Section 43 of The Arbitration and Conciliation Act, 1996
Limitations.
- (1)The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in court.
- (2)For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred to in section 21.
- (3)Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.
- (4)Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted. STATE AMENDMENT Bihar.Omission of sub-section (3) of Section-43 of the Arbitration and Conciliation Act, 1996.—Sub. by Section-3 of the Section 43 of the said Act shall be omitted. [Vide Bihar Act 20 of 2002, s. 2] 1[PART IA ARBITRATION COUNCIL OF INDIA
Summary
- The Limitation Act, 1963, which sets time limits for taking legal action, applies to arbitration proceedings in the same way it applies to regular court cases.
- For deciding when an arbitration begins under these time limits, the arbitration is officially considered to start on the date when the respondent receives the request to refer the dispute to arbitration, as described in Section 21.
- If an agreement to submit future disputes to arbitration states that a claim is barred unless a step to start arbitration is taken within a certain time limit, the Court can extend this time if it believes that strictly enforcing the limit would cause undue hardship.
- If a court sets aside, which means cancels, an arbitral award, the time spent between when the arbitration started and when the court canceled the award is excluded when calculating the time limit allowed to start a new legal proceeding about that dispute.
Practical examples
FAQ
1. Does a person have an unlimited amount of time to start an arbitration?
No, the Limitation Act, 1963, applies to arbitrations just as it does to regular court cases, meaning you must start the process within the legal time limits specified for your type of dispute.
2. Exactly on what date does an arbitration start for the purpose of calculating time limits?
Under Section 43, which refers to Section 21, the arbitration is deemed to have commenced on the date the respondent receives the request to refer the dispute to arbitration, unless the parties have agreed otherwise.
3. Can a court extend a custom time limit that the parties wrote into their own arbitration contract?
Yes, if the agreement says a claim is barred after a custom deadline and that deadline has expired, a court can extend the time if it finds that strictly enforcing the deadline would cause undue hardship.
4. What happens to the time limit if a court cancels an arbitral award?
The entire period between the day the arbitration started and the day the court set aside the award is excluded, meaning that time is not counted against you when calculating the remaining time you have to start new proceedings for that dispute.
Test yourself
1.Under Section 43 of The Arbitration and Conciliation Act, 1996, which law governs the time limits for commencing an arbitration in India?
2.Under Section 43 of The Arbitration and Conciliation Act, 1996, which cross-references Section 21, on what date is an arbitration deemed to have commenced for limitation purposes if there is no agreement to the contrary?
3.Under Section 43 of The Arbitration and Conciliation Act, 1996, what power does a court have if an arbitration agreement contains a custom clause barring future claims unless a step to commence arbitration is taken within a fixed time?
4.Under Section 43 of The Arbitration and Conciliation Act, 1996, if a court orders an arbitral award to be set aside, how is the time limit for commencing new proceedings on that dispute calculated?