Delhi High Court | Arbitral Award Vitiated by 19-Month Delay in Pronouncement | Unexplained Delay Violates Fairness and Public Policy Under Section 34 A&C Act
Safiya Malik
The High Court of Delhi Single Bench of Justice Jasmeet Singh has set aside an arbitral award dated 27 November 2017 on the ground that it was rendered after an inordinate delay of 19 months from the conclusion of proceedings. The Court held that such a delay in pronouncement contravenes the most basic notions of justice and therefore falls within the ambit of “public policy of India” under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996. The Court directed that the arbitral award be quashed solely on the ground of delay, without delving into the merits of the dispute, and disposed of the petition accordingly.
The matter concerned a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside an arbitral award dated 27 November 2017. The arbitral proceedings had arisen out of a contractual dispute regarding the Design Built Maintenance and Rental Contract for Temporary Accommodation using Tensile Fabric at the Commonwealth Games Village, awarded through a global tender process.
The contractual background began with the formation of a consortium between M/s GL Event Services and M/s Meroform (India) Pvt. Ltd., which subsequently incorporated a joint venture company, GL Litmus Events Pvt. Ltd., to execute the project. The Delhi Development Authority accepted the bid of the joint venture on 2 March 2010. Pursuant to the Letter of Acceptance, the joint venture furnished performance bank guarantees amounting to Rs. 2,06,89,513/-. A formal agreement dated 12 April 2010 followed, defining the scope as providing identified goods and services on a rental basis, with a structured payment schedule outlined in Annexure II.
The project was divided into three phases, with stipulated completion timelines. The scope of work included dining halls, resident centres, religious centres, driver lounges, police posts, watch towers, security fences, and other temporary structures. The petitioner raised a total of 18 invoices for the work done. Disputes arose as the respondent did not release the claimed amounts in full, prompting the petitioner to invoke the arbitration clause by letter dated 2 January 2013.
Multiple arbitrators were appointed and resigned before the final arbitrator was appointed on 29 April 2015. The impugned award dated 27 November 2017 dismissed all 16 claims raised by the petitioner. Aggrieved, the petitioner filed a Section 34 challenge, restricting its challenge to nine of the rejected claims.
The petitioner, represented by senior counsel, argued that the award should be set aside on multiple grounds. Primarily, it was submitted that the award was rendered after 19 months from the conclusion of hearings, violating principles of natural justice. It was also argued that the arbitral process was flawed as it relied on unproved documents denied during admission/denial and disregarded the petitioner’s evidence, thus violating Sections 18, 19, 24, 28, and 34 of the 1996 Act.
On merits, the petitioner challenged the reliance placed by the arbitrator on Measurement Books 1 to 8, which bore endorsements of “Bills and Measurements Accepted.” It was contended that these were unilaterally prepared by the respondent contrary to contractual clauses and under duress, while the 9th and final Measurement Book had been endorsed “without prejudice to our claims under arbitration.” The petitioner maintained that these measurement records were not final and had been re-recorded in the final book.
The petitioner further contended that the plea of duress raised during arbitration was ignored by the arbitrator and that invoices compliant with contractual clauses were disregarded without reasons.
The respondent, represented by senior counsel, argued that delay in pronouncement was not fatal to the award and that the complexity and volume of the record justified the time taken. It was submitted that the agreement was in the nature of a works contract, with Measurement Books forming the basis of determining quantities executed. The respondent stated that the petitioner had endorsed each Measurement Book and corresponding Running Account Bills without reservations, barring the 9th final bill.
It was further contended that the plea of duress was not specifically pleaded and was raised only during oral submissions, without supporting evidence. The respondent argued that the petitioner failed to deny the existence of the measurement records or signatures thereon and had not led evidence to substantiate claims of excess work done. It was submitted that under Section 34, the scope of interference is limited and does not extend to reappreciation of evidence.
Justice Jasmeet Singh recorded the limited scope of interference under Section 34 of the 1996 Act, observing that “the Court does not sit in appeal over the Award or review the Award passed by the Arbitral Tribunal nor re-appreciates the evidence.” The Court noted that interference is warranted only if the award falls within the grounds stipulated in Section 34, including conflict with the public policy of India.
