Supreme Court: Section 12(1) Limitation Act Applies To Petitions U/s. 34(3) Arbitration Act; Excludes Date Of Receiving Award
The Supreme Court dismissed an Appeal related to a dispute over the limitation period for filing an Application to set aside an arbitral award.
The Supreme Court reiterated that Section 12(1) of the Limitation Act applies to the calculation of limitation under Section 34(3) of the Arbitration and Conciliation Act, but excludes the day on which the arbitral award is received.
The Court dismissed an Appeal related to a dispute over the limitation period for filing an Application to set aside an arbitral award. The Appeal arose from an Order of the Chhattisgarh High Court, which had allowed the Respondent's Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act), and held that the Respondent’s application under Section 34 of the said Act was filed within the limitation period.
A Bench of Justice Pamidighantam Sri Narasimha and Justice Prashant Kumar Mishra explained, “Section 34(3) of the ACA stipulates the limitation period for filing an application to set aside an arbitral award as 3 months from the date on which the party receives the arbitral award, which can be further extended by 30 days on sufficient cause being shown.5 At this stage, it is necessary to reiterate that the statutory language of Section 34(3) clearly stipulates the limitation period as “hree months, as opposed to the condonable period as thirty days.”
Advocate Arshdeep Singh Khurana represented the Appellant, while Advocate Rishabh Garg appeared for the Respondent.
Brief Facts
The Parties entered into a contract for bauxite mining and delivery, which led to disputes and an arbitral award in favour of the Appellant. The Respondent filed an application to set aside the award under Section 34 of the Act.
Court’s Reasoning
The Supreme Court stated that the calculation of the limitation period under Section 34(3) of the Act stipulated a 3-month period from the date of receiving the arbitral award.
The Court referred to its decision in My Preferred Transformation & Hospitality Pvt Ltd v. Faridabad Implements Pvt Ltd, wherein it was held that “there is no wholesale exclusion of the provisions of the Limitation Act in calculating the period of limitation under Section 34(3). Rather, each provision’s applicability/exclusion has been individually tested by this Court, on a case-to-case basis.”
Similarly, the Court also referred to its decision in State of Himachal Pradesh v. Himachal Techno Engineers (2010), wherein it was held that “Section 12(1) of the Limitation Act applies while calculating the limitation period under Section 34(3) such that the day from which such period is to be reckoned must be excluded.”
“In the present case, the respondent received a signed copy of the award on 09.04.2022. Since Section 12(1) applies, this date must be excluded and the 3-month limitation period must be reckoned from 10.04.2022…Hence, the benefit of Section 4 of the Limitation Act will inure to the benefit of the respondent,” the Bench stated.
Consequently, the Court held, “Therefore, the respondent’s application under Section 34, which was filed on 11.07.2022, i.e., the next working day of the court, must be considered as being filed within the limitation period. Consequently, there was no delay in filing the application and sufficient cause need not be shown for condonation of delay. The High Court therefore rightly allowed the Section 37 appeal and held that the respondent’s Section 34 application was filed within the limitation period.”
Accordingly, the Supreme Court dismissed the Appeal.
Cause Title: The M/S R.K. Transport Company v. M/S Bharat Aluminum Company Ltd. (BALCO) (Neutral Citation: 2025 INSC 438)
Appearance:
Appellant: AOR SManohar Pratap; Advocates Arshdeep Singh Khurana and Peeyush Bhatia
Respondent: AOR Ravi Raghunath; Advocate Rishabh Garg