In short. An arbitral award can be set aside under section 34 only on limited grounds: incapacity, an invalid arbitration agreement, no proper notice or opportunity, decisions beyond the reference, improper composition or procedure, non-arbitrable subject matter, conflict with the public policy of India, or patent illegality on the face of a domestic award. The application must be filed within three months of receipt, plus up to 30 days, and not thereafter.
This post is for the party that has lost an arbitration, in whole or in part, and is deciding whether to challenge the award. It covers the deadline, the court, the grounds as courts now read them, the limited power to modify an award, the separate question of stay, and the mistakes that end challenges before they are heard. It also helps award holders understand what the other side can and cannot argue. Enforcing the award once the challenge is over is covered in our post on enforcing an arbitral award as a decree.
For the rest of the arbitration process, see our arbitration and conciliation practice page.
- Law
- Section 34, Arbitration and Conciliation Act 1996
- Time limit
- 3 months from receipt of award, plus up to 30 days, not thereafter
- Court
- Court at the seat; commercial court or High Court by value
- Grounds
- Section 34(2) and, for domestic awards, patent illegality under 34(2A)
- Stay of award
- Not automatic; separate application under section 36(3)
- Appeal
- Section 37; 60 days in commercial matters
Is a section 34 application an appeal against the award?
No, and this is the single most important thing to understand before deciding to challenge. A section 34 court does not ask whether the tribunal got the facts or the law right. It asks whether the award falls within one of the narrow grounds the Act allows. Explanation 2 to section 34(2)(b)(ii) says expressly that the test of whether an award conflicts with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
The Supreme Court has repeated this many times. In Associate Builders v Delhi Development Authority (2014), it held that a court does not act as an appellate court and cannot reassess the evidence. In Ssangyong Engineering and Construction Co Ltd v NHAI (2019), it explained how the 2015 amendments narrowed the grounds further. If the tribunal's view is a possible view on the evidence and the contract, the court will not substitute its own, even if it would have decided differently.
So the question at the start is not 'was the award wrong?' but 'is there something in the award or the process that the law treats as a defect?' Many awards that feel unfair do not pass that test. A good share of the advice we give to losing parties is that a challenge will not succeed and that the money is better spent on settlement or on planning for enforcement.
What is the time limit for challenging an arbitral award?
Section 34(3) gives three months from the date the party received the arbitral award, or, if a request for correction or interpretation was made under section 33, from the date that request was disposed of. The proviso allows the court to entertain the application within a further 30 days if the applicant shows sufficient cause, 'but not thereafter'. In Union of India v Popular Construction Co (2001), the Supreme Court held that section 5 of the Limitation Act cannot extend the time beyond this outer limit. Three months and 30 days is the end.
Time runs from receipt of a signed copy of the award by the party itself. In Union of India v Tecco Trichy Engineers and Contractors (2005), the Court held that for a large organisation, delivery must be to the person who can take the decision to challenge, and in Benarsi Krishna Committee v Karmyogi Shelters Pvt Ltd (2012), that delivery to the party's lawyer alone does not start time. Even so, do not rely on these arguments to save a late filing. Work out the date of receipt on the most conservative view and file well before it.
Court vacations do not help as much as people think. In My Preferred Transformation and Hospitality Pvt Ltd v Faridabad Implements Pvt Ltd (2025), the Supreme Court held that section 4 of the Limitation Act, which allows filing on the reopening day when the court is closed, applies only to the three-month period, not to the further 30 days. Delhi courts have also treated incomplete filings, for example without the award or without signed pleadings, as no filing at all, so the date of the defective filing may not count.
Grounds for setting aside an award at a glance
Section 34 lists the grounds exhaustively. A challenge must fit within one of them.
