In short. Arbitration claims have time limits just like court cases. Section 43 of the Arbitration and Conciliation Act, 1996 makes the Limitation Act, 1963 apply, so for most money claims you get three years from the cause of action. Your claim is saved on the day the other side receives your Section 21 notice invoking arbitration. Forming the tribunal can come later. Then there are fresh deadlines for the Section 11 petition, for a Section 34 challenge, and for execution. If your claim is already past the two-year mark, send the notice now. Today.
Is this your situation?
- There's an arbitration clause in your contract, and the fight with the other side started more than two years ago.
- You've been in talks for months. Every meeting ends with a promise. Nobody has told you whether time is still running.
- Their reply, or their statement of defence, says in one line that your claim is time-barred.
- You sent a notice invoking arbitration. No arbitrator was ever appointed, and the file has been sitting in a drawer since.
- The claimant's case is already moving, and you want to bring a counterclaim of your own.
- A court set aside your award last month. You're wondering whether you can start all over again.
- You won the award a while back but haven't done anything to enforce it yet.
The short answer on limitation in arbitration
The basic position is simple. Section 43(1) of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 to arbitrations the way it applies to court cases. An unpaid invoice, money for work done, damages for breach: in most cases you have three years. If a claim would be thrown out as time-barred at Saket or Tis Hazari, an arbitrator will throw it out too.
There's one real difference, and it's about the date your claim counts as made. In a suit you file a plaint in court, and that filing date stops the clock. Arbitration has no court filing at the start. Section 43(2) treats the arbitration as commenced on the date Section 21 fixes, which is the date the other side receives your written request to refer the dispute to arbitration. That notice saves your claim. Not the first hearing. Not the arbitrator's appointment.
And limitation doesn't go away after that. It turns up again at every stage. You get three years to ask the court to appoint an arbitrator, three months (plus up to 30 days) to challenge the award, a fixed period for appeals, and twelve years to execute a domestic award. Businesses that watch only the first date often lose money at one of the later ones. We see it every year.
What Section 43 and the Limitation Act actually say
Section 43(1), Arbitration and Conciliation Act, 1996
The Limitation Act, 1963 applies to arbitrations as it applies to court proceedings. That brings in the whole Act. The three-year periods in its Schedule come with it, along with the rules on when time starts and the provisions that restart or exclude time.
Section 43(2) with Section 21
For limitation purposes, an arbitration is deemed to have commenced on the date referred to in Section 21. Unless the parties agreed otherwise, that's the day the respondent receives the request for the dispute to be referred to arbitration. What the notice should say is covered in our post on invoking an arbitration clause with a Section 21 notice.
Section 43(3)
Some contracts bar a claim unless arbitration starts within a short period, say 90 days of the final bill. If a clause like that would cause undue hardship, the court can extend time on terms. Separately, Section 28 of the Indian Contract Act, 1872 makes void many clauses that wipe out rights once a period shorter than the law allows has gone by. So never take a short contractual cut-off at face value.
Section 43(4)
When a court sets aside an award, the time between the commencement of the arbitration and the date of the court's order is left out when limitation is worked out for fresh proceedings on the same dispute.
Articles 14, 18, 55, 113 and 137, Schedule to the Limitation Act, 1963
Each of these gives three years. Article 14 covers the price of goods sold and delivered, Article 18 the price of work done, Article 55 breach of contract, and Article 113 most other suits. Then there's Article 137, which gives three years for any application with no period of its own. The Supreme Court has used it for Section 11 petitions.
Sections 14, 18 and 19, Limitation Act, 1963
Under Section 18, a written, signed acknowledgment of liability made before the period runs out starts a fresh period. Section 19 does the same for a part payment made before expiry. And under Section 14, time spent in good faith pursuing the same claim in a forum that had no jurisdiction can be excluded.
When does the three years start?
From the day the cause of action arises. That's the first day you could have gone to court on the claim. It doesn't start from the day you send a notice, and it doesn't wait for an arbitrator to be appointed. The Supreme Court put it plainly in Panchu Gopal Bose v. Board of Trustees for Port of Calcutta (1993): time for an arbitration claim runs from when the claim accrued, exactly as it would for a suit. A notice sent years later doesn't create a fresh cause of action.
