WhatsApp Acknowledgment Of Arbitral Award Shows Acceptance, Bars Delayed Challenge: Delhi High Court

The Delhi High Court has dismissed a challenge to an interim arbitral award after finding that the party seeking to set it aside had acknowledged receiving it on WhatsApp, participated in discussions on its implementation, and acted upon it before questioning the award only after execution proceedings were initiated.

The court held that the challenge to the interim arbitral award, raised more than two years after the petitioner admittedly acquired knowledge of it was barred by limitation. 

Justice Harish Vaidyanathan Shankar observed that the petitioner's conduct showed he had accepted and acted upon the award, and that his plea regarding non-delivery of a signed copy surfaced only after the award holders initiated execution proceedings.

"The material placed on record unmistakably demonstrates that immediately after the Award was uploaded in the WhatsApp group created for resolution of the disputes, the Petitioner acknowledged receipt thereof by responding 'Noted thanks'. Such acknowledgement was not a mere formal response but was followed by continuous discussions amongst the parties regarding the implementation of the Award.", the court noted,

The dispute arose among brothers of the Mawandia family, who had earlier carried on a family business together. They executed a memorandum of understanding in 2019 to divide certain family and group company properties. After disputes arose between them, they entered into an arbitration agreement in June 2021.

An arbitral tribunal subsequently passed an interim award concerning two family properties, directing the parties to execute transfer and gift deeds, obtain bank no-objection certificates and complete other consequential formalities required to implement the arrangement.

The award holders later initiated execution proceedings. Vinay Mawandia then approached the High Court seeking to set aside the award, claiming that he became aware of the signed copy only after execution proceedings commenced. He also contended that the award issued directions concerning the ownership rights of Madhu Mawandia, who was not a signatory to the arbitration agreement, and that only two of the three arbitrators had signed it.

The award holders argued that Vinay Mawandia had acknowledged the award in November 2021, participated in discussions regarding its implementation and could not challenge it nearly three years later.

They relied on WhatsApp exchanges showing discussions on transfer deeds, gift deeds, bank no-objection certificates, removal of movables and other consequential steps required to give effect to the award.

The court found that the petitioner's acknowledgement of the award was followed by active participation in discussions on its implementation. It observed that he participated in discussions relating to implementation of the award, suggested modifications to draft deeds and raised conditions regarding execution of the transfer documents.

"Having consciously accepted the Impugned Award as a consensual resolution of their disputes and having acted upon the same without protest, the Petitioner cannot now be permitted to approbate and reprobate by questioning the very Award which had been accepted and sought to be implemented.", the court observed.

The court also noted that although the petitioner claimed he had not received a signed copy of the award, he neither sought one from the arbitral tribunal after admittedly becoming aware of the award in November 2021 nor raised any grievance regarding its non-delivery for nearly two years.

It further observed that he neither sought condonation of delay nor explained why he waited for more than two years after acquiring knowledge of the award before challenging it.

"A consensual and mutually accepted award carries with it a higher degree of sanctity, and absent any allegation of fraud, coercion or vitiating circumstances, a party cannot be permitted to resile from the settlement merely because it has subsequently had a change of heart.", the court observed.

Holding that the petitioner had knowledge of the award in November 2021, acknowledged and acted upon it without protest, did not seek a signed copy from the arbitral tribunal or explain the delay, and challenged the award only after execution proceedings had been initiated, the court dismissed the petition as barred by limitation.

For Award Debtor: Advocates Amit Bhagat and Arzoo Raj.

For Award holders: Advocates Niyati Kohli, Rishabh Parikh and Pratham Vir Agarwal.