| Ground | Provision | What it covers |
|---|---|---|
| Incapacity of a party | Section 34(2)(a)(i) | A party was a minor, of unsound mind, or otherwise lacked capacity to contract |
| Invalid arbitration agreement | Section 34(2)(a)(ii) | No valid agreement under the law the parties chose or Indian law |
| No proper notice or unable to present case | Section 34(2)(a)(iii) | Not told of the appointment or the hearings, or denied a fair chance to argue or lead evidence |
| Beyond the scope of the reference | Section 34(2)(a)(iv) | The award decides disputes not submitted, or goes beyond the clause; severable parts can be saved |
| Wrong composition or procedure | Section 34(2)(a)(v) | Tribunal not constituted, or procedure not followed, as the agreement or Part I requires |
| Non-arbitrable subject matter | Section 34(2)(b)(i) | The dispute could not be decided by arbitration under Indian law |
| Conflict with public policy | Section 34(2)(b)(ii) and Explanation 1 | Fraud or corruption, contravention of the fundamental policy of Indian law, or conflict with the most basic notions of morality or justice |
| Patent illegality | Section 34(2A) | Domestic awards only: illegality on the face of the award, not mere error of law or reappreciation of evidence |
Procedural and jurisdictional grounds under section 34(2)(a)
The grounds in clause (a) are about the process, not the result. The one invoked most often is clause (iii): the party was not given proper notice of the appointment or the proceedings, or was otherwise unable to present its case. This covers a tribunal that refused to let a party lead evidence on a central issue, decided on a ground neither side argued, or relied on material the party never saw. It does not cover a tribunal that heard the evidence and simply did not believe it.
Clause (iv), excess of jurisdiction, applies where the award deals with a dispute not referred to arbitration or goes beyond the terms of the submission, for example awarding damages under a different contract or on a claim never pleaded. Where the excess can be separated, the proviso allows the court to set aside only that part. Clause (v) applies where the tribunal was not constituted as agreed, which now includes awards by arbitrators who were ineligible under section 12(5) or appointed unilaterally by one party, a defect the Supreme Court has treated as going to the root of the tribunal's mandate.
Since the 2019 amendment, the applicant must establish these grounds 'on the basis of the record of the arbitral tribunal'. In Emkay Global Financial Services Ltd v Girdhar Sondhi (2018), the Court had already held that section 34 applications are ordinarily decided on the record, without fresh evidence. Your challenge will be only as good as the arbitral record, which is why objections must be raised and recorded during the arbitration itself.
When is an award against the public policy of India?
After the 2015 amendment, Explanation 1 to section 34(2)(b) limits public policy to three situations: the making of the award was induced or affected by fraud or corruption, or was in violation of section 75 or 81 (confidentiality and admissibility of conciliation material); the award contravenes the fundamental policy of Indian law; or it conflicts with the most basic notions of morality or justice.
'Fundamental policy of Indian law' is narrow. In Ssangyong, the Court said it covers breach of the most basic principles of Indian law, such as disregard of binding orders of superior courts, and not every breach of a statute. Denial of a fair hearing is dealt with under section 34(2)(a)(iii) rather than here. 'Most basic notions of morality or justice' is reserved for awards that shock the conscience of the court. An award that misreads a clause or miscalculates interest does not fall here.
Fraud or corruption must relate to the making of the award, such as a bribed arbitrator, fabricated evidence that was decisive, or concealment of a conflict of interest by the arbitrator. An allegation that the other party committed fraud in the underlying transaction, which the tribunal considered and rejected, is a merits question and does not become a public policy ground because it is relabelled.
What counts as patent illegality on the face of the award?
Section 34(2A) adds a ground for domestic awards only, not for international commercial arbitrations seated in India: the award may be set aside if it is vitiated by patent illegality appearing on the face of the award. The proviso limits it at once: an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
In Ssangyong, the Supreme Court gave examples of what does qualify. An award that gives no reasons, in breach of section 31(3), is patently illegal unless the parties agreed that no reasons were needed. So is an award that is perverse: one based on no evidence, one that ignores vital evidence, or one that relies on documents taken behind a party's back. An interpretation of the contract that no fair-minded or reasonable person could take, or a decision that rewrites the contract and gives relief it does not permit, is also covered.
The bar is high. In Delhi Airport Metro Express Pvt Ltd v Delhi Metro Rail Corporation (2021), the Supreme Court set aside a High Court judgment that had interfered with an award, cautioning courts against using patent illegality to correct what they see as errors. A tribunal's reasonable interpretation of a clause, or its preference for one witness over another, stands even if the court would have read the evidence differently.
Can the court reduce or change the amount awarded?
Only in limited ways. For years, following Project Director, NHAI v M. Hakeem (2021), the position was that a section 34 court could only set aside, not modify. In Gayatri Balasamy v ISG Novasoft Technologies Ltd (2025), a Constitution Bench held by majority that courts do have a limited power to modify: they can sever and set aside an invalid part of the award where it is separable from the rest, correct clerical, computational or typographical errors apparent on the face of the award, and in some circumstances modify post-award interest. They cannot revisit the merits.
