'File Movement' & 'Change In Counsel' Not Sufficient Cause For Condonation Of Delay In Filing S.37 Arbitral Appeals: Delhi High Court

The Delhi High Court bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has held that mere movement of file and change in counsel due to administrative issues does not constitute “sufficient cause” to condone inordinate delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996.The court reiterated that for appeals under Section 37 that are governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule.Brief Facts Union of India (Appellant) awarded a contract to M/s Rajiv Aggarwal (Engineers and Contractors) on 16.12.2015 for construction works at Shakur Basti. The Railways terminated the contract on 13.06.2016. Disputes arose because of delay in the project for which the contractor blamed the Railways. The matter was referred to Delhi International Arbitration Centre. The sole arbitrator passed an award on 15.06.2018, partly allowing the contractor's claims. The Appellant challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, which dismissed the petition on 1.07.2023, holding that the arbitral award was reasoned and just. The Appellant filed the appeal under Section 37(1)(c) read with Section 13(1) of the Commercial Courts Act, 2015, assailing the impugned judgement. The Appellant also filed an application for condonation of delay of 613 days on the ground that the matter was initially marked to a different panel Counsel of the Railways and due to movement of file. Observations The Court observed that the limitation period for filing appeals under Section 37 is governed by Section 13(1) of the Commercial Courts Act, which is 60 days from the date of judgment/ order. It noted that by way of judicial decisions, the provisions of the Limitation Act, 1963 have also been held to be applicable to such appeals. The Court relied on the judgment in Government of Maharashtra v. Borse Brothers Engineers & Contractors Pvt. Ltd., where the Supreme Court observed that “The expression 'sufficient cause' is not itself a loose panacea for the ill of pressing negligent and stale claims.” The court had further observed that given the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under Section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. The court held that: “The object of speedy disposal under the Act would only be achieved by making such appeals also bound by the limitation period which is prescribed for filing of petitions under Section 34 of the Act.” The court also referred to Delco Infrastructure Projects Pvt. Ltd. v. Intec Capital Ltd., where the Supreme Court observed that “Any delay in filing appeals under Section 13(1A) of the Commercial Courts Act, 2015 cannot be condoned unless the court is satisfied that the appellants were prevented from sufficient cause from filing the appeal within the stipulated time.” The Court held that 'change in counsel due to administrative issues' and 'movement of file' is not a “sufficient cause” for condonation of delay of 613 days. In view of the pronouncement in Borse Brothers, the Court refused to condone the delay and dismissed the appeal on the ground of being barred by limitation. Case Title: Union of India v. M/s Rajiv Aggarwal (Engineers and Contractors)Citation: 2025 LiveLaw (Del) 695 Case Number: FAO(COMM) 142/2025 & CM APPLs. 32316-18/2025 Counsel for Appellant: Mr. Farman Ali, Mr. Taha Yasin, Ms. Usha Jamnal, and Mr. Dhruv Arora, Advocates Date of Judgment: 28.05.2025 Click Here To Read/Download Order

'File Movement' & 'Change In Counsel' Not Sufficient Cause For Condonation Of Delay In Filing S.37 Arbitral Appeals: Delhi High Court

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Tazeen Ahmed

'File Movement' & 'Change In Counsel' Not Sufficient Cause For Condonation Of Delay In Filing S.37 Arbitral Appeals: Delhi High Court

Tazeen Ahmed

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