For an unpaid invoice, the cause of action usually arises when payment fell due under the contract. Say the purchase order gives 60 days' credit. The clock starts on day 61, not the invoice date. In a works contract, it's usually the date the final bill became payable, or the date it was rejected in writing. A damages claim runs from the breach. Where the breach carries on day after day, though, a fresh period can begin each day.
Running accounts trip people up. Article 1 of the Limitation Act deals with a mutual, open and current account where there have been reciprocal demands. For that kind of account, the three years run from the close of the year in which the last item admitted or proved was entered. Very few supplier ledgers fit. You sell, they pay. That's one-way traffic, not a mutual account. So the fact that a ledger in Tally still shows old invoices doesn't keep them alive. Usually it doesn't.
Retention money, bank guarantees and security deposits each have their own starting point. Retention usually falls due when the defect liability period ends or a completion certificate is issued. A claim over wrongful encashment of a bank guarantee usually arises on the date of encashment. Read the payment clause before you count a single day.
Where the clock usually starts in everyday business disputes
| What you're claiming | Article of the Limitation Act that usually applies | The three years usually run from |
|---|---|---|
| Unpaid price of goods sold on credit | Article 15 (goods sold on a fixed period of credit) or Article 14 | The day the credit period ends |
| Unpaid fees for services or works | Article 18 (price of work done) | When the work is finished, unless the contract gives a later payment date |
| Final bill under a construction contract | Article 18 or Article 55 | When the final bill falls due or is rejected in writing. If it's unclear, plead both dates |
| Damages for breach of a supply or service contract | Article 55 | The date of breach, or each day of a breach that keeps going |
| Refund of an advance paid for goods that never came | Article 47 or Article 113, depending on the facts | When it becomes clear there'll be no supply, usually the agreed delivery date or a refusal |
| Wrongful encashment of a bank guarantee | Article 55 or Article 113 | The day it was encashed |
| Release of retention money | Article 113, or whatever the contract provides | End of the defect liability period, or the date the completion certificate issues |
| Shareholder or partnership dispute under an agreement | Article 113 or a specific article | When the right to sue first accrues. Get advice on your facts |
Which date stops the clock?
Your notice does. Section 21 says the arbitration starts on the day the respondent receives a request to refer the dispute to arbitration. Take a claim that expires on 31 March. If a valid notice reaches the respondent on 30 March, you're safe. It doesn't matter that the arbitrator only gets appointed the following year. A notice you post on 30 March that lands on 2 April, though, may have come too late.
That makes the proof of delivery as important as what the notice says. Use speed post with tracking. Use a courier that gives a delivery report. Email it too, to whatever addresses the contract gives. Print the tracking page and keep it on file. If the notice clause names a specific address or officer, send it there and nowhere else. Mail it to a Nehru Place office the company moved out of two years ago and you've handed them an argument that it never arrived.
The notice also decides which claims are protected. If it describes the disputes broadly, with the invoices and the amounts, those claims are safe. A head of claim that first shows up in the statement of claim months later may be treated as made on that later date. Put every dispute you might want decided, interest and damages included, into the Section 21 notice itself.
Contracts sometimes change the default rule. Section 21 opens with the words unless otherwise agreed by the parties. So a clause saying arbitration commences when a request is filed with an institution, or when the arbitrator is appointed, can move the date. If your clause sends disputes to an institution such as DIAC, read that institution's rules on when an arbitration commences, and file to match.
Do settlement talks or reminders buy you time?
Usually not, though many business owners assume otherwise. Courts have been firm on this. Geo Miller and Co. v. Chairman, Rajasthan Vidyut Utpadan Nigam (2019) allows the negotiation period to be left out only in limited cases. The whole history of the talks must be placed on record, and the negotiations must have been genuine and before the claim was asserted. B and T AG v. Ministry of Defence (2023) was stricter still. Mere negotiations, the Court held, don't push back the cause of action. It declined to appoint an arbitrator for a claim that was more than five years old.
