Report No. 176
28. Amendment of section 43
In section 43 of the principal Act, (a) in sub-section (3), the following Explanation shall be inserted at the end, namely:-
"Explanation.- For removal of doubts, it is hereby declared that any provision in the arbitration agreement which provides that any such claim shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, shall be deemed to be void from the date of commencement of the Indian Contract (Amendment) Act 1996.".
(b) after sub-section (4), the following sub-section shall be inserted, namely:-
"(5) In computing the time prescribed by the Limitation Act, 1963 (36 of 1963) for the commencement of proceedings in relation to any dispute, the period between the commencement of the arbitration and the date of the orders mentioned below, shall be excluded ,namely:-
(a) an order of the arbitral tribunal accepting a plea referred to in sub-section (2) or sub-section (3) of section 16;
(b) an order under clause (a) of sub-section (2) of section 37 by the court affirming an order under clause (a) or an order of the Supreme Court on further appeal, if any, affirming the last mentioned order;
(c) an order declaring an arbitration agreement as null and void or inoperative or incapable of being performed or as not in existence, passed by -
(i) the High Court under sub-section (13) of section 11 in the case of an arbitration other than an international arbitration (whether commercial or not) or by the Supreme Court on further appeal;
(ii) the Supreme Court under sub-section (13) of section 11 in the case of an international arbitration (whether commercial or not)."