The Court referred to the Supreme Court judgment in OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd., observing that “to bring the contravention within the fold of fundamental policy of Indian law, the award must contravene all or any of such fundamental principles that provide a basis for administration of justice and enforcement of law in this country.” It was further stated that violation of the principles of natural justice and delays that undermine fairness could qualify as such contravention.
In addressing the petitioner’s argument regarding delay, the Court stated: “The principle of justice delayed is justice denied has been repeatedly emphasized by the Hon’ble Supreme Court… Although the said judgment was given in the context of judicial proceedings, however the principle applies with equal force to the arbitral proceedings to deliver the Arbitral Award timely.”
The Court extensively referred to precedents including Harji Engg. Works (P) Ltd. v. Bharat Heavy Electricals Ltd., BWL Ltd. v. Union of India, Satya Parkash & Brothers Pvt. Ltd. v. North Delhi Municipal Corporation, Gian Gupta v. MMTC Ltd., CRPF v. Fibroplast Marine (P) Ltd., Department of Transport v. Star Bus Services (P) Ltd., and HR Builders v. Delhi Agricultural Marketing Board. These cases had set aside arbitral awards solely on the ground of delay in pronouncement, ranging from delays of 18 months to six years.
In particular, the Court observed: “Arbitrators are human beings whose ability to recollect oral submissions and evaluate evidence diminishes over a period of time. The delay is not a mere procedural lapse rather it causes substantive prejudice to the parties as it strikes at the heart of fairness in adjudication.”
It was recorded that both parties had written to the arbitrator urging for expeditious delivery of the award, reflecting anxiety and loss of faith in the process. The Court noted: “Keeping an Award reserved for an unexplained long period fades away the effect of oral arguments advanced by the parties.” The Court stated that “from the aforesaid judgments, it is discernible that Harji Engg. Works (P) Ltd. has been consistently followed by this Court to set aside an Award only on the ground of delay in pronouncement.”
The Court distinguished contrary views expressed in Peak Chemical Corporation v. National Aluminium Co. Ltd. and Union of India v. Niko Resources Ltd., noting that those cases turned on peculiar facts such as the death of the arbitrator and long pendency of disputes.
Ultimately, the Court held: “Keeping in view the objectives of the 1996 Act which are speedy and expeditious disposal, an inordinate delay is contrary to the public policy of India which is a ground under section 34 of 1996 Act. The common thread running through most of the judgments reproduced above clearly show that this Court has repeatedly set aside Awards purely on the ground of delay without going into the merits of the dispute.”
In its conclusion, Justice Jasmeet Singh stated: “For the foregoing reasons, I am of the view that the Award dated 27.11.2017 is against the ‘public policy of India’ covered under section 34(2)(b)(ii) of 1996 Act as it contravenes the most basic notions of justice as the Award has been pronounced after 19 months of conclusion of proceedings.” The Court further recorded: “In view of the binding judgment of BWL Ltd. and relying on Harji Engg. Works (P) Ltd. and Gian Gupta, the Arbitral Award dated 27.11.2017 is hereby set aside.”
Advocates Representing the Parties
For the Petitioners: Mr. P.V. Kapur, Senior Advocate with Mr. Vijay M. Phadke, Ms. Manali Singhal, Mr. Santosh Sachin, and Mr. Deepak Singh Rawat, Advocates.
For the Respondents: Mr. Ramesh Singh, Senior Advocate with Ms. Shobhana Takiar, Standing Counsel, with Ms. Chand Chopra, Ms. Neha Bhupathiraju, Ms. Mage Nanya, and Mr. Kuljeet Singh, Advocates.
Case Title: GL Litmus Events Pvt. Ltd. v. Delhi Development Authority
Neutral Citation: 2025: DHC:7609
Case Number: O.M.P. (COMM) 189/2018 & I.A. 47338/2024
Bench: Justice Jasmeet Singh
