Bombay High Court Sets Aside Arbitral Award Passed With “Undue Haste” After Four-Year Delay

The Bombay High Court has set aside an arbitral award, holding that it was passed in undue haste after nearly four years of inaction and without giving the parties any opportunity of hearing.A Single Bench of Justice Sandeep V Marne found that the arbitrator acted with undue haste and in clear breach of natural justice. Rejecting the explanation offered for the long delay, the Court said, “The explanation put forth by the Arbitrator for the delay is factually incorrect. The Arbitrator has not heard the parties before making the Award. No evidence is recorded. No arguments are heard.” Amit Engineers, a government contractor, had been engaged by the Central Railway for a three-year contract to maintain Roof Mounted Package Units fitted on air-conditioned railway coaches across several divisions. Differences over payments and performance followed. Arbitration was invoked more than once, and in August 2015, a Deputy Chief Accounts Officer of the Railway was appointed as the sole arbitrator. The contractor filed its claims in December that year. After some early procedures, the proceedings slowed to a halt. One hearing took place in June 2017. After that, nothing moved for years. Even so, the arbitrator went on to pass an award on May 31, 2021, rejecting all the contractor's claims. Before the High Court, the contractor argued that the arbitrator had effectively abandoned the proceedings and that his mandate had come to an end long before the award was made. It was also pointed out that the award was delivered without any hearing, even though the arbitrator had been informed that a petition seeking his substitution was pending. The railway administration resisted the challenge, saying the arbitration had begun before statutory timelines were introduced in 2015 and that delay alone could not invalidate the award. The court was not persuaded. It noted that the arbitrator's reliance on the Covid-19 pandemic to explain the delay did not hold up, as there were no restrictions in place between June 2017 and March 2020. The bench also found that although hearing dates were fixed for April 28 and May 20, 2021, no hearing actually took place. The arbitrator, the court said, “clearly misconducted” himself by calling three meetings held years earlier hearings on “many occasions”, by taking shelter under a non-existent pandemic to explain the delay, and by suddenly rushing to deliver the award after learning that his substitution was being sought. “The manner in which the Arbitrator has conducted himself in the proceedings does not appeal to this Court. The Award is in conflict with public policy doctrine,” the Bench observed. The High Court accordingly set aside the arbitral award dated May 31, 2021. It also noted that a fresh arbitral tribunal had already been constituted to decide the disputes afresh.Case Title: Amit Engineers v. Union of India & Ors.Citation: 2026 LLBiz HC (BOM) 5Case Number: Commercial Arbitration Petition No. 847 of 2024For Petitioner: Advocates Minakshi Jyoti and Anmol Jain; For Respondents: Advocate Narayan R. Bubna Click Here To Read/Download Order

Bombay High Court Sets Aside Arbitral Award Passed With “Undue Haste” After Four-Year Delay

Shivani PS

Tags