Delhi HC – Pandemic Exclusion Preserves Arbitrator Mandate – UOI’s Challenge to arbitral award Dismissed
The disputes for delay in payment of final bill, claims of prolonged bank guarantees, delayed or under payments of Running Account Receipts, claims for deviation of works and additional items.
The pleadings were completed on 24.5.2021 and the period of 12 months expired on 23.5.2022. No extension as obtained.
On 10.4.2023, the UOI filed section 29A application for termination of arbitration on the ground that the mandate has expired. The order on this application was reserved and dealt with in the impugned Award dated 27.8.2023 allowing partly claims of the respondent.
The Award was challenged on two grounds that it was passed after expiry of mandate and interest at 12% per annum was not legal.
Section 3(b) of the Interest Act – interest could be awarded if a written demand notice had been issued by the claimant. No such notice was given.
HELD that the pandemic excludes the period from 2020 to 2022 and therefore, the award was passed in time. Moreover, on one hand the petitioner assets that the mandate of the Arbitrator expired on 23.5.2022 but section 29A application was filed on 10.3.2023. Moreover, despite raising the objection, the petitioner had actively participated in the arbitral proceedings without pursuing further remedial steps. Not only that but the petitioner had advanced arguments on merits on 12.4.2023 and 21.4.202 and also participated in the hearing of 8.5.2023.
A party cannot be permitted to participate in arbitral proceedings, invite adjudication on merits, and thereafter challenge the very jurisdiction of the tribunal only after the outcome proves unfavourable. To permit such conduct would undermine the finality, efficiency and credibility that the arbitral process seeks to achieve.
Judgment dated 1.4.2026 of the High Court of Delhi in O.M.P. (COMM) 73/2024 of Union of India Vs. M/s. Varindera Constructions Ltd
