Delay in Pronouncing an Arbitral Award: Delhi High Court

By Lucy Rana, Nihit Nagpal and Vaibhav Mehra

A two-year gap between reserving and pronouncing an award is a long silence, but it is not, on its own, a reason to set the award aside. In Unison Hotels v. IFFCO Tokio, a Division Bench of the High Court of Delhi at New Delhi has confirmed that delay in pronouncing an arbitral award vitiates it only where the delay is unexplained and has demonstrably affected the findings, and has sent a ₹65 crore insurance award back for a fresh hearing on its merits.

For most litigants, the time taken to reach a final, enforceable result matters as much as the result itself. Arbitration in India was reshaped by the Arbitration and Conciliation Act, 1996 precisely to shorten that wait. The Division Bench decision in Unison Hotels Private Limited v. IFFCO Tokio General Insurance Company Limited addresses what happens when the delay arises inside the arbitration itself, after the award is reserved, and whether setting such an award aside cures the problem or prolongs it.

Why delay in pronouncing an arbitral award matters

Arbitration in India grew out of frustration with delay. The Indian Arbitration Act, 1899, provisions of the Code of Civil Procedure, 1908 and the Arbitration Act, 1940 each sought a quicker forum than the ordinary courts. The 1940 regime did not deliver it. In Guru Nanak Foundation v. Rattan Singh & Sons, the Supreme Court of India observed that the way proceedings under that Act were conducted and challenged had given an informal, party-chosen forum a degree of procedural complexity that defeated its purpose.

Liberalisation in 1991 made reform pressing, and Parliament enacted the Arbitration and Conciliation Act, 1996 (the “Act”), drawing on the UNCITRAL Model Law on International Commercial Arbitration, 1985 and the UNCITRAL Conciliation Rules, 1980. Among its aims was to minimise the supervisory role of courts. Later amendments pursued the same goal, most visibly Section 29A, inserted in 2015 and amended in 2019, which prescribes a time-bound framework for making awards in specified proceedings, alongside a policy push towards institutional arbitration.

The period most exposed to delay is the one between the close of hearings and the pronouncement of the award. Once arguments end and the award is reserved, the parties have no further role. A long, unexplained silence leaves them uncertain about when the dispute will end and whether their submissions were weighed while still fresh. Speed, however, cannot come at the cost of reasoned adjudication, and that tension is what the Unison Hotels judgment resolves.

Section 34: delay is not a listed ground of challenge

Section 34 of the Act permits an award to be set aside only on limited grounds, including conflict with the public policy of India under Section 34(2)(b)(ii) and, in domestic arbitrations, patent illegality appearing on the face of the award under Section 34(2A). Delay in pronouncing an award is not among them. Courts in India have therefore had to decide when, if at all, a delayed award falls within one of the existing grounds.

The dispute: Unison Hotels v. IFFCO Tokio

Unison Hotels Private Limited (“UHPL”) insured its hotel with IFFCO Tokio General Insurance Company Limited (“IFFCO”) under a Standard Fire and Special Perils Policy for approximately ₹186.44 crore and a Fire Loss of Profit Policy for ₹100 crore. A fire broke out at the hotel on 26 January 2008. UHPL claimed approximately ₹68.64 crore and ₹100 crore under the two policies. IFFCO paid ₹20 crore and ₹30 crore respectively, and maintained that the claims were fully and finally settled on 30 January 2012.

UHPL invoked arbitration under Clause 13, common to both policies, and a three-member tribunal was constituted on 27 April 2012. A preliminary issue was whether accepting the settlement amounts and signing discharge vouchers barred further claims; the tribunal found the settlement was not voluntary and decided the claims on merits. It reserved its award on 6 March 2021 and pronounced it on 6 March 2023, two years later, directing IFFCO to pay ₹65,12,97,874 with simple interest at 9% per annum from 7 September 2012 until the award and at the same rate until realisation, together with costs of ₹50 lakh.

