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  • Writer's pictureTrivedi and Parashar (Advocates and Solicitors)

Judicial Updates-

Delhi High Court - Arbitral award passed after an unjustified delay is contrary to justice and public policy.

In the ๐˜‹๐˜ฆ๐˜ฑ๐˜ข๐˜ณ๐˜ต๐˜ฎ๐˜ฆ๐˜ฏ๐˜ต ๐˜ฐ๐˜ง ๐˜›๐˜ณ๐˜ข๐˜ฏ๐˜ด๐˜ฑ๐˜ฐ๐˜ณ๐˜ต, ๐˜Ž๐˜•๐˜Š๐˜›๐˜‹ ๐˜ท. ๐˜š๐˜ต๐˜ข๐˜ณ ๐˜‰๐˜ถ๐˜ด ๐˜š๐˜ฆ๐˜ณ๐˜ท๐˜ช๐˜ค๐˜ฆ๐˜ด ๐˜—๐˜ท๐˜ต. ๐˜“๐˜ต๐˜ฅ. [O.M.P. (COMM) 495/2020], the Petitioner and the Respondent had entered into a Concessionaire Agreement to provide bus services. Eventually, disputes arose between the Petitioner and the Respondent. Therefore, to resolve the conflicts, the parties referred the matter to arbitration, and an Arbitral Award was passed in favor of the Respondent, however with a delay of 18 months after the last hearing. Aggrieved by the award passed by the arbitrator, the Petitioner initiated set-aside proceedings u/s 34 of the Arbitration and Conciliation Act, 1996 ("Act") before the Delhi High Court.


It was argued that the award was passed after a long and substantial delay of 18 months, due to the absence of a provision specifying the time limit under the arbitration agreement.

The Court observed that when there is an explicit provision relating to time limit, it is easier to determine whether there is a delay as the arbitrator is then bound by the partiesโ€™ agreement, but if there is no provision, then the Court has to examine it on a case-to-case basis. There were two issues before the High Court: first, whether undue delay can be taken as ground for challenging the Award; second, whether the delay in pronouncement of the Arbitral Award places it in conflict with the public policy of India.


While answering the first issue, the Court held that there was an unjustified gap of more than 1.5 years between the date of reserving and the date of the award. Even if there are no provisions for a time limit, the Arbitrator is under a duty to render an Award without substantial delay.


"๐˜ˆ ๐˜ญ๐˜ข๐˜ณ๐˜จ๐˜ฆ ๐˜ต๐˜ช๐˜ฎ๐˜ฆ ๐˜จ๐˜ข๐˜ฑ ๐˜ฃ๐˜ฆ๐˜ต๐˜ธ๐˜ฆ๐˜ฆ๐˜ฏ ๐˜ฉ๐˜ฆ๐˜ข๐˜ณ๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฐ๐˜ณ๐˜ข๐˜ญ ๐˜ด๐˜ถ๐˜ฃ๐˜ฎ๐˜ช๐˜ด๐˜ด๐˜ช๐˜ฐ๐˜ฏ๐˜ด ๐˜ข๐˜ฏ๐˜ฅ ๐˜ณ๐˜ฆ๐˜ฏ๐˜ฅ๐˜ฆ๐˜ณ๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฅ๐˜ฆ๐˜ค๐˜ช๐˜ด๐˜ช๐˜ฐ๐˜ฏ ๐˜ธ๐˜ฐ๐˜ถ๐˜ญ๐˜ฅ, ๐˜ช๐˜ฏ ๐˜ฆ๐˜ง๐˜ง๐˜ฆ๐˜ค๐˜ต, ๐˜ฅ๐˜ฆ๐˜ฃ๐˜ช๐˜ญ๐˜ช๐˜ต๐˜ข๐˜ต๐˜ฆ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฑ๐˜ถ๐˜ณ๐˜ฑ๐˜ฐ๐˜ด๐˜ฆ ๐˜ฐ๐˜ง ๐˜ณ๐˜ฆ๐˜ด๐˜ฐ๐˜ณ๐˜ต๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฐ ๐˜ข๐˜ณ๐˜ฃ๐˜ช๐˜ต๐˜ณ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ง๐˜ฐ๐˜ณ ๐˜ฆ๐˜น๐˜ฑ๐˜ฆ๐˜ฅ๐˜ช๐˜ต๐˜ช๐˜ฐ๐˜ถ๐˜ด ๐˜ข๐˜ฅ๐˜ซ๐˜ถ๐˜ฅ๐˜ช๐˜ค๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ฐ๐˜ง ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฅ๐˜ช๐˜ด๐˜ฑ๐˜ถ๐˜ต๐˜ฆ๐˜ด. ๐˜•๐˜ฐ ๐˜ฑ๐˜ฆ๐˜ณ๐˜ด๐˜ฐ๐˜ฏ ๐˜ค๐˜ข๐˜ฏ ๐˜ฃ๐˜ฆ ๐˜ฆ๐˜น๐˜ฑ๐˜ฆ๐˜ค๐˜ต๐˜ฆ๐˜ฅ ๐˜ต๐˜ฐ ๐˜ณ๐˜ฆ๐˜ฎ๐˜ฆ๐˜ฎ๐˜ฃ๐˜ฆ๐˜ณ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ด๐˜ข๐˜ฎ๐˜ฆ ๐˜ข๐˜ง๐˜ต๐˜ฆ๐˜ณ ๐˜ข ๐˜ญ๐˜ฐ๐˜ฏ๐˜จ ๐˜ฑ๐˜ฆ๐˜ณ๐˜ช๐˜ฐ๐˜ฅ ๐˜ฐ๐˜ง ๐˜ต๐˜ช๐˜ฎ๐˜ฆ. ๐˜๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ช๐˜ฏ๐˜ด๐˜ต๐˜ข๐˜ฏ๐˜ต ๐˜ค๐˜ข๐˜ด๐˜ฆ, ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฅ๐˜ฆ๐˜ญ๐˜ข๐˜บ ๐˜ฉ๐˜ข๐˜ด ๐˜ฏ๐˜ฐ๐˜ต ๐˜ฆ๐˜ท๐˜ฆ๐˜ฏ ๐˜ฃ๐˜ฆ๐˜ฆ๐˜ฏ ๐˜ฆ๐˜น๐˜ฑ๐˜ญ๐˜ข๐˜ช๐˜ฏ๐˜ฆ๐˜ฅ ๐˜ฃ๐˜บ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ญ๐˜ฆ๐˜ข๐˜ณ๐˜ฏ๐˜ฆ๐˜ฅ ๐˜ˆ๐˜ณ๐˜ฃ๐˜ช๐˜ต๐˜ณ๐˜ข๐˜ต๐˜ฐ๐˜ณ ๐˜ช๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ด๐˜ข๐˜ช๐˜ฅ ๐˜ˆ๐˜ธ๐˜ข๐˜ณ๐˜ฅ,"


