justice, and Parliamentary Affairs were being left until the last minute, thereby jeopardising the validity of appeals against arbitral awards due to expiry of limitation periods.

The Circular noted that such delays, compounded by poorly drafted requests for relief lacking essential details, risked dismissing legitimate appeals and making arbitral awards immediately enforceable without further judicial intervention.

It noted that the Arbitration and Conciliation Act, 1996 imposes strict time limits on various stages of arbitration, including when awards are made and when objections can be filed. It is clear from legal cases such as ‘Assam Urban Water Supply & Sewerage Board versus Subash Projects & Mktg. Ltd.’ And ‘Union of India v. Popular Construction Co.’ (2001) 8 SCC 470 that these terms are crucial and generally cannot be extended.

The circular also stressed that delays in filing appeals under Section 37 of the Arbitration Act, which deals with appealable orders, should be exceptions rather than the rule. Recent judicial decisions, such as ‘Government of Maharashtra vs M/s Borse Brothers Engineers & Contractors Pvt. Ltd.’ emphasize the need for timely action to ensure fair arbitration outcomes.

To address these issues, the circular requires departments to act expeditiously when they receive arbitration notices. They must designate expert officers to handle these cases expeditiously and gather all necessary information for legal review. The legal department must then decide whether to challenge arbitration awards within specific time frames to avoid missing deadlines.

The Department of Law, Justice, and Parliamentary Affairs has outlined specific timelines for various stages of arbitration processes in order to streamline operations. These include deadlines for reviewing arbitral awards, initiating challenges, and processing judicial appeals, aimed at avoiding unnecessary delay or scrutiny.

Click here to read/download the circular