Two-Year Delay In Pronouncing Arbitral Award Not Enough To Set It Aside: Delhi High Court

The Delhi High Court has held that a two-year delay in pronouncing an arbitral award cannot, by itself, be a ground to set aside the award unless the delay is unexplained and is shown to have adversely affected the findings.

A Division Bench of Justice C. Hari Shankar and Justice Vinod Kumar made the observation while setting aside a single judge's order.

The order had set aside a ₹65.12 crore arbitral award in favour of Unison Hotels Private Limited against IFFCO Tokio General Insurance Company Limited

“Delay in its rendition does not vitiate an arbitral award, unless it is positively demonstrated and held that the delay fatally impacted the findings in the award,” the bench observed.

The award was reserved for pronouncement on March 6, 2021, but was pronounced on March 6, 2023. The high court held that the single judge had not identified any specific finding in the award that was adversely affected by the delay.

A mere possibility that the arbitrators had forgotten arguments was insufficient to set aside the award.

The bench noted that the arbitral tribunal had discussed the issues “threadbare”. It also pointed out that IFFCO Tokio had not identified a single argument advanced before the tribunal that was not considered while rendering the award.

The court further found that the delay was not unexplained. It noted that the proceedings covered the COVID-19 pandemic and that there had also been considerable delay by the parties in filing written submissions despite deadlines fixed by the tribunal.

The Division Bench therefore quashed the single judge's order and remanded the Section 34 challenge for fresh consideration.

For Appellant (Unison Hotels Private Limited): Senior Advocate Darpan Wadhwa and Rajiv Nayar, with Advocates Ajay Bhargava, Shivank Diddi, Arsh Alok and Sanjana.

For Respondent (IFFCO Tokio General Insurance Company Limited): Senior Advocate A.S. Chandhiok with Advocates Bindu Saxena, Tanpreet Gulati, Aparajita Swarup and Dhruv Chandra Saxena.