A) ABSTRACT / HEADNOTE

The judgment addresses the precise computation of limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996 and clarifies the applicability of Section 12(1) of the Limitation Act, 1963 to arbitral proceedings. The dispute arose from an arbitral award dated 09.04.2022 passed in favour of the appellant, which was admittedly received by the respondent on the same date. The respondent filed an application under Section 34 on 11.07.2022. The controversy centred on whether the limitation period of three months expired on 08.07.2022 or 09.07.2022, and whether exclusion of the date of receipt of the award was permissible.

The Supreme Court reaffirmed that the phrase “three months” in Section 34(3) signifies three calendar months and not ninety days. It held that Section 12(1) of the Limitation Act applies to proceedings under Section 34, thereby mandating exclusion of the date on which the award was received. Consequently, the limitation period commenced on 10.04.2022 and expired on 09.07.2022, which was a court holiday. The benefit of Section 4 of the Limitation Act was therefore available, rendering the filing on the next working day within time.

The Court upheld the High Court’s decision allowing the Section 37 appeal and dismissed the civil appeal. The ruling consolidates jurisprudence on limitation in arbitration and reinforces procedural certainty.

Keywords:
Limitation under Section 34; Three months not ninety days; Section 12 Limitation Act; Court holiday; Section 4 Limitation Act; Arbitration law; Arbitral award

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The judgment emerges from a recurring interpretative conflict concerning limitation under the arbitration regime. Despite repeated judicial clarification, trial courts continue to oscillate between calendar months and fixed days while computing limitation under Section 34(3). The present case provided the Supreme Court an opportunity to restate settled principles while reconciling procedural rigor with legislative intent.

The background dispute traces to a commercial contract executed on 01.04.2002 for bauxite mining and delivery. Payment disputes culminated in arbitration, resulting in a substantial monetary award in favour of the appellant. The respondent’s challenge to the award triggered procedural scrutiny at multiple judicial levels, reflecting the systemic tension between finality of arbitral awards and access to judicial review.

The trial court initially accepted the respondent’s explanation of limitation. However, upon recall, it adopted a hyper-technical view, treating three months as expiring on a working day. This reversal prompted appellate intervention. The High Court relied on Section 12 of the Limitation Act and prior Supreme Court jurisprudence to restore the respondent’s challenge.

The appeal before the Supreme Court thus presented a narrow but significant question. Whether Section 12(1) applies to Section 34 proceedings. Whether exclusion of the date of receipt of the award is permissible. And whether Section 4 can rescue a filing made on the next working day when the limitation expires on a court holiday.

The Court’s analysis is grounded in statutory language, legislative intent, and binding precedent, reinforcing uniformity in arbitration procedure.

D) FACTS OF THE CASE

The appellant and respondent entered into a contractual arrangement on 01.04.2002 relating to bauxite mining and delivery. Disputes arose regarding payment obligations, which were referred to arbitration in accordance with the contractual clause. The arbitral tribunal passed an award dated 09.04.2022 directing payment of ₹51,33,40,100 in favour of the appellant.

It was undisputed that a signed copy of the arbitral award was delivered to the respondent on the same date, namely 09.04.2022. The respondent filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 on 11.07.2022, along with an application seeking stay of execution.

On 13.07.2022, the trial court passed an ex parte order holding that the application was within limitation, since the three-month period expired on 09.07.2022, which was a second Saturday, followed by a Sunday. The respondent was directed to deposit 50% of the awarded sum, which was complied with and later withdrawn by the appellant upon furnishing a bank guarantee.

The appellant challenged this order under Article 227 of the Constitution. The High Court granted liberty to file a recall application. The trial court, upon recall, reversed its earlier view and held that limitation expired on 08.07.2022, a working day, thereby rendering the application time-barred.

The respondent filed an appeal under Section 37. The High Court allowed the appeal, applied Section 12 of the Limitation Act, and held that limitation expired on 09.07.2022. It further applied Section 4, holding the filing on 11.07.2022 as valid.

Aggrieved, the appellant approached the Supreme Court.