The Single Judge’s judgment of 30 January 2026

IFFCO challenged the award under Section 34 before the High Court of Delhi, principally on the ground of inordinate and unexplained delay. It also questioned jurisdiction under Clause 13, which confined arbitration to disputes over quantum where liability was admitted, and relied on the discharge vouchers. UHPL answered that the settlement was involuntary, that accord and satisfaction had already been examined, and that under Lancor Holdings Limited v. Prem Kumar Menon delay could vitiate an award only if unexplained and shown to have affected the findings.

The Single Judge accepted that delay is not an automatic ground for setting aside, but held that prolonged delay can affect an arbitrator’s recollection of submissions. The explanations offered, namely the COVID-19 pandemic, belated written submissions and difficulty in convening the arbitrators, were found insufficient, and the delay was held to have affected the treatment of the Clause 13 objection. The award was set aside for inordinate delay and patent illegality on 30 January 2026, without examination of the findings on merits. UHPL appealed under Section 37.

The appeal under Section 37: the parties’ cases

The central question for the Division Bench was whether an award could be set aside merely because two years had passed between reservation and pronouncement. The parties also addressed the scope of Section 37, the remedy under Section 14, arbitrability under Clause 13 and the weight of earlier decisions.

UHPL argued that the Single Judge had not identified any finding affected by the delay. Relying on Lancor Holdings and C. Velusamy v. K. Indhera, it submitted that the delay was explained by the pandemic, written submissions filed late and the deliberations of a three-member tribunal, and that IFFCO could not point to any argument left unconsidered. IFFCO contended that prolonged delay was itself contrary to public policy and could amount to patent illegality, that the explanations were inadequate, and that the Clause 13 objection had suffered. It relied on Delhi Development Authority v. G.L. Litmus Events (P) Ltd., where an award was set aside after an unexplained delay of about nineteen months. In rejoinder, UHPL said G.L. Litmus was distinguishable and that IFFCO had never specifically invoked Clause 13 before the tribunal, its objection having been accord and satisfaction.

The Division Bench’s analysis: the Lancor Holdings two-part test

Delay alone is not enough. The Division Bench relied on Lancor Holdings, where the Supreme Court considered an award delivered after nearly four years and held that delay cannot, by itself, justify setting an award aside; the question is whether the delay is unexplained and has adversely affected the findings. In Lancor Holdings the award was itself defective, with inconsistent reasoning and a failure to resolve the disputes, and it was that effect, not the passage of time, that justified interference. C. Velusamy reiterated that delay renders an award vulnerable only where its adverse effect is apparent from the findings. The two requirements are therefore cumulative: the delay must be unexplained, and the findings must have been affected.

Apprehension is not proof. The Single Judge had not identified any affected finding; the conclusion rested on the apprehension that arbitrators may have forgotten the arguments. The Division Bench held that such a presumption cannot justify setting aside an award under Section 34. The possibility that a submission escaped attention is materially different from showing that an argument was actually left unconsidered or a finding actually impaired.

The delay was explained. The proceedings coincided with the COVID-19 pandemic; although hearings closed on 6 March 2021, written submissions were filed only in August 2021 after extensions; and a three-member tribunal needed to deliberate and agree on a unanimous award. Together, these explained the delay. Neither party objected while the award was reserved, and IFFCO raised delay for the first time in its Section 34 petition. On examining the award, the Bench found the issues dealt with in considerable detail; IFFCO could not identify a single argument left unconsidered.

Clause 13 and G.L. Litmus Events. IFFCO had not pleaded a specific Clause 13 objection before the tribunal; its objection was accord and satisfaction, which the tribunal examined and rejected. IFFCO had not categorically denied liability for the insured loss, the dispute being essentially one of quantum, so the tribunal’s findings effectively addressed maintainability. G.L. Litmus Events was distinguished: there the delay was unexplained and the parties had repeatedly pressed the arbitrator to pronounce the award, and C. Velusamy was decided later.

Section 14 is not a precondition. The Bench clarified that applying under Section 14 to terminate an arbitrator’s mandate for undue delay is not a mandatory precondition to a Section 34 challenge to a delayed award, although that challenge must still satisfy the statutory grounds.