Chasing payment won't save you. You could send a reminder on the first of every month for three years and limitation would carry on regardless. Under Sections 18 and 19 of the Limitation Act, only two things restart time: the debtor admitting the debt in writing, or the debtor paying part of it. The admission has to be made before the three years are up. It must also be signed by the debtor or someone authorised to act for it. An email from their finance head saying the amount is pending and will be released next quarter will usually do. A reply that says we are looking into it won't.
Multi-tier clauses create their own trap. Plenty of contracts say the parties will negotiate for 30 days, then escalate to senior management, then try mediation, and only then go to arbitration. Time keeps running all the while. If limitation is close, send the Section 21 notice anyway, and say you're still willing to finish the pre-arbitration steps. Courts have generally treated those steps as directory where insisting on them would kill the claim. We wouldn't test that on a claim worth crores.
When Advocate B.K. Singh picks up a file where talks have dragged on, he asks for one thing first. The last document the other side signed or emailed that admits any part of the debt. That one document often decides whether there's anything left to arbitrate. Quite often the client finds it in a WhatsApp chat or an email thread they'd forgotten about.
What restarts or pauses the clock, and what doesn't
- Restarts: a written acknowledgment. A signed letter, an email, a balance confirmation or a reconciliation from the debtor that admits liability, made before expiry, gives you a fresh three years from its date (Section 18).
- Restarts: a part payment. Any payment towards the debt before expiry gives a fresh three years from the date it was paid (Section 19). Hang on to the bank statement that shows the narration.
- Pauses: going to the wrong forum in good faith. Time spent diligently chasing the same relief before a court or tribunal that had no jurisdiction can be excluded under Section 14. The Supreme Court has applied this in arbitration matters.
- Pauses: the pandemic period. The Supreme Court's suo motu orders excluded 15 March 2020 to 28 February 2022 for limitation, arbitration timelines included. If your claim dates from 2018 or 2019, work the dates out again with this in mind.
- Doesn't restart: your own reminders. Your letters, emails and phone calls asking to be paid do nothing for limitation. It doesn't matter if there are fifty of them.
- Doesn't restart: a vague reply. If they deny liability, or say the matter is under review, that isn't an acknowledgment.
- Doesn't pause: negotiation. Meetings and draft settlements don't stop time, apart from the narrow situation the Supreme Court described in Geo Miller.
- Doesn't pause: a contractual escalation ladder. Time runs while you climb the steps a multi-tier clause sets out, unless a court decides otherwise on unusual facts.
Is there a separate deadline for going to court under Section 11?
Yes, and people forget it. Your notice goes unanswered, or the other side simply refuses to agree on a name. The remedy then is a petition to the High Court under Section 11. No period is written into the Act for that petition. The Supreme Court filled the gap with Article 137 of the Limitation Act, which allows three years. BSNL v. Nortel Networks (2021) confirmed this. The same judgment lets a court decline to appoint anyone where the claims are ex facie time-barred, in other words obviously dead from the papers alone.
Arif Azim Co. Ltd. v. Aptech Ltd. (2024) added detail. The three years for a Section 11 petition, the Supreme Court said, don't start until a valid notice invoking arbitration has been sent and the other side has failed or refused to appoint within the time it had. The Court also split the inquiry in two, which people often miss. Is the Section 11 petition itself in time? And are the claims in time? You need a yes to both.
SBI General Insurance Co. Ltd. v. Krish Spinning (2024) followed within months. In it the Court told referral courts to deal with the first question only. Whether the claims themselves are in time is for the arbitrator, unless they're obviously dead. In practice, then, the Delhi High Court will normally appoint an arbitrator and leave the limitation argument to be fought before the tribunal. For the rest of what a Section 11 petition involves, see when you can go to court under Section 11.
The real danger is the claimant who sends a notice, hears nothing back, and then does nothing. The notice saved the claim. Meanwhile the right to ask the court for an arbitrator is quietly running out. Diarise the date three years after the respondent's time to appoint expired. Then file well before it.
Who decides whether a claim is time-barred, and when?
The arbitrator. Indian Farmers Fertiliser Cooperative Ltd. v. Bhadra Products (2018) settled that limitation is about whether the claim is admissible, not about the tribunal's jurisdiction under Section 16. The tribunal can take it up first as a preliminary issue and pass an interim award under Section 31(6). Or it can hold it over and deal with it in the final award, together with the merits.
