[Arbitration Act] General Explanation Of Intra-departmental Analysis And Discussions Doesn't Constitute Credible Explanation For Delay In Filing Appeal: Delhi High Court
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju held that a general explanation of intra-departmental analysis and discussions doesn't constitute as valid and credible explanation for condonation of delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996. Brief Facts: The Appellant approached the Delhi High Court...
The Delhi High Court bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju held that a general explanation of intra-departmental analysis and discussions doesn't constitute as valid and credible explanation for condonation of delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996.
Brief Facts:
The Appellant approached the Delhi High Court and filed an application seeking condonation of a 118-day delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). It argued that although there is no specified limitation period for filing an appeal under Section 37 of the Arbitration Act, it is submitting the application out of an abundance of caution. The reasons provided for the delay included the time taken for intra-departmental analysis and discussions regarding challenging the impugned judgment and upholding the arbitral award.
It argued that the Appellant, being a Public Sector Undertaking (PSU), should be treated differently.
Observations by the High Court:
The High Court referred to the decision of the Supreme Court in N.V. International v. State of Assam & Ors. (2020) 2 SCC 109 where the SC held that the restriction on condoning delays exceeding 30 days in filing appeals under Section 37 of the Arbitration Act is guided by the proviso to Section 34(3) of the Arbitration Act. However, this stance was later revisited in the case of the Government of Maharashtra (Water Resources Department) Represented By Executive Engineer v. Borse Brothers Engineers and Contractors Pvt. Ltd.: (2021) 6 SCC 460. The Supreme Court overturned its earlier decision and held that while an elastic approach is inappropriate regarding delay in filing appeals under Section 37 of the Arbitration Act or under the Commercial Courts Act, 2015, the term "sufficient cause" for delay should not be stretched to accommodate lengthy delays, considering the imperative of speedy dispute resolution under both acts. The Supreme Court clarified that delays beyond 90 days, 30 days, or 60 days, respectively, for appeals governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, should be condoned only exceptionally, not routinely.
The High Court held that the Appellant failed to provide a credible explanation for the delay in filing the appeal within the stipulated time frame.
The bench held that:
“…. a broad general explanation that the intra-departmental analysis and discussions took time and that the steps in the formulation of the decision for further steps required the movement of proposal amidst the administrative hierarchy caused the delay clearly cannot be accepted as sufficient cause which prevented the appellant from filing the appeal within the stipulated period.”
Moreover, the High Court held that the delay in filing the appeal nearly doubled the period allotted for filing. Therefore, the High Court dismissed the application seeking condonation of the delay in filing the appeal.
Case Title: Telecommunication Consultants India Ltd (Tcil) Vs Ngbps Ltd
Citation: 2024 LiveLaw (Del) 693
Case Number: FAO(OS) (COMM) 171/2019
Advocate for the Petitioner: Mr Ratan K Singh, Sr Advocate with Mr Nikhlesh Krishnan, Ms Ritika Priya, and Mr Abhishek Bhushan Singh, Advocates.
Advocate for the Respondent: Mr T.S.Ahuja, Mr Varun S Ahuja and Ms Ridhi Kapoor, Advocates.
Date of Judgment: 28.05.2024