Claimant Can Pursue Alternate Remedy For Severed Part Of Award Without Limitation Bar: Bombay High Court
The Bombay High Court has held that time spent in earlier arbitral proceedings can be excluded while computing limitation, even if only part of an arbitral award is set aside and fresh proceedings arise from a different agreement. A single bench of Justice Sandeep V Marne, in an order dated December 17, 2025, said Section 43(4) of the Arbitration and Conciliation Act allows exclusion of...
The Bombay High Court has held that time spent in earlier arbitral proceedings can be excluded while computing limitation, even if only part of an arbitral award is set aside and fresh proceedings arise from a different agreement.
A single bench of Justice Sandeep V Marne, in an order dated December 17, 2025, said Section 43(4) of the Arbitration and Conciliation Act allows exclusion of such time as long as the dispute formed part of the earlier arbitration.
“When claimant in such a case institutes a suit, the same cannot be thrown out on the ground of limitation as Section 43(4) would come to the aid of such Claimant for exclusion of time spent in arbitral proceedings while computing period of limitation in filing of suit,” the court observed.
The ruling came while dismissing a petition filed by Laguna Resort Pvt Ltd challenging an arbitral award directing it to pay Rs78.09 lakh with interest to Concept Hospitality Pvt Ltd (CHPL). The amount related to unpaid invoices for hotel management services rendered between 2009 and 2011.
Laguna Resort owns a resort property at Lonavala. The property was initially managed by Concept Hospitality under a 1999 agreement. In 2009, Concept assigned its rights to Evergreen Hospitality Pvt Ltd through a tripartite arrangement. Evergreen later entered into a fresh management agreement in 2011. Concept Hospitality and Evergreen subsequently merged to form CHPL.
Evergreen had earlier initiated arbitration proceedings. Those proceedings resulted in an award covering multiple claims. In 2019, the High Court partly set aside that award, holding that disputes for the 2009-2011 period were not arbitrable under the 2011 agreement.
CHPL then invoked fresh arbitration under the 1999 agreement. This led to the award under challenge.
Laguna Resort argued that the claims were barred by limitation. It said Section 43(4) which allows exclusion of time spent in earlier arbitration proceedings while computing limitation, could not apply because the second arbitration arose from a different contract. It also questioned the existence of a valid arbitration agreement for the disputed period.
The court rejected these objections. It held that Section 43(4) is not limited to cases where an entire award is set aside. The provision also applies where only part of an award is severed, provided the right to sue for that part continues.
“The concept of 'similarity in dispute' envisaged under Section 43(4) would apply even to a 'part of dispute'. Where the Award comprising of multiple claims is severed, and bad part of the Award is set aside, and if right to sue in respect of severed bad part of the Award continues, the Claimant can exercise alternate remedy in respect of that bad part".
The petition was dismissed. The court noted that Laguna Resort had not challenged the award on merits or disputed the liability. Its challenge was confined only to limitation.
Case Title: Laguna Resort Pvt Ltd vs Concept Hospitality Pvt Ltd
Case Number: Commercial Arbitration Petition No. 19 of 2024
For Petitioner: Senior Advocate Ashutosh Kumbhakoni with Advocates Mahermosh Humranwala, Mahesh Menon, Akanksha Anand i/b Mahesh Menon & Co.
For Respondent: Advocates Sumit Rai, Samrudhi Gholap i/b Satyan Israni