Supreme Court’s Interpretation of Limitation in Arbitration Proceedings

Supreme Court’s Landmark Ruling in MyPreferred Transformation & Hospitality Pvt. Ltd. v. Faridabad Implements Pvt. Ltd.

Civil Appeal No. 336 of 2025 (@ SLP (C) No. 9996 of 2024)

---

Key Takeaways

1. Strict Compliance with Arbitration Deadlines
   The Supreme Court held that petitions under Section 34 of the Arbitration and Conciliation Act, 1996, must strictly adhere to the 3-month limitation period and the 30-day condonable period, with no exceptions for court vacations.

2. Limited Role of Limitation Act
   Only specific provisions of the Limitation Act, such as Sections 4 and 12, apply to arbitration proceedings. Sections like 5, which permit general condonation of delays, remain excluded.

3. Exclusion of General Clauses Act
   Section 10 of the General Clauses Act, 1897, cannot be invoked to extend deadlines in arbitration matters since the Limitation Act governs such proceedings.

4. Legislative Reform Recommended
   The Court urged Parliament to address ambiguities and inconsistencies in arbitration-related limitation laws to better balance justice and procedural fairness.

5. Judicial Clarity on Condonable Period
   The judgment reinforces that the 30-day condonable period in Section 34(3) is rigid and cannot be extended under any circumstances.

---

1. Overview

Supreme Court’s Interpretation of Limitation in Arbitration Proceedings
In a significant ruling on January 10, 2025, the Supreme Court of India provided clarity on the interplay between the Arbitration and Conciliation Act, 1996 (ACA) and the Limitation Act, 1963. It ruled that the condonable 30-day period in Section 34(3) of the ACA is strictly non-extendable, even if it coincides with court vacations. This judgment underscores the importance of adhering to statutory deadlines in arbitration disputes to ensure finality and efficiency.

---

2. Facts of the Case

Parties and Dispute

• Appellants: MyPreferred Transformation and Hospitality Pvt. Ltd.

• Respondents: Faridabad Implements Pvt. Ltd.

• The appellants, tenants under a lease agreement, were awarded an adverse arbitral award dated February 4, 2022. They received a signed copy of the award on February 14, 2022.

Timeline of Proceedings

• The statutory 3-month limitation period under Section 34(3) expired on May 29, 2022.
• The 30-day condonable extension expired on June 28, 2022, during court vacations.
• The Section 34 petition was filed on July 4, 2022, the first day of court reopening, accompanied by an application for condonation of delay.

High Court’s Decision
Both the single judge and division bench dismissed the petition, ruling it barred by limitation as the 30-day condonable period expired during vacation and Section 4 of the Limitation Act did not apply.

---

3. Legal Issues

1. Does Section 4 of the Limitation Act apply to the condonable period under Section 34(3) of the ACA?
2. Can Section 10 of the General Clauses Act extend the condonable period when it expires during court vacations?
3. Is the 30-day condonable period under Section 34(3) of the ACA rigidly non-extendable?

---

4. Court’s Analysis

Applicability of the Limitation Act
The Court ruled that Section 4 of the Limitation Act applies only to the 3-month prescribed period under Section 34(3) of the ACA. It does not extend the 30-day condonable period when it expires on a court holiday.

Exclusion of General Clauses Act
The Court relied on Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd. (2023) to hold that Section 10 of the General Clauses Act is inapplicable since the Limitation Act governs arbitration proceedings.

Judicial Reasoning
The Court emphasized that the ACA’s time limits aim to ensure speedy resolution of disputes. Adhering strictly to these deadlines aligns with the objectives of arbitration.

Concerns Highlighted
The Court expressed reservations about the rigidity of current arbitration limitation laws, suggesting that such strict interpretations may unduly prejudice parties. It urged Parliament to address these concerns.

---

5. Cited Cases

1. Popular Construction Co. v. Union of India

   • Citation: (2001) 8 SCC 470
   • Court: Supreme Court of India
   • Link: Judgment
   • Key Takeaway: Excluded Section 5 of the Limitation Act from extending the 30-day condonable period under Section 34(3).

2. Assam Urban Water Supply & Sewerage Board v. Subhash Projects & Marketing Ltd.

   • Citation: (2012) 2 SCC 624
   • Court: Supreme Court of India
   • Link: Judgment
   • Key Takeaway: Section 4 of the Limitation Act applies only to the initial 3-month period, not to the condonable period.

3. Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd.

   • Citation: (2023) 8 SCC 453
   • Court: Supreme Court of India
   • Link: Judgment
   • Key Takeaway: Section 10 of the General Clauses Act is excluded where the Limitation Act applies to arbitration.

4. State of Goa v. Western Builders

   • Citation: (2006) 6 SCC 239
   • Court: Supreme Court of India
   • Link: Judgment
   • Key Takeaway: Section 14 of the Limitation Act applies to arbitration proceedings, allowing exclusion of time spent in bona fide litigation elsewhere.

5. Sridevi Datla v. Union of India

   • Citation: (2021) 5 SCC 321
   • Court: Supreme Court of India
   • Link: Judgment
   • Key Takeaway: Section 10 of the General Clauses Act can apply in certain contexts but is inapplicable where the Limitation Act governs.

---

6. Judgment/Conclusion - Read Full Judgment

Case Name: MyPreferred Transformation & Hospitality Pvt. Ltd. v. Faridabad Implements Pvt. Ltd.
Case Number: Civil Appeal No. 336 of 2025

The Supreme Court dismissed the appeal, upholding the High Court’s ruling that the Section 34 petition was barred by limitation. The Court reinforced the non-extendable nature of the 30-day condonable period under Section 34(3) of the ACA.

This judgment underscores the importance of statutory deadlines in arbitration proceedings and recommends legislative reforms to address procedural challenges.