Section 37 A&C | Explanation For Delay Of 191 Days Is Sketchy And Doesn't Corelate Any Event To Specific Dates: Delhi High Court

Section 37 of the Arbitration and Conciliation Act, 1996 pertains to the appealable orders. This section outlines the orders from which an appeal can be filed. These orders include orders:

1. Granting or refusing to grant any measure under Section 9 (interim measures of protection),
2. Setting aside or refusing to set aside an arbitral award under Section 34 (application for setting aside arbitral award), and
3. Granting or refusing to grant interim relief under Section 17 (interim measures by the arbitral tribunal).

Brief Facts:

The Appellant initially filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), challenging an arbitral award. The Commercial Court, however, rejected this application, affirming the validity of the award. The Commercial Court held that the award did not contravene Indian public policy nor did it contain any overt legal defects undermining its integrity.

The Appellant subsequently approached the Delhi High Court (“High Court”) and appealed the decision of the Commercial Court on 21.08.2023, marking a significant delay of 191 days. In justification of this delay, the Appellant cited several reasons. Firstly, it pointed to a change in personnel responsible for the case, resulting in information gaps and delays in collating necessary documentation. Additionally, it highlighted resource constraints stemming from annual audit obligations in FY 2022-23, which diverted the attention of its regulatory and legal team. Finally, it noted personal difficulties faced by the person-in-charge of approving facts crucial to the appeal, leading to further delays in processing the case.

Observations by the High Court:

The High Court held that the explanation offered by the Appellant lacked specificity, failing to correlate events to specific dates osr time periods. Furthermore, the High Court highlighted the absence of details regarding the identity of the individual responsible for the project, whose change purportedly contributed to the delay. The Appellant's explanation also failed to elucidate why this person was inaccessible. Moreover, the High Court expressed skepticism regarding the argument that audit compliances and management approval hindered the filing process. These reasons, according to the High Court, did not suffice to justify the considerable delay.

Referring to the Supreme Court in Government of Maharashtra (Water Resources Department) v. M/s Borse Brothers Engineers and Contractors Pvt. Ltd. (2021) 6 SCC 460, the High Court held that there is a need to balance the objective of speedy dispute resolution, particularly in commercial matters, with the principle of condoning delays only in exceptional circumstances. The High Court underscored that the phrase "sufficient cause" should not be stretched to accommodate prolonged delays, especially beyond the specified appeal period.

In the present case, where the delay in filing the appeal exceeded three times the allotted period of sixty days, the High Court found the explanation provided by the appellant insufficient to constitute a "sufficient cause" for the delay.

Consequently, the High Court dismissed the application seeking condonation of delay.

Case Title: M/S Delhi Msw Solutions Limited vs Amity Software Systems Limited

Citation: 2024 LiveLaw (Del) 382

Case Number: FAO (COMM) 185/2023 and CM Nos.47859/2023 & 59604/2023

Advocate for the Petitioner: Mr Matrugupta Mishra, Ms Sonakshi and Ms Akanksha V. Ingole, Advocates.

Advocate for the Respondent: Mr Saurabh Bhargavan and Ms Ibansara Syiemlieh, Advocates.

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