Bombay High Court Sets Aside Arbitral Award Made Without Hearing After Four-Year Delay
Deekshitha Sharmile
The High Court of Bombay Single Bench of Justice Sandeep V. Marne has set aside an arbitral award that rejected a government contractor’s monetary claims arising from an annual maintenance contract for railway air-conditioning units, holding that the award was delivered after an unexplained four-year lull and without any hearing. The Court found the sole arbitrator moved abruptly to close the matter after prolonged inaction, did not record evidence, and did not hear arguments or the parties before deciding. Rejecting the arbitrator’s reliance on pandemic-related constraints, the Bench described the delay explanation as “factually incorrect” and held that the process breached natural justice. The Section 34 challenge was allowed and the award was annulled, with no order on costs.
The petitioner, a government contractor engaged in railway maintenance work, was awarded a contract for annual maintenance of equipment in AC coaches across multiple divisions for a three-year period commencing September 2010. The petitioner claimed to have executed work beyond the contractual period until December 2013, raising disputes over payments. Arbitration was invoked in 2012 and again in 2014, leading to the appointment of a sole arbitrator in August 2015.
The petitioner filed its statement of claim in December 2015, while the respondent filed its defence in July 2016. Only one arbitration meeting was held in June 2017, after which no further hearings took place. The petitioner sought substitution of the arbitrator in March 2021, citing expiry of mandate. Despite objections, the arbitrator delivered an award in May 2021 rejecting all claims.
The petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, contending that it was passed after termination of mandate and without proper hearings. Reliance was placed on precedents addressing delay and mandate expiry. The respondent argued that the arbitration was invoked prior to insertion of Section 29A and that the award was validly delivered.
Justice Sandeep V. Marne recorded: “The learned sole Arbitrator conducted only one hearing on 17 June 2017 and thereafter failed to conduct any proceedings nor held any meetings for a considerable period of time.”
The Court stated: “After receipt of request for substitution, the General Manager ought to have substituted the Arbitrator. The Petitioner had not requested the General Manager to direct the learned Arbitrator to fix date of hearing.”
It was observed: “Without hearing the parties, the Arbitral Tribunal straightaway proceeded to make Award dated 31 May 2021. Thus, the Award is made without conducting any hearing and without affording any opportunity of hearing to the parties.”
The Court noted discrepancies: “Describing three dates of meetings when no real business was conducted as ‘many occasions’ by the learned Arbitrator exposes his unfair mind and non-judicious approach, again constituting a valid ground for setting aside the Award.”
On delay, the Court recorded: “The Tribunal which had not conducted any meetings for 4 long years, hurriedly fixed the hearing on 28 April 2021, rescheduled the same to 20 May 2021, never conducted the said meeting and exhibited undue haste in making the Award on 31 May 2021.”
The Court referred to precedent: “Delay in the delivery of an arbitral award, by itself, is not sufficient to set aside that award. However, each such case would have to be examined on its own individual facts to ascertain whether that delay had an adverse impact on the final decision of the arbitral tribunal.”
It was further stated: “The findings recorded in the Award clearly exhibit the effect of delay on the mind of the arbitrator, who has merely completed the formality of delivery of award after learning that his substitution was sought.”
The Court concluded: “The Arbitrator has acted in gross violation of principles of natural justice. He has also given false pretext of Covid-19 pandemic to explain delay when there was no pandemic. He has decided arbitral proceedings without conducting any real hearing.”
The Court directed: “This Court has constituted the new Arbitral Tribunal vide Order dated 22 September 2025, which is yet another reason why the Award needs to be set aside so that there is proper adjudication of claims of Petitioner and defences of the Respondent.”
It further ordered: “The Petition accordingly succeeds. The impugned Award dated 31 May 2021 is set aside. The Petition is accordingly allowed. Considering the facts and circumstances of the case, there shall be no orders as to costs.”
Advocates Representing the Parties
For the Petitioners: Ms. Minakshi Jyoti with Mr. Anmol Jain i/b. Dr. Prem S. Motiramani
For the Respondents: Mr. Narayan R. Bubna
Case Title: M/s. Amit Engineers v. Union of India and Anr.
Neutral Citation: 2025:BHC-OS:24764
Case Number: Commercial Arbitration Petition No.847 of 2024
Bench: Justice Sandeep V. Marne