E) LEGAL ISSUES RAISED

i. Whether Section 12(1) of the Limitation Act, 1963 applies to proceedings under Section 34 of the Arbitration and Conciliation Act, 1996?
ii. Whether the limitation period of three months under Section 34(3) should be computed as calendar months or ninety days?
iii. Whether the date of receipt of the arbitral award is liable to be excluded while computing limitation?
iv. Whether Section 4 of the Limitation Act applies when the limitation expires on a court holiday?

F) PETITIONER / APPELLANT’S ARGUMENTS

The counsels for the appellant submitted that limitation commenced on 09.04.2022, the date on which the award was received. It was argued that the three-month period expired on 08.07.2022, a working day, rendering the Section 34 application barred.

It was contended that the Limitation Act does not apply to Section 34 proceedings, particularly Section 12. The appellant asserted that in the absence of an application for condonation of delay demonstrating sufficient cause, the filing could not be entertained.

The appellant further argued that Section 4 was inapplicable since limitation expired on a working day. An additional grievance was raised regarding the High Court’s direction permitting deposit of only 50% of the arbitral amount.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondent submitted that Section 12(1) of the Limitation Act squarely applies and mandates exclusion of the date of receipt of the award. It was argued that limitation commenced on 10.04.2022 and expired on 09.07.2022, which was a court holiday.

Reliance was placed on State of Himachal Pradesh v. Himachal Techno Engineers and Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited. It was submitted that Section 4 extended the filing to the next working day.

The respondent also pointed out that the appellant had itself sought deposit of only a part of the amount earlier and could not now demand full deposit.

H) JUDGEMENT

The Supreme Court dismissed the appeal. It held that Section 34(3) uses the expression “three months” distinctly from the “thirty days” condonable period, indicating legislative intent to adopt calendar months. The Court rejected the argument equating three months with ninety days.

The Court relied on My Preferred Transformation & Hospitality Pvt Ltd v. Faridabad Implements Pvt Ltd to reiterate that the Limitation Act is not wholly excluded from arbitration proceedings. Each provision must be tested individually.

Applying Section 12(1), the Court excluded 09.04.2022. The limitation period commenced on 10.04.2022 and expired on 09.07.2022. Since that date was a second Saturday, Section 4 applied, validating the filing on 11.07.2022.

The Court affirmed that no delay occurred and hence no condonation was required. The High Court’s interim directions were left undisturbed.

a) RATIO DECIDENDI

The ratio is that Section 12(1) of the Limitation Act applies to Section 34 proceedings, requiring exclusion of the date on which the arbitral award is received. The limitation period under Section 34(3) is three calendar months, not ninety days. When such period expires on a court holiday, Section 4 of the Limitation Act extends the limitation to the next working day.

b) OBITER DICTA

The Court reiterated the importance of consistency in procedural interpretation and observed that adherence to precedent is as vital as its creation. It also noted that interim financial directions should not ordinarily be interfered with at the appellate stage.

c) GUIDELINES

i. Section 34(3) limitation must be computed in calendar months.
ii. Date of receipt of the award must be excluded under Section 12(1).
iii. Section 4 applies if limitation expires on a court holiday.
iv. Condonation is unnecessary where no delay exists.

I) CONCLUSION & COMMENTS

The judgment strengthens procedural clarity in arbitration. It eliminates ambiguity surrounding limitation computation and reinforces the harmonious application of the Limitation Act to arbitral proceedings. The decision promotes certainty, uniformity, and fairness, preventing arbitrary rejection of challenges on technical grounds.

J) REFERENCES

a) Important Cases Referred

i. My Preferred Transformation & Hospitality Pvt Ltd v. Faridabad Implements Pvt Ltd, 2025 INSC 56
ii. State of Himachal Pradesh v. Himachal Techno Engineers, [2010] 8 SCR 1025 : (2010) 12 SCC 210
iii. Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited, [2023] 4 SCR 361 : (2023) 8 SCC 453
iv. State of West Bengal v. Rajpath Contractors and Engineers Ltd., [2024] 7 SCR 1 : (2024) 7 SCC 257

b) Important Statutes Referred

i. Arbitration and Conciliation Act, 1996
ii. Limitation Act, 1963