Arbitration Award Challenge Not Inadmissible Solely For Lack Of Condonation Of Delay Plea: Allahabad High Court

The Allahabad High Court has recently reiterated that a challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act does not become not maintainable merely because it is not accompanied by a separate application seeking condonation of delay.

The court said what matters is whether the party has, in the petition itself, set out reasons for the delay or sought the benefit of limitation law, and whether the court has applied its mind to those pleadings.

Justice Jaspreet Singh, however, relying on earlier precedents, made it clear that courts cannot mechanically excuse delay simply because a petition is filed within the additional 30-day window allowed under the law.

“It is not merely because the application under Section 34 of the Act of 1996 was not accompanied by a separate application seeking condonation of delay, per se would make the application not maintainable without considering as to whether in the pleading any ground was set out for condonation of delay or for grant of benefit of Section 14 of the Limitation Act or any prayer was made to the aforesaid effect or not,” the court said.

The dispute arose after Paradigm Enterprises, acting as an authorised distributor of Genebio Healthcare, secured a government order to supply 20 lakh Covid-19 sample collection kits through the GeM portal.

The kits were supplied directly to the Uttar Pradesh Medical Supplies Corporation. While Paradigm received the full payment, the amount was not passed on to Genebio. The company then approached the MSME Facilitation Council, which passed an award in its favour on September 27, 2023.

Paradigm challenged the award before the Commercial Court in Lucknow under Section 34. Genebio objected, saying the challenge was filed beyond the three-month limitation period and that no application had been moved seeking condonation of delay.

Genebio argued that the award was received on October 6, 2023, the limitation expired on January 6, 2024, and the Section 34 petition was filed only on January 16, 2024. Despite this, the Commercial Court rejected the limitation objection.

The High Court found fault with that approach. It said the Commercial Court had failed to examine whether there were any pleadings seeking condonation of delay or claiming the benefit of Section 14 of the Limitation Act. The delay was condoned solely on the assumption that earlier proceedings before the High Court kept the challenge within time.

According to the court, the order rejecting the objection on limitation is "patently perverse.”

“It suffers from the vice of being non-reasoned and an arbitrary exercise of jurisdiction.”

The High Court set aside the Commercial Court's order on limitation and remanded the matter for fresh consideration, directing the court to decide the issue after examining the pleadings and applying its judicial mind.