Substance Over Form in Section 34 Challenges: Rajasthan High Court Affirms Section 14 Exclusion and Cautions Against Technical Dismissals in International Commercial Arbitration

Introduction

This commentary analyzes the Division Bench decision of the Rajasthan High Court in Continental Engineering Corporation Limited v. Jaipur Metro Rail Corporation (2025 RJ-JP 30360-DB), pronounced on 21 August 2025. The dispute arose from an arbitral award dated 20 December 2017 that rejected the contractor’s claims by a 2:1 majority. The contractor (a Taiwanese company) filed a Section 34 petition to set aside the award. What followed was a protracted jurisdictional and procedural wrangle: the petition was first filed before the State Commercial Court, returned for want of jurisdiction, and then tendered before the High Court, where registry-related objections and roster issues ensued. A learned Single Judge ultimately dismissed the matter, holding there was (i) no proper Section 34 petition before the Court, (ii) no application for condonation of delay, and (iii) no appropriate relief in the application made under Section 10(1) of the Commercial Courts Act, 2015.

The Division Bench (Hon’ble Mr. Justice Sanjeev Prakash Sharma and Hon’ble Mr. Justice Chandra Prakash Shrimali) allowed the appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 read with Section 13(1A) of the Commercial Courts Act, 2015, set aside the Single Judge’s order, and remanded the Section 34 petition for decision on merits. The judgment has important clarifications on (a) treating miscaptioned or irregularly presented filings based on their contents; and (b) excluding time under Section 14 of the Limitation Act for bona fide prosecution in a wrong forum—crucially, even when a formal Section 14 application is not separately titled, if the record shows the plea was raised and the conditions are met.

Summary of the Judgment

The Division Bench held that an application challenging an arbitral award must be judged by its contents and substance, not by its caption or the particular provision cited in its heading. A Section 34 challenge annexed to a Section 10(1) Commercial Courts Act application could not be rejected as non-existent merely because of how it was labeled or presented.
Time spent in bona fide pursuit of the remedy in a wrong forum is liable to be excluded under the principles of Section 14 of the Limitation Act, 1963. The Court endorsed the applicability of Section 14 to Section 34 proceedings and rejected a hyper-technical approach to limitation in these circumstances.
Registry or roster-related complexities and formal defects should not derail adjudication under Section 34. The Single Judge ought to have examined the contents and decided the petition on merits.
The Single Judge’s order dated 02.03.2022 was set aside. The matter was remanded to the appropriate Single Judge to decide the Section 34 petition on merits, with both sides at liberty to advance their respective submissions.

Analysis

Precedents Cited and Their Influence

The Court relied on the Supreme Court’s exposition in M.P. Steel Corporation v. Commissioner of Central Excise, (2015) 7 SCC 58. That decision, in turn, synthesizes several foundational principles regarding Section 14 of the Limitation Act, including:

Exclusion vs. Condonation: Section 14 excludes time spent in bona fide proceedings in a wrong forum; it is conceptually distinct from condonation of delay. When Section 14 applies, there is no “delay” to condone for the excluded period. M.P. Steel emphasizes this distinction (with reference to earlier authority such as Consolidated Engineering Enterprises v. Irrigation Dept., (2008) 7 SCC 169).
Liberal, Justice-Oriented Construction: Section 14 is to be construed to advance justice, not defeat it on technicalities. The benefit is not confined to courts in a narrow sense; it can extend to quasi-judicial bodies (see also State of Goa v. Western Builders, (2006) 6 SCC 239; Consolidated Engineering, supra; and Sarathy v. State Bank of India, (2000) 5 SCC 355, as reflected in M.P. Steel).
Bona Fides and Due Diligence: The critical questions are whether the litigant prosecuted the earlier proceeding with due diligence and in good faith, and whether that proceeding ultimately failed for want of jurisdiction or a defect of like nature.

By invoking M.P. Steel, the Division Bench reinforced the well-settled position that Section 14 applies to Section 34 petitions. The Court applied those principles to hold that time spent before the Commercial Court (which returned the petition under Order VII Rule 10 CPC), and the consequent, bona fide steps before the High Court should be excluded. The High Court thereby neutralized the limitation objection predicated on the period between the return order and the High Court filing/processing.

