Timeline To Pass Arbitral Award Inapplicable If Arbitration Invoked Before 2015 Amendment: Delhi High Court

The Delhi High Court, in a family partnership dispute, has held that timelines introduced under the amended arbitration law for passing arbitral awards would not apply since arbitration had first been invoked before the amendment came into force.

The 2015 amendment introduced a 12-month deadline for arbitral tribunals to make an award from the date they entered upon reference, extendable by six months with parties' consent.

A division bench of Justices Prathiba M. Singh and Madhu Jain held, “Under such circumstances, the arbitration clause having been invoked prior to the Amendment Act, 2015 coming into existence, the time limits stipulated under Section 29A of the Act would not be applicable to the facts of this case.”

The court dismissed an appeal filed by Prem Lata Surekha challenging an arbitral award in favour of Chakradhari Surekha. It also imposed costs of Rs 1 lakh on her, noting that she had rejected reasonable proposals for amicable resolution and that her conduct was not bona fide.

The dispute arose from a partnership firm constituted in April 1973 between Prem Lata Surekha, Chakradhari Surekha and Nityanand Yadav. The firm was reconstituted in July 1974, and the partnership deed contained an arbitration clause.

According to the case record, Chakradhari alleged that he had been excluded from the affairs of the partnership and that disputes had arisen over the firm's property in Naraina, New Delhi.

He first invoked arbitration through a notice dated March 23, 2015, seeking dissolution of the partnership. Prem Lata opposed arbitration, disputing the applicability of the 1974 partnership deed and claiming Chakradhari had retired from the firm. A second notice invoking arbitration was issued on July 12, 2016.

The sole arbitrator, in an award dated January 2, 2023, held that Prem Lata was only a partner on paper and that the 1974 partnership continued until March 23, 2015, when Chakradhari issued the dissolution notice. The arbitrator also rejected the contention that the claim was barred by delay.

Prem Lata's challenge to the award was dismissed by a single judge in February 2025, following which she filed the present appeal.

Before the division bench, her principal argument was that the arbitrator's mandate had expired because the second notice invoking arbitration was issued after the amended law had come into force.

Rejecting the contention, the court held that arbitral proceedings had commenced when the first notice invoking arbitration was sent in March 2015.

“In any event, in the present case, there is no doubt that since the invocation of arbitration is prior to the Amendment Act, 2015 coming into existence, the time limits prescribed therein would not apply,” the court observed.

The bench also said nothing on record suggested that the parties had opposed continuation of the arbitrator's mandate. It declined to re-examine the arbitral tribunal's factual findings, noting the limited scope of interference in such appeals.