Outcome: judgment set aside and the Section 34 petition remanded

The Division Bench held that the Single Judge erred in setting aside the award on account of delay, that the delay was adequately explained, and that no finding was shown to have been adversely affected. Because the Single Judge had declined to examine the findings on merits, even though the effect of delay on those findings was central, the Bench relied on Bombay Slum Redevelopment Corporation (P) Ltd. v. Samir Narain Bhojwani, which recognises remand under Section 37 in exceptional cases, including where a Section 34 petition was disposed of without considering its merits. The judgment of 30 January 2026 was set aside and the Section 34 petition remanded for fresh consideration, uninfluenced by the earlier findings. The appeal was allowed with no order as to costs.

A precise word on what the court has, and has not, held

The Division Bench decided only whether the award could be set aside on the ground of delay. It did not uphold the award on its merits; the remaining grounds of challenge, including the Clause 13 jurisdictional objection, fall to be decided by the Single Judge on remand.

What it means for parties, counsel and arbitral tribunals in India

• Challengers must point to the damage. a Section 34 challenge founded on delay needs to identify the specific argument left unconsidered or the finding impaired; time elapsed, however long, is not a substitute.
• Objections during reservation count. the Court weighed the fact that neither party objected while the award was reserved. Parties concerned about delay have Section 14, and, where it applies, the Section 29A framework, available while the reference is pending.
• Tribunals should record their reasons. a short explanation in the award of why it took the time it did, such as late submissions, unavailability or deliberation, is likely to be decisive if delay is later alleged.
• Award holders should preserve the record. a well-reasoned award that deals with every issue raised is the best defence against a delay-based challenge.

Why this matters

Setting aside a reasoned award solely because it was late sends the parties back to the start, which is the very outcome arbitration in India is meant to avoid. The Unison Hotels ruling keeps the focus where Section 34 places it, on the quality of the adjudication, while leaving room for interference where delay has genuinely damaged the award.

Frequently Asked Questions

Sources: Unison Hotels Private Limited v. IFFCO Tokio General Insurance Company Limited, FAO(OS)(COMM) 29/2026, High Court of Delhi (Division Bench), decided 16.09.2026, 2026:DHC:7875-DB; Lancor Holdings Limited v. Prem Kumar Menon, 2025 SCC OnLine SC 2319; C. Velusamy v. K. Indhera, 2026 SCC OnLine SC 142; Delhi Development Authority v. G.L. Litmus Events (P) Ltd., 2025 SCC OnLine Del 9906; Bombay Slum Redevelopment Corporation (P) Ltd. v. Samir Narain Bhojwani, (2024) 7 SCC 218; Guru Nanak Foundation v. Rattan Singh & Sons, (1981) 4 SCC 634. Statutory framework: Arbitration and Conciliation Act, 1996: Sections 14, 29A, 34 (including Section 34(2)(b)(ii) and 34(2A)) and 37; Arbitration and Conciliation (Amendment) Acts, 2015 and 2019; Arbitration Act, 1940; Indian Arbitration Act, 1899; UNCITRAL Model Law on International Commercial Arbitration, 1985; UNCITRAL Conciliation Rules, 1980. The Division Bench remanded the Section 34 petition and did not decide the merits of the award; the article states this expressly.

Disclaimer: This article is published for general information and educational purposes only. It does not constitute legal advice and is not intended as an advertisement or solicitation of work. Readers should obtain specific professional advice before acting on any matter discussed here.

For more information on Arbitration, Domestic and International Commercial Arbitration, Institutional and Ad Hoc Arbitration, Appointment of Arbitrators, Interim Measures under Section 9, Termination of Mandate under Section 14, Time Limits under Section 29A, Challenges to Arbitral Awards under Section 34, Appeals under Section 37, Enforcement of Domestic and Foreign Awards, Mediation and Commercial Dispute Resolution, Delay in Pronouncing an Arbitral Award, Delayed Arbitral Award in India, Setting Aside Arbitral Award, Section 34 Challenges, Patent Illegality, Public Policy of India, Section 29A Time Limits, Section 14 Termination of Mandate, Section 37 Appeals, Unison Hotels v IFFCO Tokio Delhi High Court, Section 34, Unison Hotels V. IFFCO Tokio, Lancor Holdings, Section 29A, Section 14, Section 37, and Delhi High Court in India write to us at info@ssrana.com

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