Arbitration Act | Court Must First Decide Section 14 Limitation Act Plea Before Adjudicating Objections On Merits: Supreme Court

"Learned Additional Solicitor General is right that only in the event of the Single Judge excluding time and finding the Section 34 application to be within time, that question of consideration on merits would arise." Supreme Court held on Monday that in proceedings challenging an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, the court must first formally adjudicate whether the applicant is entitled to the exclusion of time under Section 14 of the Limitation Act, 1963, after giving due notice to the opposing party, before proceeding to hear the challenge on merits.

A bench comprising Justice K.V. Viswanathan and Justice Arun Palli modified a judgment of the Rajasthan High Court Division Bench which had directly condoned the delay under Section 14 and remitted the matter for adjudication solely on merits.

The dispute arose after an arbitral award was passed by a majority on December 20, 2017, which the respondent challenged before the Rajasthan State Commercial Court under Section 10(1) of the Commercial Courts Act, 2015. On the appellant's objection that the dispute arose out of an international commercial arbitration where the High Court had exclusive jurisdiction, the Commercial Court returned the application under Order 7 Rule 10 CPC. The Single Judge of the High Court subsequently dismissed the re-presented petition as unmaintainable and barred by limitation, but the Division Bench reversed that finding, held that time spent before the wrong forum stood excluded under Section 14 of the Limitation Act, and remanded the matter to the Single Judge to decide on merits.

Whether the Division Bench of the High Court erred in directly granting exclusion of time under Section 14 of the Limitation Act instead of leaving the determination to the Single Judge?

Whether a court adjudicating an application under Section 34 of the Arbitration and Conciliation Act, 1996 must first give the opposite party an opportunity to contest the Section 14 application before entering into the merits of the arbitral award challenge?

Division Bench Erred In Bypassing Single Judge On Limitation Determination

The Supreme Court examined the grievance raised by Additional Solicitor General Aishwarya Bhati, who submitted that the Division Bench, while remitting the matter, ought not to have conclusively applied Section 14 of the Limitation Act. The ASG argued that whether the ingredients of Section 14 were met and whether the Section 34 application was barred by limitation were issues that required consideration by the Single Judge after giving the appellant an opportunity to file objections.

The apex court found substantial force in this argument, emphasizing that the question of limitation is a threshold jurisdictional aspect that precedes any evaluation of an arbitral award's validity.

Threshold Determination Of Limitation Must Precede Merits Adjudication

The Court observed that the consideration of objections against an arbitral award cannot be taken up without a prior, conclusive finding that the Section 34 petition has been presented within the statutory period of limitation.

The bench stressed that when an applicant seeks exclusion of time for having bona fide prosecuted a proceeding before a court lacking jurisdiction, the opposing party has a vested right to contest whether the conditions under Section 14 of the Limitation Act are fulfilled.

The Court held that the Division Bench ought to have left the determination of Section 14 to the Single Judge rather than pre-empting the threshold question and remanding the matter solely for an inquiry on merits.

Opportunity Of Hearing On Section 14 Application Is Mandatory

The bench agreed with the appellant that notice on the Section 14 application, which had been filed along with written submissions before the High Court, was required to be served on the appellant to enable it to file objections before any order excluding time could be validly made.

The bench reiterated that only when the Single Judge excludes the period spent in prosecuting the proceedings before the wrong forum and concludes that the petition is within time, can the court assume jurisdiction to hear the Section 34 application on merits.

The Supreme Court partly allowed the appeal by modifying the Division Bench order, directing the Single Judge to first hear and decide the respondent's Section 14 application after giving due notice and opportunity to the appellant. The Court clarified that only if the Single Judge finds the Section 34 application to be within time after excluding the period will the matter be taken up on merits, requesting the High Court to dispose of the decade-old arbitral challenge expeditiously.

Date of Decision: October 12, 2026

SUPREME COURT OF INDIA - REPORTABLE

Bench:Justice K.V. Viswanathan and Justice Arun Palli

Case No.:Civil Appellate Jurisdiction - CIVIL APPEAL NO. OF 2026 (ARISING OUT OF S.L.P.(CIVIL) NO. 5232 OF 2026)