Limitation under Section 34 of the Arbitration Act Commences Only Upon Disposal of Section 33 Application: SC

The Supreme Court in National Highway Authority of India v. T. Younis & Anr. (Civil Appeal arising out of SLP (C) No. 7570 of 2024), decided on June 2, 2026, held that once the arbitral tribunal’s jurisdiction is formally invoked under Section 33 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) and such request remains pending, limitation under Section 34(3) commences only from the date of disposal of the Section 33 request; the statute does not require the Section 33 request to be ultimately allowed or adjudged maintainable for this consequence to follow.

The dispute arose from the acquisition of land under the National Highways Act, 1956, for a highway project in Bellary District, Karnataka. Following remand of an earlier arbitral award, the arbitrator passed a fresh award granting the landowners benefits under Sections 23 and 34 of the Land Acquisition Act, 1894. Aggrieved by the grant of such benefits, the National Highways Authority of India (“NHAI”) filed an application under Section 33(1)(a) of the Arbitration Act seeking correction of the award, while the landowners simultaneously filed an application under Section 33(4) of the Arbitration Act seeking an additional award.

Both applications were dismissed by a common order, following which NHAI instituted proceedings under Section 34 of the Arbitration Act. The High Court, however, held that the application filed by NHAI under Section 33(1)(a) of the Arbitration Act was not maintainable and consequently refused to compute the limitation under Section 34(3) of the Arbitration Act from the date of disposal of the Section 33 of the Arbitration Act applications, resulting in the dismissal of the Section 34 of the Arbitration Act proceedings as time-barred. NHAI contended that once applications under Section 33 of the Arbitration Act had been filed by both parties and entertained by the arbitral tribunal, limitation under Section 34(3) of the Arbitration Act could commence only upon their disposal. It was further submitted that the issue stood concluded by the Supreme Court’s earlier decisions, including Geojit Financial Services Ltd. v. Sandeep Gurav. The respondents, on the other hand, argued that the application filed by NHAI under Section 33(1)(a) of the Arbitration Act was, in substance, an impermissible attempt to review the award and, being not maintainable, could not extend the period of limitation under Section 34(3) of the Arbitration Act.

The Supreme Court observed that Section 34(3) of the Arbitration Act expressly provides that where a request has been made under Section 33 of the Arbitration Act, the limitation for filing an application under Section 34 commences from the date on which such request is disposed of. It held that the provision does not distinguish between applications that are ultimately allowed or dismissed, nor does it restrict the benefit only to applications subsequently found to be maintainable. The Court held that once the jurisdiction of the arbitral tribunal is formally invoked under Section 33 of the Arbitration Act and the proceedings are entertained, parties cannot be compelled to institute proceedings under Section 34 of the Arbitration Act merely as a matter of abundant caution during the pendency of such proceedings. The Court further distinguished State of Arunachal Pradesh v. Damani Construction Co., observing that the said decision concerned a mere communication seeking review and not a formal application under Section 33 of the Arbitration Act. At the same time, the Court clarified that where applications under Section 33 of the Arbitration Act are found to be sham, frivolous or mala fide and intended solely to defeat limitation, courts would be justified in imposing exemplary costs.

Accordingly, the Supreme Court set aside the judgement of the Karnataka High Court, restored the order condoning delay passed by the principal district and sessions judge, Ballari, and directed that the applications under Section 34 of the Arbitration Act be decided on their own merits in accordance with law.