Where it's a straightforward question of dates, ask the tribunal to decide limitation before anything else. An interim award on that point can be challenged under Section 34 like any other award, so it gets settled early. Nobody wastes months on evidence for claims that may be dead. Where the facts are contested, say whether the person who signed an acknowledgment had authority, or whether a breach really continued, tribunals usually take it up with the evidence.
A respondent should plead limitation in its statement of defence claim by claim, with the dates it relies on. One general sentence saying the claims are time-barred is weak. Tribunals tend to brush it aside. The claimant, for its part, should answer in the rejoinder with its own chart of dates, acknowledgments and payments. Don't leave that work for final arguments.
Counterclaims, MSME references and contractual time bars
Counterclaims run on their own clock. State of Goa v. Praveen Enterprises (2011) is the case to know. For a counterclaim, the Supreme Court said, the date that ordinarily counts is when it's actually raised before the arbitrator. The exception is where the respondent had already sent its own notice invoking arbitration on that dispute. So if you're the respondent and the claimant's case is moving at a snail's pace, your counterclaim can quietly die. If it's close to three years old, send a Section 21 notice for it this week rather than holding it back for the defence.
MSME references start differently. A micro or small supplier that goes to the MSME Facilitation Council first goes through conciliation, where the Supreme Court has held the Limitation Act doesn't apply. Then comes arbitration, where it does. We explain the two-stage rule in our post on the time limit for an MSME delayed payment claim.
Be suspicious of short contractual deadlines. You'll find them in a lot of government and infrastructure work: the contractor gives up any claim it hasn't taken to arbitration within 90 or 120 days of the engineer's decision, or some such period. Section 28 of the Contract Act was amended in 1997. Since then, a clause that kills off a right once a stated period ends is generally void to that extent, and many such clauses have failed in court. On top of that, Section 43(3) allows a court to give more time where the contractual bar would cause undue hardship. We still wouldn't bank on being rescued. If the contract gives you a period, try hard to meet it.
How to check whether your claim is still in time
This is the limitation check we run before any notice leaves our office. Run it again whenever a new document turns up.
Take each claim separately
List every head of claim: each unpaid invoice, the final bill, retention, damages, interest and costs. Limitation is tested claim by claim, not for the dispute as a whole. One total on a page hides the problem.
Fix the cause of action date for each one
Use the contract's payment clause, the delivery or completion records and any written rejection to work out when each claim first became enforceable. Where two dates are possible, write down both. Plan around the earlier one.
Find every acknowledgment and part payment
Go through emails, signed reconciliations, balance confirmations, minutes of meetings and bank statements. Note who signed and when. Then check that each one came before the period it's supposed to save had run out.
Apply the exclusions
Leave out 15 March 2020 to 28 February 2022 where it applies, and any time spent in good faith before a wrong forum. Write down the new last date for each claim.
Serve the Section 21 notice and keep proof it arrived
Describe every dispute and amount, name your proposed arbitrator or the institution, and send it by tracked post, courier and email to the addresses in the contract. When Advocate B.K. Singh drafts these notices close to a deadline, he sends them by every permitted mode on the same day and puts the tracking reports in the brief. The respondent's first defence, very often, is that the notice never came.
Diarise the Section 11 deadline
If the other side doesn't appoint within the period in the clause, or 30 days where Section 11 applies, the three years for a court petition begin. Put that date in two people's calendars. Not one.