Short of modification, section 34(4) allows the court, on a party's request, to adjourn the proceedings and give the tribunal an opportunity to resume the proceedings or take other action that will eliminate the grounds for setting aside. This is used where the award lacks reasons on an issue, or has a gap that the tribunal can fill. It cannot be used to ask the tribunal to reach a different conclusion.
If the award is set aside in full, the dispute is not decided in the challenger's favour. The parties are back where they were and may arbitrate afresh. Section 43(4) excludes the time between the commencement of the arbitration and the order setting aside the award when computing limitation for fresh proceedings, so the claimant usually does not lose its claim to time.
Does filing a section 34 application stop enforcement?
No. Since the 2015 amendment, section 36(2) provides that filing a section 34 application does not by itself make the award unenforceable. The Supreme Court upheld this in Hindustan Construction Co Ltd v Union of India (2019). The challenger must file a separate application for stay, and the court may grant it on conditions it considers fit, recording reasons.
For an award for payment of money, section 36(3) requires the court to have due regard to the provisions of the Code of Civil Procedure for stay of a money decree. In practice, courts usually stay a money award only on deposit of the awarded amount, or a substantial part of it, or on security such as a bank guarantee. The award holder is often allowed to withdraw the deposited amount on furnishing security. An unconditional stay is exceptional.
Since 2021, the proviso to section 36(3) requires the court to stay the award unconditionally, pending the challenge, where it is satisfied that a prima facie case is made out that the arbitration agreement or contract, or the making of the award, was induced or effected by fraud or corruption. That requires real material, not an assertion. If no stay is obtained, the award holder can execute the award as a decree after the three-month period expires, as explained in enforcing an arbitral award as a decree.
Which court hears a section 34 application in Delhi NCR?
The application goes to the 'Court' under section 2(1)(e) at the seat of arbitration. For a domestic award with a New Delhi seat, the value decides the forum: disputes above ₹2 crore go to the Commercial Division of the Delhi High Court, and commercial disputes from ₹3 lakh up to ₹2 crore go to the commercial courts in the Delhi district complexes. Our page on commercial courts in Delhi explains that structure. For an award seated in Noida or Ghaziabad, the commercial court of that district hears it.
For an international commercial arbitration seated in India, only the High Court can hear the challenge, whatever the value. For arbitrations seated outside India, section 34 does not apply at all; the award can only be resisted when the holder seeks enforcement in India under section 48, which our post on enforcing foreign arbitral awards in India discusses.
Where the award arises from the Facilitation Council under the MSMED Act 2006, section 19 of that Act requires the challenger, if it is not the supplier, to deposit 75% of the awarded amount before the court will entertain the section 34 application. Buyers who receive such awards need to plan for that deposit within the limitation period.
Steps in challenging an award
In a typical domestic challenge, the work runs in this order.
Fix the date of receipt
Note when the signed award was delivered to the party, and whether a section 33 request was made. Calculate three months from that date and treat it as the real deadline; the extra 30 days are for emergencies.
Get the arbitral record
Collect the pleadings, evidence, written submissions, procedural orders and hearing transcripts. Since 2019, the grounds must be established from the record of the tribunal.
Test each possible ground honestly
Go through section 34(2) and (2A) and identify the specific defect: a denied opportunity, a finding on no evidence, a claim outside the reference. Drop grounds that are really disagreements with the result.
Serve prior notice on the other side
Section 34(5) requires prior notice to the other party, and the application must be accompanied by an affidavit confirming compliance. The Supreme Court has held this requirement directory, but follow it.
File the application with the award and record
File within time with a signed copy of the award, the relevant parts of the record, the affidavit and the court fee. An incomplete filing risks being treated as no filing.
Apply for stay if needed
File a separate application under section 36(3), and be ready to offer a deposit or security for a money award.
Hearing and decision
Section 34(6) asks the court to decide within one year of the notice to the other side. Hearings are on the record, by written submissions and argument, usually without fresh evidence.
