The Delhi High Court has dismissed an appeal challenging an arbitral award directing repayment of a friendly loan of ₹6 lakh along with interest, holding that mere delay in pronouncement of the arbitral award is not a ground to set it aside unless prejudice is demonstrated.
A Division Bench comprising Justice Anil Kshetarpal and Justice Amit Mahajan was hearing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, against an order of the Commercial Court which had dismissed objections to an arbitral award dated 15 November 2019.
The dispute arose out of two mortgage agreements under which the respondent had advanced a total sum of ₹6 lakh to the appellant. The arbitral tribunal had directed repayment of the principal amount along with quantified interest for a specified period, future interest at 8% per annum until realisation, enhanced interest at 10% per annum in case of default beyond 90 days, and litigation costs.
Before the High Court, the appellant contended that the award was liable to be set aside on account of a delay of about fourteen months in its pronouncement after the matter was reserved, and further argued that there was no admission of liability for the entire loan amount. It was also urged that the mortgage documents relied upon were unregistered and insufficiently stamped.
Rejecting these submissions, the Court relied on the Supreme Court’s recent decision holding that delay in delivery of an arbitral award, by itself, does not vitiate the award unless it is shown to be undue, unexplained, and prejudicial. On facts, the Court found that the appellant had failed to demonstrate any prejudice caused by the delay.
The Court also noted that the appellant had categorically admitted to having borrowed an aggregate amount of ₹6 lakh, albeit in tranches, notwithstanding his claim of partial repayment.
The Court further held that Section 36 of the Indian Stamp Act, 1899 bars a party from questioning the admissibility of an insufficiently stamped document once it has been admitted in evidence. It also noted that even independently of the mortgage agreements, the respondent had successfully established her claim, particularly in view of the appellant’s admission that he had borrowed ₹6 lakh in tranches.
Emphasising the limited scope of interference under Sections 34 and 37 of the Arbitration Act, the Court held that it could not re-appreciate evidence or revisit concurrent findings of fact unless patent illegality or violation of public policy was shown. Finding no such ground, the Court dismissed the appeal and upheld the arbitral award.
Appearances
Appellant- Mr. Saurabh Kansal, Adv.
Respondent- Mr. Rohan Ahuja, Adv.
