A limitation objection not raised before the arbitral tribunal cannot be raised for the first time under Section 34.

The petitioner awarded the respondent contracts for the supply and erection of pre-engineered buildings at its transformer manufacturing unit, initially for ₹12.50 crore and subsequently for additional works, taking the aggregate contract value to approximately ₹13.48 crore.

The respondent claimed that the work was completed and handed over in January 2012, but the petitioner alleged substantial defects, including water leakages, delays and incomplete works.

The respondent raised a final invoice for ₹1,23,75,000 on 12 March 2014. The petitioner disputed the respondent’s entitlement and, by letter dated 14 August 2014, alleged delay and defective performance and reserved its right to claim liquidated damages.

The respondent invoked arbitration on 4 March 2017. An arbitral tribunal awarded the respondent ₹1,23,75,000 with 9% interest and costs.

The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, alleging limitation, denial of opportunity to present its case, expiry of the tribunal’s mandate, and absence of adequate reasons.

Section 34 of the Arbitration and Conciliation Act permits interference with an arbitral award only on the limited statutory grounds specified therein; the court does not sit as an appellate court, reappreciate evidence or substitute a plausible arbitral view with its own.

A limitation objection is ordinarily a mixed question of law and fact and must be raised before the arbitral tribunal at the first opportunity; failure to do so may amount to waiver and ordinarily precludes its introduction for the first time in Section 34 proceedings, applying International Breweries (P) Ltd. v. Kalpana International Breweries Ltd.

Section 34(2)(a)(i) concerns legal incapacity affecting a party’s ability to enter into the arbitration agreement, such as minority or mental incapacity, and does not include internal managerial or administrative difficulties, following Delhi Jal Board v. Reliable Diesel Engg. (P) Ltd.

Section 18 requires equal treatment and a full opportunity to present one’s case; Section 34(2)(a)(iii) applies only where the party was not given proper notice or was otherwise genuinely prevented from presenting its case.

Under Section 25, the tribunal may proceed where a party fails to file its defence or repeatedly defaults despite notice and opportunity.

The tribunal’s mandate under Section 29A may be extended by consent or by the competent court, and statutory exclusions recognised by the Supreme Court may also be taken into account.

The Court held that the limitation challenge could not be raised for the first time under Section 34 because the petitioner had filed neither a statement of defence nor a limitation objection before the tribunal.

In any event, the tribunal’s conclusion was considered plausible: the petitioner’s letter dated 14 August 2014 treated the contractual relationship as subsisting by referring to outstanding defects, rectification efforts and continuing disputes regarding the project.

The tribunal therefore treated that communication as crystallising the dispute and found the 4 March 2017 invocation to be within three years.

The Court declined to reappreciate the correspondence, minutes of meetings and evidence supporting that conclusion.

The petitioner was also not legally “incapacitated”; internal management disputes did not affect its legal capacity to arbitrate.

Nor was it denied a fair opportunity: it received repeated notices, was granted time to file its defence and counterclaim, appeared through different counsel on several occasions, and was warned that the proceedings would continue under Section 25.

Its failure to file pleadings, pay its share of fees or secure proper authorisation was attributable to its own defaults, not to procedural unfairness by the tribunal.

On the mandate issue, the Court found that the tribunal’s mandate was extended first with the respondent’s consent, then by the High Court, and was further protected by the Supreme Court’s orders extending or excluding limitation periods during the relevant period.

The award was therefore not shown to be unreasoned, perverse or patently illegal within the narrow scope of Section 34.

The award of ₹1,23,75,000, together with 9% interest and costs of ₹6,60,500 and ₹3,00,000, was left undisturbed.

The petitioner’s bank guarantee furnished for the awarded amount was directed to be released in favour of the respondent within four weeks from pronouncement of the judgment.