The Bombay High Court has dismissed a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award passed in favour of SBI Global Factors Ltd., holding that none of the grounds raised warranted judicial interference. Justice Sandeep V. Marne held that“mere delay in delivery of Award by itself cannot be a sufficient ground for setting aside the Award.”
The petition was filed by a former director and personal guarantor of Rayalseema Commodities Ltd., assailing an arbitral award dated April 4, 2024, which directed payment of over ₹43.45 crore towards domestic and reverse factoring facilities, along with interest at 18% per annum from April 2011. The award also directed specific performance of obligations under the original sanction letter and payment of arbitration costs.
The petitioner challenged the arbitral award on four grounds, alleging failure to establish subsisting debt, inordinate delay in delivery of the award, a casual approach in dealing with the plea of novation of the guarantee, and non-consideration of interim applications.
Rejecting the challenge, the Court held that the arbitral tribunal had adequately considered the material on record and rightly concluded that the debt stood admitted by the principal borrower. The Court further found no merit in the petitioner’s contention that enhancement of credit facilities amounted to novation of the guarantee, noting that the guarantee was expressly continuing and covered enhanced limits as well.
On the plea of inordinate delay in pronouncement of the award, the Court observed that mere delay, by itself, is not a ground for setting aside an arbitral award unless it is shown to have adversely affected the findings. In the present case, the Court noted that the petitioner had contributed to the delay by filing multiple applications and had failed to demonstrate any prejudice.
Holding that the arbitral award was reasoned, non-perverse, and consistent with settled law on the limited scope of interference under Section 34, the Court dismissed the petition.
Appearances
Mr. Haresh Jagtiani, Senior Advocate with Mr. V.N. Shingnapurkar, Mr. Harshad Shingnapurkar, Mr. Pushpvijay Kanoji, Mr. Pranay Kamdar, Mr. Ritwik Kulkarni and Mr. Dhananjay Nagarkar, for the Petitioner.
Mr. Cherag Balsara with Mr. Ashish Mehta and Ms. Jovita Pareira i/b. Mr. Raj Kakde, for Respondent No.1.
Mr. Mahesh Ayar, for Respondent No.2.
