Arbitration Act | Single Judge Must First Decide Section 14 Limitation Act Plea Before Hearing Challenge On Merits: Supreme Court

"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." Holding that an adjudication on the merits of an arbitral challenge cannot bypass the threshold determination of limitation, the Supreme Court bench of Justice K.V. Viswanathan and Justice Arun Palli on October 12, 2026 ruled that a Single Judge must first hear and determine the applicability of Section 14 of the Limitation Act, 1963 after putting the opposing side on notice before delving into a challenge under Section 34 of the Arbitration and Conciliation Act, 1996.

The dispute stemmed from an arbitral award rendered on December 20, 2017, which Continental Engineering Corporation challenged before the Rajasthan State Commercial Court under Section 10(1) of the Commercial Courts Act, 2015. On an objection raised by Jaipur Metro Rail Corporation that the dispute involved an international commercial arbitration, the Commercial Court returned the petition under Order 7 Rule 10 CPC for presentation before the High Court. While the Single Judge subsequently dismissed the re-presented plea for improper filing and limitation bar, the Division Bench of the High Court reversed that order, unilaterally granted exclusion of time under Section 14 of the Limitation Act, and remanded the matter to the Single Judge for adjudication on merits.

Whether the Division Bench could directly extend the benefit of Section 14 of the Limitation Act, 1963 to condone delay without relegating the parties to the Single Judge to test the statutory ingredients after giving due notice to the opposing side?

Whether an application under Section 34 of the Arbitration and Conciliation Act, 1996 can be remanded for hearing on merits prior to a conclusive finding by the court of first instance that the challenge is within limitation after excluding time?

The Supreme Court observed that the procedural course adopted by the Division Bench in directly condoning delay while remanding the arbitral challenge was legally unsustainable.

Section 14 Limitation Act inquiry must precede merits adjudication

The bench emphasized that the question of whether a party prosecuted proceedings bona fide with due diligence before a forum lacking jurisdiction requires factual and legal scrutiny by the court hearing the petition.

The Court noted that such threshold objections strike at the very maintainability of the petition under Section 34 of the Arbitration and Conciliation Act, 1996.

"We are of opinion that those are matters which should have been left to the Single Judge to decide first before hearing the Section 34 on merits. 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," the Court stated.

Opposite party entitled to notice and opportunity to contest exclusion of time

The Court accepted the submission advanced by the Additional Solicitor General that the ingredients of Section 14 ought to be contested by the adversary through formally placed objections.

The bench held that when an application seeking exclusion of time is placed on record along with written submissions, the opposing litigant cannot be deprived of the right to contest whether the statutory requirements under Section 14 are satisfied.

"Hence, while not disturbing the remand of the matter for adjudication to the Single Judge, we direct that the learned Single Judge before taking up the Section 34 application should first hear the Section 14 application after due notice to the appellant, and only in the event of finding that after excluding time, the Section 34 application of the respondent was within time, proceed to hear the matter on merits," the bench ruled.

Modifying the judgment of the Division Bench, the Supreme Court directed the learned Single Judge to issue notice to Jaipur Metro on the Section 14 application, decide the issue of limitation first, and proceed to the Section 34 challenge on merits only if the petition is found to be within limitation. Noting that the award was rendered in 2017, the apex court requested the Single Judge to endeavor to take up and decide the matter expeditiously.

Date of Decision: October 12, 2026