Documents for a section 34 application
The award
- Signed copy of the award as delivered to the party
- Proof of the date of receipt: covering letter, courier record or email
- Any section 33 request and the tribunal's order on it
The arbitral record
- Statement of claim, defence, counterclaim and rejoinder
- Documents and witness affidavits filed by both sides
- Procedural orders, minutes of hearings and transcripts
- Written submissions, and any applications the tribunal rejected
Filing papers
- Application under section 34 setting out each ground with references to the record
- Affidavit confirming prior notice under section 34(5)
- Stay application under section 36(3), if needed
- Board resolution or authority letter for a company
- Vakalatnama, court fee and index
A made-up example: the developer and the contractor
Here's a made-up example. A Noida developer engages a civil contractor for a residential tower under a contract with a New Delhi seat. After disputes over delay and variations, a sole arbitrator awards the contractor ₹4.2 crore with interest, including ₹70 lakh for 'loss of profit on the balance work', a claim the contractor never pleaded and on which no evidence was led.
When Advocate B.K. Singh is asked to review an award like this, the first thing he does is fix the date the signed copy actually reached the client, and then separate the grounds that are real from those that are disappointment. Here, most of the developer's complaints, about how the arbitrator weighed the delay evidence and read the variation clause, are attacks on findings of fact and plausible interpretations. Those are unlikely to succeed. The ₹70 lakh head is different: it decides a claim outside the pleadings, with no evidence, and can be challenged as beyond the reference and patently illegal.
The developer files in the Commercial Division of the Delhi High Court within three months, confining the challenge to the ₹70 lakh head and a computational error in interest. It seeks a stay, and the court stays the award on deposit of the undisputed part. The narrower challenge is quicker to argue and, if it succeeds, the court can sever that head without disturbing the rest, following Gayatri Balasamy.
Objections you cannot raise for the first time in court
Some objections must be raised during the arbitration or they are lost. Section 16(2) requires a plea that the tribunal lacks jurisdiction to be raised no later than the statement of defence, and a plea that the tribunal is exceeding its authority to be raised as soon as the matter arises. Section 4 treats a party that proceeds with the arbitration without objecting to a known breach of a derogable provision or of the agreement as having waived its objection.
This matters for procedural grounds. If you thought the tribunal was wrongly refusing an adjournment, refusing to admit a document or proceeding without a hearing on some point, the time to object in writing was then. A challenge based on a grievance that was never raised before the tribunal starts with the court asking why.
There are exceptions. Ineligibility under section 12(5) cannot be waived by conduct, only by an express written agreement after the dispute arose. Non-arbitrability and conflict with public policy go to the root and can be examined by the court even if not raised. But do not rely on exceptions; record objections as they arise.
After the section 34 decision: appeal and next steps
An order setting aside or refusing to set aside an award is appealable under section 37(1)(c). In commercial disputes, section 13 of the Commercial Courts Act gives 60 days, and in Government of Maharashtra v Borse Brothers Engineers and Contractors Pvt Ltd (2021), the Supreme Court held that delay beyond that period should be condoned only by way of exception, not as a matter of course. The scope of the section 37 appeal is narrower still: the appellate court checks whether the section 34 court stayed within its limits.
After the High Court, the only remedy is a special leave petition to the Supreme Court under Article 136, within 90 days. The Supreme Court admits few arbitration SLPs and, after Gayatri Balasamy, may exercise its Article 142 power to modify only with great caution. Our page on Supreme Court practice covers that stage.
If the award survives, the award holder will execute it. If the challenger obtained a stay on deposit, the deposit usually goes to the award holder once the challenge fails. Many disputes settle at one of these points, because each stage narrows the room for argument.
Mistakes that end section 34 challenges
- Filing late. No court can entertain a challenge filed after three months and 30 days, however strong the grounds.
- Filing an incomplete application to stop the clock. A filing without the award or signed pleadings may be treated as no filing, leaving the corrected filing out of time.
- Rearguing the case. A petition that reads like an appeal on facts invites dismissal and costs.
- Too many grounds. Twenty grounds, eighteen of them weak, bury the two that matter.
- Assuming filing means stay. Without a stay order, the award holder can execute after three months.
- Raising objections that were never taken before the tribunal. Section 4 and section 16(2) can defeat them.
- Forgetting the MSME deposit. A buyer challenging a Facilitation Council award must deposit 75% before the court entertains the application.
- Ignoring section 34(4). Where the defect is a gap in reasons, asking the court to remit to the tribunal may be more realistic than seeking to set aside.