Deadlines after the award: correction, challenge, appeal and enforcement
| Stage | Time limit | Costs, in general terms (lawyers' fees not shown) |
|---|---|---|
| Asking for a correction or an additional award (Section 33) | 30 days from receiving the award, unless the parties agreed a different period | Usually just the tribunal's time. Check the terms of reference |
| Challenging the award (Section 34) | 3 months from receiving the signed award, plus up to 30 days on sufficient cause. No further extension under Section 5 of the Limitation Act (Union of India v. Popular Construction, 2001) | Court fee under the state schedule. In commercial matters the petition goes to the Commercial Court or the Commercial Division |
| Appealing a Section 34 order (Section 37) | 60 days in commercial disputes under Section 13(1A) of the Commercial Courts Act, 90 days otherwise. Delay is condoned only by way of exception (Government of Maharashtra v. Borse Brothers, 2021) | Court fee on the appeal, plus certified copies |
| Executing a domestic award (Section 36) | 12 years under Article 136 of the Limitation Act, from the date the award becomes enforceable | Execution court fee and process fees. Check the current schedule |
| Enforcing a foreign award (Sections 47 to 49) | 3 years under Article 137 from the date the right to apply accrues (Government of India v. Vedanta, 2020) | Court fee, and translation and certification of the award |
| Special leave petition to the Supreme Court | Ordinarily 90 days from the High Court's order | Filing through an Advocate-on-Record, and the court fee |
If the award is set aside, can you start again?
Often you can, thanks to Section 43(4). The time between the start of the first arbitration and the court's setting-aside order isn't counted when you work out limitation for a new arbitration, or a suit, on the same dispute. So a claim that was alive when the first notice went out doesn't die just because the award collapsed years later.
But the exclusion doesn't cover everything. Time that had already run before the first notice still counts, and the clock starts again from the date of the setting-aside order. Say your first notice went out two years and ten months after the cause of action. After the order, you've got about two months left. Many claimants assume they get a fresh three years. They lose the claim a second time.
One more thing has changed recently. The Constitution Bench decided Gayatri Balasamy v. ISG Novasoft in 2025, and since then a Section 34 court can, in a limited way, modify an award rather than setting it aside. Cutting out an invalid portion is the typical case. Where a court knocks out only a portion of the award, Section 43(4) helps only with that portion. Our post on how to challenge an arbitral award under Section 34 goes into the grounds and the deadline.
An invented example: a Faridabad HVAC contractor and a Gurugram developer
This is a made-up example, not a real client. A Faridabad HVAC contractor finished the air-conditioning and ducting work in a Gurugram office tower for a developer in January 2022. Under the contract, the developer had 45 days to certify and pay the final bill. The contractor submitted its final bill of Rs 1.4 crore on 10 February 2022. The developer neither paid it nor rejected it. Meetings went on through 2023 and 2024. The contract had an arbitration clause, seat in New Delhi.
Start counting from when payment was due. Forty-five days from 10 February puts the final bill's due date in late March 2022. The pandemic exclusion had already ended on 28 February 2022, so it's no use here. Three years from late March 2022 takes you to around late March 2025. All those meetings changed nothing. What did change things was an email in October 2024. The developer's project head sent a statement admitting Rs 92 lakh as due and disputing everything else.
The October 2024 email counts as an acknowledgment, but only for Rs 92 lakh. For that sum, a new three-year period starts in October 2024. Nothing restarts for the Rs 48 lakh in dispute. Now suppose the contractor only gets round to its Section 21 notice in November 2026. The Rs 92 lakh survives. The Rs 48 lakh is very likely gone. A notice in early 2025 would have kept both alive. And if the developer argues limitation, it's the tribunal that rules on it, not the High Court.
Papers that show your claim is in time
- The signed contract or purchase order, with its payment clause, arbitration clause and notice clause
- Invoices, final bills, measurement books or completion certificates that show when each amount fell due
- Any rejection, deduction note or dispute letter the other side sent, with its date
- Anything signed by them that admits the debt: emails, balance confirmations, reconciliations, minutes
- Bank statements showing every part payment, with dates and narrations
- Your Section 21 notice, with the postal receipts, courier delivery reports and email delivery records
- Their reply to the notice, if any, and proof of when their time to appoint ran out
- Orders from any earlier court or tribunal case on the same claim, for exclusion under Section 14 or Section 43(4)
- A date chart, claim by claim, with the cause of action, each acknowledgment and the last date
How good claims end up time-barred
In our experience, most limitation fights in arbitration come down to a missing piece of paper, not a fine point of law. The commonest mistake is waiting for the talks to work. An owner who trusts a long relationship with a customer keeps meeting, keeps accepting assurances, and never asks for anything in writing. Three years go by. One short email from the customer admitting the balance, requested politely at the right moment, would have saved the claim. Ask for that email whenever a meeting ends with a promise to pay.
