Headnote

Arbitration – Grounds for annulment of award – Time limit for arbitration proceedings

Summary of facts

The Petitioner and the Respondent were engaged in arbitration. The time for the issuance of the arbitral award expired on 15 March 1993 without the award having been issued. On 25 March 1993, the Respondent filed a memorandum with the arbitrator objecting to the continuance of the arbitration proceedings on the ground that the time for issuance of the award had expired. The arbitrator then petitioned the Court of First Instance for an extension of the time period to render the award, which was granted over the objection of the Respondent. The Respondent then participated in the continuing arbitral process and the arbitrator issued his award in favour of the Petitioner on 27 July 1993. The Petitioner sought ratification of the award, and the Respondent cross-claimed for annulment on the ground, inter alia, that the award was invalid for having been issued after the expiration of the time limit for the award. The lower courts ratified the award. The case then went up to the Court of Cassation on different grounds, was remanded and then came back up again before the Court of Cassation.

Held

The award was annulled.

Pursuant to Article 210 of the Civil Procedure Code, the period for the issuance of the award may be extended by the parties, the arbitrator or the courts, provided that the extended duration is uninterruptedly linked to the previously set period, otherwise such extension will not be effective. The extension of the period to render an award cannot occur after the expiry of the previously set period.

Judgment

Although the arbitration period set in the arbitration agreement was extended more than once by agreement of both parties in some instances and by a decision of the court in other instances, ended on 15 May 1993. The papers of the case provide no evidence of its extension, whether by implicit or explicit agreement of both parties or by a decision rendered by the court, from 15 May 1993 to 25 May 1993, which is the date on which the Respondent expressly contested the validity of the arbitration for being out of time before the arbitrator. Such claim was presented at its proper time and the validity thereof was verified and cannot be dismissed on the ground that the Respondent tackled the subject matter of the dispute in the same memorandum in which they maintained the said claim for annulment, as this was done by way of precaution.

Thus, the said claim shall be sustained, the effect of which shall be the annulment of the arbitration agreement owing to lapse of time. This fact is not affected by the decision of the Court of First Instance of 25 April 1993 extending the time to issue the award by an additional three months from the date of the decision, on the basis that it was rendered by agreement of both parties. The reality recorded in the minutes of the Court’s hearing on whether or not the period decided by the Court is uninterruptedly linked to the previous period is that the Petitioner's attorney objected – before the Court – to the arbitrator’s extension request and that such extension was granted after the expiry of the previous arbitration period on 15 May 1993. Therefore, the Court’s decision for further extension has no effect on the expired period of arbitration.

The arbitrator issued his award on 27 July 1993, which was beyond the predetermined period of the arbitration ending on 15 March 1993. Hence, the given award is null and void in application of the content of Article 216.1 of the Civil Procedure Code.