Limitation Period Commencing During COVID-19 Pandemic Resumes only from March 1, 2022.

In brief

The question

1. Whether the period of limitation for filing the arbitral claim stood extended/excluded by virtue of the Supreme Court’s suo motu directions regarding the COVID-19 pandemic.

The court held

The High Court dismissed the appeal and upheld the orders of the Sole Arbitrator and the Commercial Court.

It also directed

It held that for causes of action arising during the COVID-19 pandemic, the period of limitation begins to run only from 01.03.2022.

The claim filed by the Respondent was found to be within the limitation period, and no interference was warranted under Section 37 of the Arbitration Conciliation Act.

01Facts

The Respondent (SFAC) provided Venture Capital Assistance of ₹37.70 lakhs to the Appellants.

¶ 6

The final repayment date was extended to 31.12.2020 due to the COVID-19 pandemic.

¶ 8

Upon default, SFAC initiated arbitration to recover ₹32,12,531/-.

¶ 9

The Appellants challenged the claim as time-barred.

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The Sole Arbitrator, via an award dated 07.07.2025, held the claim was within limitation.

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This was upheld by the District Judge (Commercial Court) on 11.03.2026.

¶ 2, 5

02Issues

i.1. Whether the period of limitation for filing the arbitral claim stood extended/excluded by virtue of the Supreme Court’s suo motu directions regarding the COVID-19 pandemic.

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ii.2. Whether a cause of action arising during the pandemic (31.12.2020) entitles the claimant to a full resumption of the limitation period from 01.03.2022.

¶ 15, 19

03Law Applied

The Court applied the binding directions of the Supreme Court of India in Re: Cognizance for extension of limitation (Suo Motu Writ Petition (C) No. 3 of 2020), specifically the orders dated 08.03.2021 and 10.01.2022, which mandated the exclusion of the period between 15.03.2020 and 28.02.2022 for the purposes of limitation in all judicial and quasi-judicial proceedings.

¶ 16

It also relied on the principles articulated in Arif Azim Co. Ltd. vs. M/s Aptech Ltd. and Saipem Triune Engineering Pvt. Ltd. v. Indian Oil Petronas Pvt. Ltd., which clarified that where limitation had not expired before 28.02.2022, the balance period—or the entire period if the cause of action arose during the pandemic—commences from 01.03.2022.

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Provisions in the judgment · 4 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 23 Section 34 Section 37

Negotiable Instruments Act, 1881 Section 138

04Reasoning

The Court noted that the cause of action for repayment arose on 31.12.2020, falling squarely within the pandemic exclusion period defined by the Supreme Court (15.03.2020 to 28.02.2022).

¶ 17

The Appellants argued that limitation should only be excluded until 02.10.2021, but the Court rejected this, citing the final Supreme Court order dated 10.01.2022, which extended the exclusion to 28.02.2022.

¶ 16

The Court reasoned that since the limitation period of three years had not even begun to run—or was "paused"—due to the pandemic, the clock only started ticking on 01.03.2022.

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Consequently, the claim filed on 01.08.2024 was well within the three-year period expiring in 2025.

¶ 9, 12

05Holding

The High Court dismissed the appeal and upheld the orders of the Sole Arbitrator and the Commercial Court.

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It held that for causes of action arising during the COVID-19 pandemic, the period of limitation begins to run only from 01.03.2022.

¶ 19

The claim filed by the Respondent was found to be within the limitation period, and no interference was warranted under Section 37 of the Arbitration Conciliation Act.

¶ 20

LawLens.Delhi High Court

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