The Supreme Court of India recently clarified that an application to set aside arbitral award must be made within the strict statutory timeline and this timeline cannot be extended thereafter by using the provision of “sufficient cause” under the Limitation Act, 1963 (“Act”).
The Court interpreted the applicability of Section 5 (extension of prescribed period in certain cases) and Section 14 (exclusion of time of proceeding bona fide in court without jurisdiction) of the Limitation Act, 1963 to proceedings under Section 34 proceedings of the Arbitration and Conciliation Act, 1996.
The Court said that Section 34 excludes the application of Section 5 of the Act, thereby barring an extension beyond the statutory three-month period and the extendable 30-day outer limit. However, it ruled that Section 34 does not exclude the application of Section 14 of the Act where time spent bonafide in courts without jurisdiction could be excluded while computing the statutory period for challenge.
The Court also held that “Administrative difficulties would not be a valid reason to condone a delay above and beyond the statutory prescribed period under Section 34.”
