Always use time limit. Tried without for a short time but had 2 or 3 battles where I was defending and greatly outnumbered yet the AI sat there. Only way to end the battle would be to attack the AI (suicide) or end the battle with a loss. At least if the AI attacked me I'd be able to inflict reasonable losses on it before I'd have lost.

Anyway, after those 2 or 3 experiences, I went back to always using the timer.