Interim Award On Limitation Can Be Challenged Under Section 34 Of The Arbitration & Conciliation Act 1996

The Supreme Court in a recent decision in M/s Indian Farmers Fertilizer Co-operative Limited v M/s Bhadra Products [^[1]] has held that an award passed by an arbitrator, even on a limited issue of limitation is an interim award and therefore amenable to challenge under §34 of the Arbitration and Conciliation Act, 1996 (Act). The Court also ruled that the question of limitation does not affect an arbitrator's own jurisdiction and was not covered under the ambit of §16 of the Act, which deals with an arbitral tribunal's competence to decide questions of its own jurisdiction.

Facts:

Disputes arose between M/s Farmers Fertilizer Co-operative Limited (Farmers Co-operative) and M/s Bhadra Products (Bhadra) pertaining to non-payment of monies. Bhadra invoked the arbitration clause and a sole arbitrator was appointed. The arbitrator decided to adjudicate on the issue of limitation first and it was ruled that the claims of Bhadra were not time-barred.