What this covers: All grounds available to challenge an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, the exclusive mechanism for setting aside a domestic arbitral award or an international commercial arbitral award in India. Includes limitation period, key cases, and practical guidance.
Statutory framework: Section 34, Arbitration and Conciliation Act, 1996; Section 34(2A) as inserted by the 2015 Amendment Act.
Limitation Period
3 months + 30 days (with sufficient cause): Section 34(3) provides that an application to set aside an award must be made within 3 months from the date on which the applicant received the arbitral award. The court may, if it is satisfied that the applicant was prevented by sufficient cause from making the application within the 3-month period, entertain the application within a further period of 30 days, but not thereafter.
| Period | Rule |
|---|---|
| 3 months | Standard limitation from date of receipt of award |
| Additional 30 days | Discretionary; requires court to find “sufficient cause” for delay |
| Beyond 30 days | Absolutely barred, court has no power to extend further |
Key case: Union of India v Varindera Constructions Ltd (2018) 7 SCC 459, Supreme Court held that the 30-day extension is subject to the court being satisfied about sufficient cause; delay caused by negligence or laches of the applicant will not be condoned.
Grounds Under Section 34(2)(a): Party-Invoked Grounds
These grounds must be established by the party challenging the award (i.e., they are not examined by the court suo motu). The applicant must prove the ground.
| Ground | Section | What it means in practice |
|---|---|---|
| Incapacity of a party | S. 34(2)(a)(i) | A party to the arbitration agreement was under some legal incapacity (minor, unsound mind, lack of authority) |
| Arbitration agreement is invalid | S. 34(2)(a)(i) | The arbitration agreement is invalid under the applicable law, does not meet the requirements of a valid arbitration agreement |
| Applicant not given proper notice | S. 34(2)(a)(ii) | The applicant was not given proper notice of the appointment of the arbitral tribunal or of the arbitral proceedings, or was otherwise unable to present its case |
| Award deals with dispute not within terms of submission | S. 34(2)(a)(iii) | The award decides a dispute that was not referred to arbitration or goes beyond the scope of the arbitration clause |
| Composition of arbitral tribunal or procedure violated | S. 34(2)(a)(iv) | The composition of the arbitral tribunal was not in accordance with the parties’ agreement or the Act, or the arbitral procedure was not followed |
Grounds Under Section 34(2)(b): Public Policy Grounds
These grounds are examined by the court and may be raised suo motu. They are broader in scope but courts apply a high threshold.
| Ground | Section | What it means in practice |
|---|---|---|
| Award in conflict with public policy of India | S. 34(2)(b)(ii) | The award violates a fundamental policy of Indian law, is in conflict with the basic notions of morality or justice, or was induced by fraud or corruption |
| Induced by fraud or corruption | S. 34(2)(b)(ii)(a) | The award was procured through fraudulent conduct by a party or an arbitrator, bribery, concealment, fabrication |
| Conflict with basic notions of morality or justice | S. 34(2)(b)(ii)(b) | The award violates a fundamental moral or justice principle; narrowly applied |
| Fundamental policy of Indian law | S. 34(2)(b)(ii)(c) | The award ignores a mandatory Indian law provision or violates a constitutional principle |
| Subject matter not arbitrable | S. 34(2)(b)(i) | The subject matter is not capable of settlement by arbitration, e.g., criminal, matrimonial, NCLT-exclusive, insolvency |
Patent Illegality: Section 34(2A)
Inserted by the Arbitration and Conciliation (Amendment) Act, 2015. This ground applies only to domestic arbitral awards (not international commercial arbitration seated in India).
Patent illegality appearing on the face of the award, the award is contrary to the substantive law of India; the arbitrator has failed to apply the law or has applied an incorrect legal standard; the finding of fact is so perverse that no reasonable person could reach it; the award is based on no evidence. Does NOT allow courts to re-appreciate evidence or substitute their view on facts.
Key limitation on Section 34(2A): Courts have emphasised that Section 34(2A) does not create a second appeal on facts or an appellate jurisdiction. An error of law must be patent, obvious from the award itself.
Practical Guidance
What cannot be a Section 34 ground:
- Disagreement with the arbitrator’s interpretation of facts
- Preference for a different legal interpretation when the arbitrator’s interpretation is reasonable
- Change in law after the award
- Adequacy of reasoning (unless reasoning is absent entirely)
Drafting the Section 34 application:
- Identify the specific statutory ground clearly (not “the award is wrong”)
- For natural justice grounds: specify what notice was not given, what representation was not allowed
- For patent illegality: identify the specific law that was violated, with reference to the page of the award where the violation appears
- For public policy: address each sub-element, fraud/corruption, morality, fundamental policy
This resource is for general information purposes only and does not constitute legal advice. For advice on your specific situation, seek appropriate professional counsel.