Claims not raised or reserved during final bill acceptance are time-barred despite pending unrelated appeals.

The Petitioner (AAI) challenged an Arbitral Award dated 26.04.2013, which granted several claims to the Respondent.

The relevant work was completed in the late 1990s, the final bill was raised on 16.04.1999, and the Respondent accepted it "under protest" on 28.04.1999.

In a letter dated 16.07.1999, the Respondent specifically limited its protest to two issues: penalty imposition and price escalation under Clause 10CC.

These two issues were finally resolved/waived by AAI in January 2005.

The Respondent invoked arbitration in October 2007, including Claim Nos. 3, 7, 8, 10, 12, and 17, which were never mentioned in the 1999 protest letter.

Simple interest and principal were awarded by the Arbitrator, who ruled that limitation only began in 2005 when the final bill "attained finality".

Whether Claim Nos. 3, 7, 8, 10, 12, and 17 were barred by limitation under the Limitation Act, 1963, given they were raised for the first time years after the final bill.

Whether an Arbitral Award can be partially set aside by severing time-barred claims from valid ones.

The Court applied Section 34 of the Arbitration and Conciliation Act, 1996, specifically regarding awards that conflict with the "public policy of India" due to perversity.

It relied on *J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd.*, which establishes that an acknowledgment of liability saves limitation only for the specific claim acknowledged, not for additional or fresh claims not part of the original demand/bill.

Regarding perversity, it applied *Associate Builders v. DDA*, holding that a finding based on no evidence or ignoring vital evidence is perverse.

Finally, it applied the doctrine of severability as elucidated in *Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited*, allowing courts to set aside "invalid" portions of an award if they are not intrinsically intertwined with the "valid" portions.

The Court found the Arbitrator's reasoning—that limitation for *all* claims was extended until 2005—legally erroneous.

Applying *J.C. Budhraja*, the Court noted that while the protest letter of 16.07.1999 might have preserved limitation for penalty and escalation issues, it could not extend limitation for unrelated claims (3, 7, 8, 10, 12, and 17) that were never articulated or reserved in 1999.

The cause of action for these specific claims accrued in 1999 upon the completion of work and raising of the final bill; thus, raising them for the first time in 2007 was a "clear foul of the period of limitation".

The Court determined the Arbitrator’s finding was "perverse" because it proceeded on "no evidence" regarding any acknowledgment or reservation of these specific claims by the Petitioner.

Utilizing the doctrine of severability, the Court ruled that these claims were distinct and independent from the rest of the Award.

Consequently, the Petition was allowed in part: the findings and grant of Claim Nos. 3, 7, 8, 10, 12, and 17 were set aside as being against public policy (perversity), while the remainder of the Arbitral Award remained undisturbed.

No order as to costs was made.