विलंब से नहीं रद्द होगा मध्यस्थीय फैसला, दिल्ली हाई कोर्ट ने कहा

Delhi High Court, in the case of Unison Hotels Private Limited v IFFCO Tokio General Insurance Company Limited (2026), observed that “delay in rendition of an arbitral award is not, by itself, sufficient to set it aside”. The court further held that delay becomes fatal only when unexplained and when it affects the findings.

A division bench was hearing an appeal from an award of a three-member arbitral tribunal that had reserved the award two years before pronouncing it.

Unison Hotels (Unison) insured its hotel with two policies from IFFCO Tokio General Insurance (insurance company): a standard fire and special perils policy for INR1.86 billion (USD19.3 million) and a fire loss of profit policy for INR1 billion, valid from 1 April 2007 to 31 March 2008.

On 26 January 2008, a fire broke out at the insured hotel. Unison claimed a combined value of INR1.68 billion under the policies.

However, the insurance company only paid INR500 million and submitted the claims as settled on 30 January 2012. Unison then invoked the arbitration clause common in both policies, seeking the difference between the amount paid and the amount claimed.

A three-member tribunal was formed on 27 April 2012. The tribunal reserved the award on 6 March 2021 and pronounced it on 6 March 2023, two years later.

The award was against the insurance company and in favour of Unison, awarding INR651.2 million with 9% simple interest per annum and INR5 million in costs. The insurance company then challenged the award before a single-judge bench of Delhi High Court, which set it aside.

Unison, represented by senior advocate Darpan Wadhwa, appealed to the division bench.

Unison relied on M/s Lancor Holdings Limited v Prem Kumar Menon and Ors (2025) and C Velusmay v K Indhera (2026) to submit that the delay alone is not sufficient to set aside an arbitral award.

Unison argued that the delay was explained and did not affect the findings.

The arbitration award was delayed due to the covid-19 pandemic and extensions sought by the parties in filing written submissions. The meetings of the arbitral tribunal to deliberate and analyse the submissions were also delayed due to the covid-19 pandemic.

It was also submitted that the delay did not adversely affect the award as it was detailed, reasoned and unanimous, and contained clear findings on all aspects.

Unison submitted that once the reasons for delay had been provided, the court cannot sit in judgment on whether the reasons are correct, adequate or sufficient.

For this, Unison relied on Punjab State Civil Supplies Corporation Limited & Anr v M/s Sanman Rice Mills & Ors (2024) and M/s Dyna Technologies Pvt Ltd v M/s Crompton Greaves Ltd (2019). Unison also submitted that the insurance company did not raise an objection to the delay at the time of the award.

The insurance company submitted that the single-judge bench had found the reasons cited for delay insufficient as a matter of fact.

The insurance company also submitted that delay alone is enough to set the award aside. For this, they relied on Oil & Natural Gas Corporation Ltd v SAW Pipes Ltd (2003), BWL Ltd v UOI & Anr (2016) and Harji Engg Works Pvt Ltd v M/s Bharat Heavy Electricals Ltd & Anr (2008).

It was submitted that the delay affected the award as it did not address the tribunal’s jurisdiction and that the pandemic alone did not explain the delay.

The court deliberated on the submissions and rejoinders filed by the parties along with the arbitration award. The court also discussed the decision in M/s Lancor Holdings Limited v Prem Kumar Menon and Ors (2025) and C Velusmay v K Indhera (2026).

Relying on Bombay Slum Redevelopment Corporation Private Limited v Samir Narain Bhojwani (2024), the court said that the present case warrants a remand as the single-judge bench did not refer to the merits.

The court disagreed with the insurance company’s submission that the delay was not sufficiently explained. It observed that if the pandemic lockdown period is excluded, the delay was only one year, attributable to the parties’ delay in filing submissions.

“Delay in rendition of an arbitral award is not, by itself, envisaged as a ground to set it aside … Delay becomes fatal only where it is unexplained, and imperils the findings in the award. These requirements are not met in the present case,” the court said.

The court allowed the appeal and remanded the case back to the single judge for consideration.

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