Contractual arbitration time limits cannot override the Limitation Act where the governing statute does not authorise a separate limitation period.

A stock exchange bye-law that required disputes to be referred to arbitration within six months was treated as a contractual time restriction, not a statutory limitation regime, because the parent securities law did not authorise the exchange to create a separate limitation period for arbitration. Once the Arbitration and Conciliation Act, 1996 applied the Limitation Act through Section 43, the contractual curtailment of time was void to that extent under Section 28 of the Contract Act. The document also notes that parties who had agreed to arbitration could not revive earlier civil suits merely because the arbitral reference was said to be time-barred; the agreed dispute-resolution mechanism remained binding.

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Issues: (i) whether the stock exchange bye-law limiting reference of disputes to arbitration within six months was a contractual restriction void to that extent under Section 28 of the Contract Act, or a special/local law excluding the Limitation Act; (ii) whether, on the arbitration reference being found time-barred, the claimants could fall back upon the previously instituted civil suits.

Issue (i): whether the stock exchange bye-law limiting reference of disputes to arbitration within six months was a contractual restriction void to that extent under Section 28 of the Contract Act, or a special/local law excluding the Limitation Act.

Analysis: The arbitration arose under the NSE bye-laws, which were framed under the Securities Contracts (Regulation) Act, 1956, but the statute only authorized bye-laws regulating contracts and the method and procedure for settlement of claims or disputes. It did not empower the exchange to prescribe a separate period of limitation for initiating arbitration. The six-month restriction therefore operated at the stage of enforcing the contractual remedy and was not a statutory limitation regime. Once the Arbitration and Conciliation Act, 1996 made the Limitation Act applicable through Section 43, any contractual term curtailing the time for enforcement of rights became subject to Section 28 of the Contract Act. The awards had rejected the challenge by relying on an earlier understanding of Section 28, but that reasoning was inconsistent with the amended legal position.

Conclusion: The six-month restriction in the bye-law was contractual and void to that extent; the claims were not barred by that provision and remained governed by the Limitation Act.

Issue (ii): whether, on the arbitration reference being found time-barred, the claimants could fall back upon the previously instituted civil suits.

Analysis: The earlier suits had been referred to arbitration on the basis that the parties were bound by the arbitration clause in the bye-laws. The Court held that the parties were required to abide by the agreed dispute-resolution mechanism and could not treat arbitration as optional or contingent so as to resurrect the civil suit only if the arbitral forum refused relief on limitation. The reference to Section 89 of the Code of Civil Procedure, 1908 was only for the limited purpose of obtaining procedural consequences and did not create a fresh contractual basis for civil adjudication. The plea that the respondent was precluded from objecting because it had sought arbitration was also rejected.

Conclusion: The claimants were not entitled to revive the civil suits as an alternative remedy on the basis of the arbitral limitation objection.

Final Conclusion: The arbitral awards were set aside, and the disputes were left open for adjudication in arbitration without the impugned six-month bar.

Ratio Decidendi: A contractual or bye-law prescription that truncates the time for initiating arbitration is void to that extent when the governing arbitration law makes the Limitation Act applicable and the parent statute does not authorize the prescription of such limitation.

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