While answering the second issue, the Court held that "๐˜๐˜ข๐˜ท๐˜ช๐˜ฏ๐˜จ ๐˜ฅ๐˜ช๐˜ด๐˜ค๐˜ถ๐˜ด๐˜ด๐˜ฆ๐˜ฅ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ข๐˜ง๐˜ฐ๐˜ณ๐˜ฆ๐˜ด๐˜ข๐˜ช๐˜ฅ, ๐˜ต๐˜ฉ๐˜ช๐˜ด ๐˜Š๐˜ฐ๐˜ถ๐˜ณ๐˜ต ๐˜ช๐˜ด ๐˜ฐ๐˜ง ๐˜ต๐˜ฉ๐˜ฆ ๐˜ท๐˜ช๐˜ฆ๐˜ธ ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ต๐˜ฉ๐˜ฆ ๐˜ข๐˜ธ๐˜ข๐˜ณ๐˜ฅ ๐˜ฑ๐˜ข๐˜ด๐˜ด๐˜ฆ๐˜ฅ ๐˜ข๐˜ง๐˜ต๐˜ฆ๐˜ณ ๐˜ข๐˜ฏ ๐˜ช๐˜ฏ๐˜ฐ๐˜ณ๐˜ฅ๐˜ช๐˜ฏ๐˜ข๐˜ต๐˜ฆ, ๐˜ด๐˜ถ๐˜ฃ๐˜ด๐˜ต๐˜ข๐˜ฏ๐˜ต๐˜ช๐˜ข๐˜ญ ๐˜ข๐˜ฏ๐˜ฅ ๐˜ถ๐˜ฏ๐˜ฆ๐˜น๐˜ฑ๐˜ญ๐˜ข๐˜ช๐˜ฏ๐˜ฆ๐˜ฅ ๐˜ฅ๐˜ฆ๐˜ญ๐˜ข๐˜บ ๐˜ธ๐˜ฐ๐˜ถ๐˜ญ๐˜ฅ ๐˜ฃ๐˜ฆ "๐˜ค๐˜ฐ๐˜ฏ๐˜ต๐˜ณ๐˜ข๐˜ณ๐˜บ ๐˜ต๐˜ฐ ๐˜ซ๐˜ถ๐˜ด๐˜ต๐˜ช๐˜ค๐˜ฆ ๐˜ข๐˜ฏ๐˜ฅ ๐˜ธ๐˜ฐ๐˜ถ๐˜ญ๐˜ฅ ๐˜ฅ๐˜ฆ๐˜ง๐˜ฆ๐˜ข๐˜ต ๐˜ซ๐˜ถ๐˜ด๐˜ต๐˜ช๐˜ค๐˜ฆ."