What to do this week if you have received an adverse award
- Note the exact date and manner in which the signed award reached you.
- Calculate three months from that date, and diary a filing date well before it.
- Check for clerical or computational errors and consider a section 33 request within 30 days.
- Collect the full arbitral record, including procedural orders and transcripts.
- List the objections you raised during the arbitration and where they are recorded.
- Have the award reviewed against the section 34 grounds, not against what you think the right answer was.
- If it is a money award, plan how you would offer a deposit or security for a stay.
- If it is an MSME Facilitation Council award against you, arrange the 75% deposit.
- Consider whether settlement on the award amount is a better use of the money than a challenge.
Deciding whether to challenge
A section 34 challenge is worth bringing when there is a defect the law recognises and the record shows it. It is not worth bringing to buy time, because without a stay it does not stop execution, and with a stay it usually requires a deposit. Read the award with that in mind, decide quickly, and file early.
If you have received an award and want an advocate to read it against the record and tell you whether a challenge has a real basis, the team at B.K. Singh & Associates can review the papers and give you the deadline in writing. You can send them through the online enquiry page. For related stages, see our posts on appointment of an arbitrator and interim relief under section 9, and the page on arbitration practice in Delhi.
Frequently asked questions
What is the limitation period for filing a section 34 petition?
Three months from the date the party received the signed award, or from the disposal of a section 33 request. The court can allow a further 30 days for sufficient cause, but not beyond that. Section 5 of the Limitation Act does not apply to extend this period.
Can the court reappreciate evidence under section 34?
No. The proviso to section 34(2A) bars setting aside an award on reappreciation of evidence or mere erroneous application of law. A court interferes with findings of fact only where they are perverse, for example based on no evidence or ignoring vital evidence.
Can a court modify an arbitral award in India?
Only to a limited extent after the Constitution Bench decision in Gayatri Balasamy (2025). Courts may sever an invalid part, correct clerical or computational errors, and in some cases modify post-award interest. They cannot revise the award on the merits.
Does filing a section 34 challenge stay the award automatically?
No. Since 2015, section 36(2) makes clear that filing does not stay the award. You must apply separately under section 36(3), and for money awards courts usually require a deposit or security.
What is patent illegality in an arbitral award?
It is an illegality apparent on the face of a domestic award, such as an award without reasons, a finding based on no evidence, or an interpretation of the contract no reasonable person could take. Mere errors of law or a different view of the evidence do not qualify.
Is patent illegality available against an international commercial arbitration award?
No. Section 34(2A) applies only to arbitrations other than international commercial arbitrations. Awards in international commercial arbitrations seated in India can be challenged only on the grounds in section 34(2).
When does the three-month period start if the award was sent to my lawyer?
The Supreme Court has held that time runs from receipt of the signed award by the party itself, not only by its lawyer. Even so, calculate the deadline on the most conservative date and file early, since this point is often argued.
Can I challenge an award on the ground that the arbitrator was appointed unilaterally?
Yes. An award by an arbitrator ineligible under section 12(5), or appointed unilaterally by one party, can be challenged on the ground that the tribunal was not properly constituted. Participation in the arbitration does not waive section 12(5) ineligibility.
What happens if the award is set aside?
The award ceases to bind, but the dispute is not decided in your favour. Either party may start a fresh arbitration, and section 43(4) excludes the time spent in the first arbitration and the challenge when computing limitation.
Do I need to deposit money to challenge an MSME Facilitation Council award?
Yes, if you are not the supplier. Section 19 of the MSMED Act requires a deposit of 75% of the awarded amount before the court will entertain the section 34 application.
How long does a section 34 challenge take in Delhi?
Section 34(6) asks the court to decide within one year of notice to the other side, but actual time depends on the court's list and the size of the record. Stay applications are usually heard much earlier.
Can I appeal if my section 34 petition is dismissed?
Yes, under section 37(1)(c), within 60 days in commercial matters. The appellate court only checks whether the section 34 court kept within its limits, so the appeal is narrower than the original challenge.
Written and reviewed at B.K. Singh & Associates
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M., with more than twenty years of practice before the Supreme Court, the Delhi High Court, district courts and tribunals across Delhi NCR. This article explains the general law as of 24 October 2026; it is not legal advice on your facts.