Delhi High Court | Procedural Rules Are Handmaidens Of Justice | Arbitral Tribunal Empowered To Extend Timelines For Filing Defence And Counter-Claim
Sanchayita Lahkar
The High Court of Delhi Single Bench of Justice Manoj Jain has dismissed a petition challenging the arbitral tribunal's decision to condone the delay in filing the statement of defence and counter-claim. The Court held that the tribunal retained the power to extend the timelines in the interest of justice and observed that procedural rules are meant to guide and not bind. The petition was dismissed in limine, with the Court refusing to interfere with the arbitral process under Article 227 of the Constitution of India.
The matter arose from arbitral proceedings initiated in accordance with the Rules of Domestic Commercial Arbitration of the Indian Council of Arbitration (ICA Rules) 2024. The petitioner, as claimant before the arbitral tribunal, filed its statement of claim along with the request for arbitration. On 6 December 2024, the ICA Registrar forwarded the statement of claim and accompanying documents to the respondent. Under Rule 18(a) of the ICA Rules, the respondent had 30 days, i.e., until 6 January 2025, to file its statement of defence and counter-claim, if any. The respondent sought an extension of 30 days, which was granted by the ICA via email on 7 January 2025, extending the deadline to 5 February 2025.
Despite this extension, the respondent did not file its statement of defence within the stipulated period. Instead, it requested a further extension of 12 weeks. Subsequently, the ICA constituted the arbitral tribunal, notifying parties that 12 April 2025 had been fixed as the first date of hearing. The respondent eventually filed its statement of defence and counter-claim on 14 April 2025. The petitioner objected to this late filing, arguing that the extension beyond the 60-day maximum period under Rule 18(a) was impermissible.
The petitioner contended that the arbitral tribunal lacked competence to grant any extension beyond the scope of Rule 18(a) of the ICA Rules. The petitioner relied on Section 2(8) and Section 25 of the Arbitration and Conciliation Act, 1996. Section 2(8) provides that agreements referring to arbitration rules are included within party agreements, while Section 25(b) states that if the respondent fails to communicate its statement of defence in accordance with Section 23(1), the arbitral tribunal shall continue the proceedings without treating that failure as admission of allegations and shall have discretion to treat the right of the respondent to file such defence as forfeited.
The petitioner argued that there was no agreement between the parties for further extension of time and that the arbitral tribunal could not condone delay beyond Rule 18(a). Consequently, the petitioner sought directions to strike off the respondent's statement of defence and counter-claim from the record.
The arbitral tribunal, however, dismissed the claimant's application, holding that it had jurisdiction to extend the timelines in the interest of justice. The tribunal reasoned that the ICA Rules, being institutional and not statutory, provided guiding timelines but did not preclude the tribunal from granting extensions where sufficient cause was shown. The tribunal further noted that precedents cited by the claimant related to statutory provisions, whereas the ICA Rules did not carry such statutory force. It therefore condoned the delay and admitted the respondent’s filings.
The petitioner approached the High Court under Article 227 of the Constitution of India, challenging the arbitral tribunal’s decision. The petitioner argued that the tribunal had acted beyond its powers and that the delay condonation violated ICA Rules, rendering the respondent’s statement of defence and counter-claim inadmissible.
Justice Manoj Jain recorded that “the scope of interference, while dealing with any such petition under Article 227 of Constitution of India, in such type of arbitration matters, is very constricted one.” The Court referred to Kelvin Air Conditioning & Ventilation System (P) Ltd. v. Triumph Reality (P) Ltd., 2024 SCC OnLine Del 7137, where it was stated that judicial interference under Article 227 in arbitration matters has to be minimal and reserved for exceptional circumstances. The Court further noted the precedent of IDFC First Bank Limited v. Hitachi MGRM Net Limited, 2023 SCC OnLine Del 4052, which enumerated circumstances where such petitions may be entertained. The observations in that case included that while a remedy under Articles 226 and 227 is available against arbitral tribunal orders, “such challenges are not to be entertained in each and every case and the court has to be ‘extremely circumspect’.”
The Court cited further principles from Surender Kumar Singhal v. Arun Kumar Bhalotia, 2021 SCC OnLine Del 3708, which summarized circumstances for interference. These included that interference was permissible only in exceptional circumstances, where orders were absolutely perverse or patently lacking jurisdiction, or where bad faith was shown.
Justice Jain observed that “nothing of that kind exists here.” He noted that the arbitral tribunal had observed it had power to extend timelines in the interest of justice. The tribunal considered that though ICA Rules provided timelines, these were not statutory provisions. The tribunal reasoned that “procedure is the handmaiden of justice.” The tribunal further recorded that ICA Rules intentionally did not employ limiting words such as “not exceeding” or “but not thereafter” in Rule 18(a), unlike certain statutory provisions. This indicated that flexibility was permissible under the Rules.
The tribunal had stated: “The Arbitral Institute has not been delegated any power under the Act and even it had been so, the same would have fallen foul of excessive delegation in the face of a statutory provision to the contrary. The Tribunal is equally aware of its responsibility to ensure that complete justice be done; that despite the statutory mandate of 6 months to complete pleadings, the Tribunal retains the power to extend the timelines in the interest of justice.” The tribunal also observed that the respondent’s filing was within the extended time granted and that the sufficiency of grounds for extension was not challenged by the claimant.
Justice Jain, relying on these observations, held that the reasoning of the tribunal did not warrant interference. He stated: “This Court would also vouch that the Rules are meant to guide and not bind. Arbitral Tribunal cannot be reduced to a powerless creature. Whenever it finds that any party was prevented by any sufficient cause, it has ample power to condone the delay in interest of justice, irrespective of the Rules in question which are, even otherwise, more of procedural nature.”
The Court reiterated that procedural rules are meant to be interpreted liberally, as rigid interpretation might render the arbitral process redundant. Thus, the Court refused to interdict the arbitral process at an interlocutory stage.
Justice Manoj Jain dismissed the petition at the threshold. The Court directed: “This Court, therefore, does not find any reason to interfere with the impugned order and the petition is, accordingly, dismissed in limine. Pending applications stand disposed of in aforesaid terms.”
Advocates Representing the Parties:
For the Petitioners: Mr. Sidhant Goel with Mr. Mohit Goel, Mr. Aditya Maheshwari and Mr. Ishaan Pratap Singh, Advocates.
For the Respondents: Mr. Anand Kumar with Ms. Ishita Jain, Mr. Ankit Bhandari and Mr. Ekshat Punwani, Advocates.
Case Title: Aneja Constructions (India) Ltd. v. Doosan Power Systems India Pvt. Ltd. and Anr.
Neutral Citation: 2025: DHC:6590
Case Number: CM(M) 1419/2025 & CM APPL. 46709-46710/2025
Bench: Justice Manoj Jain