Legal Reasoning

Substance over Caption: The Court held it is “settled law that merely mentioning a wrong heading of provision on the application would not defeat the cause of justice.” What matters are the contents and the relief sought. Here, the petition clearly contained objections under Section 34 to set aside the award, even if packaged within or annexed to an application referencing Section 10(1) of the Commercial Courts Act. Consequently, the Single Judge’s finding that “no Section 34 application” was before the Court was rejected.
Section 14 Exclusion Applies to Section 34: Emphasizing M.P. Steel, the Division Bench treated the time spent in the wrong forum (the State Commercial Court) as excludable when computing limitation under Section 34(3). The Court underscored that where the litigant prosecutes with due diligence and good faith, such time must be excluded, thereby avoiding dismissal purely on limitation grounds. The Court also accepted that the Section 14 plea had been raised in the written submissions and the record, obviating a rigid insistence on a separately titled “Section 14 application.”
Commercial Courts Act, 2015—Forum Allocation, Not a Substantive Fetish: Section 10(1) of the Commercial Courts Act allocates arbitration-related filings arising from international commercial arbitration to the Commercial Division of the High Court (where constituted). It does not extinguish or replace the remedy under Section 34 of the Arbitration Act. The procedural skirmish—whether to file directly under Section 34 before the High Court or to accompany it with a Section 10(1) application—could not be used to deny adjudication where the substantive challenge was clear.
Registry Defects and Roster Issues Are Not Jurisdictional Bars: The Court acknowledged the sequence of registry objections and intra-court listing/roster issues (movement between Division Bench and Single Bench). It cautioned that such administrative matters cannot become substantive hurdles to hearing a Section 34 petition on merits.
Order VII Rule 10 CPC (Return vs Rejection): The State Commercial Court returned the petition for filing before the competent court. That posture significantly distinguished this case from situations where a petition is “rejected” on merits or for incurable defects. A returned filing, coupled with due diligence in refiling, naturally supports Section 14 exclusion.

Impact

Clear Signal Against Technical Dismissals: The judgment reaffirms that arbitration-related court proceedings, especially time-bound Section 34 challenges, should not be derailed by captioning errors, registry formalities, or administrative listing challenges. Courts must look at the substance and decide on merits wherever possible.
Section 14’s Robust Application in Arbitration: By expressly applying Section 14 principles to a Section 34 petition involving an international commercial arbitration, the Court aligns with Supreme Court jurisprudence and offers litigants an important safety valve where jurisdictional confusion or bona fide mistakes in forum selection occur.
Guidance for Registries and Practitioners: Practitioners should annex and present the Section 34 petition clearly, but even where the filing travels with a Section 10(1) Commercial Courts Act application, the court will examine the contents first. Registries should be cautious about rejecting such filings; defects should be cured without prejudicing limitation where Section 14 applies.
Reducing Incentives for Dilatory Tactics: The Division Bench explicitly recognized that the respondent’s preliminary objections continually delayed merits adjudication. The decision therefore may curb strategic technical objections that aim to defeat Section 34 petitions without engaging the award on merits.
Uniformity Within the High Court: The decision underscores that roster or bench allocation is an administrative matter. It should not affect maintainability or lead to dismissal where the statutory remedy is properly invoked in substance.