๐˜Š๐˜ญ๐˜ฆ๐˜ข๐˜ณ๐˜ญ๐˜บ, ๐˜ต๐˜ฉ๐˜ฆ ๐˜ˆ๐˜ธ๐˜ข๐˜ณ๐˜ฅ ๐˜ธ๐˜ฉ๐˜ช๐˜ค๐˜ฉ ๐˜ฅ๐˜ฆ๐˜ง๐˜ฆ๐˜ข๐˜ต๐˜ด ๐˜ซ๐˜ถ๐˜ด๐˜ต๐˜ช๐˜ค๐˜ฆ ๐˜ธ๐˜ฐ๐˜ถ๐˜ญ๐˜ฅ ๐˜ฃ๐˜ฆ ๐˜ช๐˜ฏ ๐˜ค๐˜ฐ๐˜ฏ๐˜ง๐˜ญ๐˜ช๐˜ค๐˜ต ๐˜ธ๐˜ช๐˜ต๐˜ฉ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฑ๐˜ถ๐˜ฃ๐˜ญ๐˜ช๐˜ค ๐˜ฑ๐˜ฐ๐˜ญ๐˜ช๐˜ค๐˜บ ๐˜ฐ๐˜ง ๐˜๐˜ฏ๐˜ฅ๐˜ช๐˜ข. ๐˜๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜จ๐˜ช๐˜ท๐˜ฆ๐˜ฏ ๐˜ค๐˜ช๐˜ณ๐˜ค๐˜ถ๐˜ฎ๐˜ด๐˜ต๐˜ข๐˜ฏ๐˜ค๐˜ฆ๐˜ด, ๐˜ต๐˜ฉ๐˜ช๐˜ด ๐˜Š๐˜ฐ๐˜ถ๐˜ณ๐˜ต ๐˜ช๐˜ด ๐˜ฐ๐˜ง ๐˜ต๐˜ฉ๐˜ฆ ๐˜ท๐˜ช๐˜ฆ๐˜ธ ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ช๐˜ฏ๐˜ฐ๐˜ณ๐˜ฅ๐˜ช๐˜ฏ๐˜ข๐˜ต๐˜ฆ ๐˜ข๐˜ฏ๐˜ฅ ๐˜ถ๐˜ฏ๐˜ฆ๐˜น๐˜ฑ๐˜ญ๐˜ข๐˜ช๐˜ฏ๐˜ฆ๐˜ฅ ๐˜ฅ๐˜ฆ๐˜ญ๐˜ข๐˜บ ๐˜ช๐˜ฏ ๐˜ณ๐˜ฆ๐˜ฏ๐˜ฅ๐˜ฆ๐˜ณ๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ˆ๐˜ธ๐˜ข๐˜ณ๐˜ฅ ๐˜ฎ๐˜ข๐˜ฌ๐˜ฆ๐˜ด ๐˜ช๐˜ต ๐˜ข๐˜ฎ๐˜ฆ๐˜ฏ๐˜ข๐˜ฃ๐˜ญ๐˜ฆ ๐˜ต๐˜ฐ ๐˜ค๐˜ฉ๐˜ข๐˜ญ๐˜ญ๐˜ฆ๐˜ฏ๐˜จ๐˜ฆ ๐˜ถ๐˜ฏ๐˜ฅ๐˜ฆ๐˜ณ ๐˜š๐˜ฆ๐˜ค๐˜ต๐˜ช๐˜ฐ๐˜ฏ 34(2)(๐˜ฃ)(๐˜ช๐˜ช) ๐˜ฐ๐˜ง ๐˜ต๐˜ฉ๐˜ฆ ๐˜ˆ๐˜ณ๐˜ฃ๐˜ช๐˜ต๐˜ณ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ข๐˜ฏ๐˜ฅ ๐˜Š๐˜ฐ๐˜ฏ๐˜ค๐˜ช๐˜ญ๐˜ช๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ˆ๐˜ค๐˜ต, ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ช๐˜ด, ๐˜ฃ๐˜ฆ๐˜ช๐˜ฏ๐˜จ ๐˜ช๐˜ฏ ๐˜ค๐˜ฐ๐˜ฏ๐˜ง๐˜ญ๐˜ช๐˜ค๐˜ต ๐˜ธ๐˜ช๐˜ต๐˜ฉ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฑ๐˜ถ๐˜ฃ๐˜ญ๐˜ช๐˜ค ๐˜ฑ๐˜ฐ๐˜ญ๐˜ช๐˜ค๐˜บ ๐˜ฐ๐˜ง ๐˜๐˜ฏ๐˜ฅ๐˜ช๐˜ข."


Furthermore, the Court also observed that the jurisdiction of the arbitrator stood terminated u/s 29(A) of the Act, which mandates that all proceedings must be completed within a period of 12 months starting from the date when the arbitral tribunal enters upon reference, and further, by the consent of the partiesโ€™, time-limit can be extended for a period of six months. If this period ends, the tribunal's mandate stands cancelled, and only a civil court can extend it.


Therefore, the Court allowed the Petition and set aside the arbitral award as being opposed to the public policy of India.

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