Court dismisses appeal citing mandatory statutory period for setting aside arbitral awards under the Arbitration and Conciliation Act, 1996.
In a significant ruling, the Madhya Pradesh High Court, Jabalpur Bench, has dismissed an appeal by Ashish and others against the National Highway Authority of India, emphasizing the strict adherence to the statutory limitation period prescribed for setting aside arbitral awards under the Arbitration and Conciliation Act, 1996. The judgment, delivered by Justice Mr. Deepak Khot on June 16, 2026, underscores the mandatory nature of the three-month limitation period, with an additional grace period of 30 days, for filing applications under Section 34 of the Act.
The appellants, represented by Advocate Shri Yash Nitin Nasery, had filed an application under Section 34 to set aside an arbitral award dated April 12, 2017. Their initial recourse to a writ petition, filed on May 16, 2018, was dismissed, leading them to pursue the correct legal remedy much later. The appellants sought to condone the delay under Section 14 of the Limitation Act, arguing that their pursuit of a writ petition constituted a wrong remedy pursued in good faith.
However, the court, drawing on precedents including the Union of India v. Popular Construction Co., 2001, highlighted the explicit exclusion of further extensions beyond the statutory period as indicated by the phrase "not thereafter" in Section 34(3). The court noted that the appellants failed to file their application within the statutory period or the permissible grace period, thus rendering the delay inexcusable.
Justice Khot emphasized that the principle of exclusion under Section 14 of the Limitation Act requires that the wrong remedy be pursued diligently and in good faith within the prescribed limitation period. The appellants' delay of over a year before filing the writ petition was considered unreasonable, negating the possibility of condonation.
This judgment reaffirms the judiciary's stance on the inviolability of statutory timelines in arbitration cases, ensuring procedural discipline and predictability in legal proceedings. The appeal was consequently dismissed, upholding the decision of the XVIV District Judge, Jabalpur.
Bottom line:-
Arbitration and Conciliation Act, 1996 - Section 34(3) - Delay in filing application for setting aside arbitral award cannot be condoned beyond the statutory period of three months and an additional grace period of 30 days provided under the Act, even if the delay was due to pursuing a wrong remedy.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 - Section 34(3), Limitation Act, 1963 - Section 14
