SC Slaps Cost Of Rs 75L On Litigant For Re-filing Delay Of Over 1,000 Days In An Arbitration Matter Before Madras HC [Read Order]

In an arbitration matter pending before the Madras High Court, the Supreme Court imposed a cost of Rs. 75 lakh on a litigant whose application for condonation of representation delay of more than thousand days was allowed by the division bench.

R Krishnamurthy had preferred applications under Section 34 of the Arbitration and Conciliation Act, to set aside an arbitration award, with a re-presentation delay of more than 1,000 days. Though the applications were filed in time, some defects were noted by the registry and those were cured only after further 1,040 days.

When the matter came up before the single bench, it refused to condone the re-filing delay observing that the Arbitration Act is a special enactment that provides for speedy and expeditious resolution of disputes inter se the parties, such object cannot be frustrated by unexplained and unwarranted delay in procedural matters.

The division bench, setting aside the single bench order, condoned the delay, holding that Section 34 (3) does not apply to re-filing and that there is no limitation for re-filing. The delay in re-filing would be condonable subject to the applicant for condonation of delay being able to satisfy the Court that there was sufficient cause, the division bench had held.

The other party assailed this order before the apex court. Senior Advocate CA Sundaram appeared for the appellants and Senior Advocate Mukul Rohatgi for the other side.

A bench of Chief Justice of India Dipak Misra, Justice AM Khanwilkar and Justice DY Chandrachud observed: “We are of the considered opinion that the High Court should have imposed heavy costs for condoning the delay. In our considered opinion, the costs should be assessed at Rs.75,00,000/- (Rupees seventy-five lakhs only), to be paid by the respondent to the petitioner within a week hence. After the costs is paid, the learned Single Judge shall take up the application filed under Section 34 of the Arbitration and Conciliation Act, 1996. If the costs is not paid within the stipulated time, needless to say, the order passed by the learned Single Judge rejecting the condonation of delay shall stand revived. Needless to say, if the costs is paid, the learned Single Judge shall proceed and finalize the matter within a span of one month from the date of the deposit of the costs.”