Next comes the notice sent too late, or to the wrong place. A notice dispatched in the last week, by ordinary post, to an address the company left long ago, is about the weakest start possible. Close behind is the notice that mentions only the principal. Damages and interest get left out, and the claimant tries to add them in the statement of claim a year later.
Respondents get it wrong as well. Some leave limitation out of the defence and spring it at final arguments, when tribunals are much less receptive. Some let a counterclaim expire. And a lot of award holders, glad it's finally over, forget that a Section 34 challenge or an execution runs on its own deadline. For the enforcement stage, see how to enforce an arbitral award in India.
Sometimes the arbitration clause turns out to be invalid, or the dispute isn't arbitrable at all. Then you fall back on a money recovery suit in the commercial court. Section 14 can rescue time spent in the wrong forum in good faith. Choosing the right forum at the start is far safer. Our commercial court site explains that route's own limitation rules in its guide on limitation for recovery of money.
What to do this week if your claim is getting old
Anyone who sits down and reads the file can usually spot a limitation problem a year before it bites. Start with the contract. Find the payment clause, the notice clause and the arbitration clause. Then do a one-page chart. One row per claim: when it fell due, every admission or part payment from the other side, and the last date once you've applied Sections 18 and 19 and the pandemic exclusion. If any of those last dates falls in the next six months, get the Section 21 notice drafted now. Don't wait for the next meeting.
If you're the respondent, check whether any claims against you are already past three years, and whether you've got a counterclaim that needs its own notice. If you already hold an award, note the date it becomes enforceable and the twelve-year execution date. The stages that follow the notice are set out in our overview of how arbitration works in India.
If you'd like your contract, notices and correspondence checked for limitation before you invoke arbitration, or want to hear how courts are reading Section 43, send them to Advocate B.K. Singh's team through the contact page.
Frequently asked questions
Does the Limitation Act apply to arbitration in India?
Yes. Section 43(1) of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 to arbitrations as it applies to court proceedings. So most money claims have three years from the date the claim arose.
Is a time-barred claim lost for good?
The money is still owed in theory, but you can't make anyone pay it. If a claim was already time-barred when the arbitration started, the arbitrator can't award it. The debtor is free to pay voluntarily. And if the debtor later promises in writing to pay a time-barred debt, that promise can be enforced as a new contract under Section 25(3) of the Contract Act.
Does a Section 9 petition for interim relief stop limitation on the claim?
Not on its own. The Section 21 notice is what saves the claim, so send it with or before the Section 9 petition. And if a court grants interim relief before arbitration starts, Section 9(2) requires arbitral proceedings to begin within 90 days.
Can I add a new claim halfway through the arbitration?
Section 23(3) lets you ask the tribunal for permission to amend. The catch is limitation. A fresh claim may be judged as of the day you first raise it, so if it wasn't in your notice and is over three years old by that point, the tribunal can reject it while the rest of your case goes ahead.
Can the parties agree to a longer limitation period?
No. Parties can't stretch the statutory period by contract. What they can do is sign an acknowledgment, or a standstill-type letter admitting liability, which restarts time under Section 18 of the Limitation Act.
Is limitation the same for international arbitrations seated in India?
Yes. If the seat is in India, Part I of the Act applies, Section 43 included. If the seat is abroad, the limitation rules of the seat and the governing law usually apply, and Indian law matters mainly when the award comes here to be enforced.
Does an email count as an acknowledgment of debt?
It can. Section 18 of the Limitation Act asks for a written acknowledgment signed by the party, and courts have accepted emails sent by someone authorised at the debtor company. Save the complete email, headers and all. You'll also need a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.
Who has to prove the claim is within time?
The claimant. It has to show the claim was in time, including any acknowledgment or part payment it relies on. The respondent should still plead limitation clearly in its defence, so the tribunal frames it as an issue.
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M. More than twenty years in practice before the Supreme Court, the Delhi High Court, district and commercial courts in Delhi NCR, and tribunals.
This guide explains the law in general terms and is not legal advice. For advice on your own papers, contact the team.