Leave us a Message

Delay in Conclusion of Arbitration Proceedings

Arbitration in India is a difficult process because of a large number of reasons, one of which is the inordinate delay in the final conclusion of the arbitration proceedings.


Take for instance, the recent judgement of the Delhi High Court in the case of Rakesh Kumar v. Cideas Investment India Pvt. Ltd. 2015 SCC OnLine Del 14014.


The arbitration award was rendered on 09.12.2000. This was challenged in court under Section 34 of the Arbitration Act and the judgement was rendered in 05.10.2015. Subsequently, this judgement was unsuccessfully appealed in the Delhi High Court.


Thus, it took nearly 15 years for the arbitration to finally be concluded. While this case may be an example from the extreme end of the spectrum, it does demonstrate the need for change. It is against this background that the Arbitration Ordinance introduced significant changes to limit the time-period of an arbitration.


A new provision, Section 29A has been promulgated which shall impose a time restriction of 12 months on the tribunal to make its award, with incentives being prescribed if the award is rendered in 6 months by the tribunal. The 12 months time-period can be extended up to a period of 6 months by the parties consensually, but after that the time-period can only be extended by the court, on sufficient cause. The court is empowered to reduce the fees of the arbitrators if it finds that the delay was attributable to the tribunal.


Section 29B has been inserted in the Arbitration Act to make specific rules regarding fast-track procedure for dispute resolution. If the parties agree to the same, the awards shall be given in 6 months.


An amendment to the challenge procedure of awards, provides that an application challenging an award needs to be disposed of by the court within one year.


The fate of the ordinance is still undecided. It needs to be passed by both House of Parliament, failing which it shall lapse. Thus, an attempt has been made to make India more arbitration friendly and it is hoped that it sustains.

By : Adv. Niharika Dhall