Complex Concepts Simplified

Section 34 (Arbitration Act, 1996): The mechanism to ask a court to set aside an arbitral award. There is a strict time limit: three months from receipt of the award, extendable by at most 30 more days if sufficient cause is shown—“but not thereafter.” Courts cannot use Section 5 of the Limitation Act to extend beyond this outer limit. However, Section 14 exclusion applies before you apply the three months + 30 days computation.
Section 14 (Limitation Act, 1963): Allows exclusion of time spent in prosecuting a proceeding in good faith and with due diligence in a forum that lacks jurisdiction (or suffers a similar defect), so long as the earlier proceeding did not conclude on merits. This is not “condonation”; it is mathematical exclusion of certain days from the limitation calculation. If Section 14 applies, you treat the excluded period as if it never existed for counting limitation.
Section 10(1) (Commercial Courts Act, 2015): A forum-allocation rule: international commercial arbitration-related applications/appeals under the Arbitration Act that are filed in a High Court are to be heard by the Commercial Division (if constituted). It does not create a new cause of action; it channels the existing remedies (like Section 34) to the right bench.
International Commercial Arbitration (ICA): An arbitration is “international” when, broadly, at least one party is foreign (see Section 2(1)(f) of the Arbitration Act). Under Section 2(1)(e)(ii), the High Court is the “Court” for ICA-related court proceedings.
Return vs. Rejection (Order VII Rule 10 CPC): “Return” of a pleading means the court lacks jurisdiction and sends it back to be filed before the proper court. This is very different from “rejection,” which is a dismissal. Return is compatible with later refiling and supports Section 14 exclusion if done bona fide.
Substance over Caption: Courts often treat miscaptioned filings by their contents. If a document substantively seeks to set aside an arbitral award, a wrong title (e.g., accompanying a Section 10(1) application) should not defeat maintainability.
Registry/Roster Issues: Administrative allocation to a “Division Bench” or “Single Bench” is an internal matter. Such issues must not translate into findings that a remedy is unavailable in law.

How the Court Applied These Principles to the Facts

Existence of a Section 34 Application: The contractor had originally filed a Section 34 petition in the State Commercial Court. After that court returned it for want of jurisdiction, the contractor promptly brought it to the High Court. Even though it traveled with or through an application referencing Section 10(1) of the Commercial Courts Act, the substance was a Section 34 challenge. The Single Judge’s conclusion that no Section 34 petition existed was set aside.
Limitation Neutralized via Section 14 Exclusion: The Division Bench found the contractor had prosecuted the matter with due diligence and good faith. The time spent before the wrong forum (and the period consumed due to registry-related obstacles) warranted exclusion. The Court therefore refused to dismiss the Section 34 petition on limitation and remanded it for a merits hearing.
Pragmatic Approach to Defects: The Court emphasized a pragmatic approach in arbitration-related court proceedings. Technicalities should not overshadow adjudication of rights, especially where the litigant’s intent to pursue the correct remedy was clear and continuous.

Practical Takeaways for Practitioners

When a Section 34 petition is returned under Order VII Rule 10 CPC, immediately refile in the competent court and carefully record dates. Maintain evidence of diligence and good faith—these will underpin a Section 14 plea.
Always serve the prior notice mandated by Section 34(5) and ensure your filings contain verification and affidavits per local High Court and Arbitration Rules. While defects may not be fatal, curing them early avoids friction.
If a registry insists on routing through a Section 10(1) Commercial Courts Act application, annex the complete Section 34 petition and reliefs. Make it unmistakable from the contents that you seek setting aside of the award.
Raise Section 14 exclusion expressly in your pleadings or at least in written submissions, explaining diligence, good faith, and the jurisdictional defect of the earlier forum. Although this judgment accepted a non-formalized Section 14 plea, best practice is to plead it clearly.
Respondents should weigh whether preliminary objections truly aid efficient resolution. Courts may view purely technical objections that multiply proceedings as dilatory.

Conclusion

This decision strengthens the pro-arbitration, justice-oriented approach to Section 34 proceedings in India. It reaffirms three interlocking messages:

Courts must look at what a filing is, not just how it is styled: substance over form.
Section 14’s protective exclusion applies to Section 34 challenges—ensuring bona fide litigants are not penalized for jurisdictional missteps.
Administrative or procedural complexities (registry defects, roster shuttling, captioning quirks) must not eclipse a merits determination where the statutory remedy is otherwise squarely invoked.

By setting aside the technical dismissal and remanding the matter for a merits hearing, the Rajasthan High Court re-centers arbitration challenges on substantive scrutiny rather than procedural landmines. This judgment will likely guide future cases—especially in international commercial arbitration—towards measured, non-technical adjudication and a more consistent application of Section 14 to preserve legitimate challenges within the strict timelines of Section 34.