Back
Bombay High Court Condoned 530-Day Delay in China Fortune Foreign Award Enforcement
The has condoned a 530-day delay in 's petition to enforce a foreign arbitral award, ruling that the pre-Vedanta uncertainty over the applicable constituted for the delay. Justice Arif S. Doctor observed that to deprive the award-holder of its enforcement rights in these circumstances would be " ."
A Costly Dispute, a Lingering Award
The dispute traces back to a Voyage Charterparty Agreement dated , between China Fortune and . The agreement mandated arbitration in London under English law. The arbitral tribunal, on , dismissed both parties' claims but reserved costs. A subsequent order on , directed Gandhar Oil to bear 90% of China Fortune's arbitration costs, with quantification left to the parties. When they failed to agree, the tribunal issued an Award of Assessed Costs on , which was not challenged and attained finality.
The assessed-costs award was transmitted to the parties' advocates on . Nearly four years later, on , China Fortune sent a demand notice to Gandhar Oil, which was rejected on . China Fortune then filed its under , on —a delay of 530 days if measured from .
Two Paths to the Same Door
China Fortune advanced two arguments. Primarily, it relied on the 's landmark ruling in Government of India v. Vedanta Limited (2020), which held that the for enforcing a is three years from the date the accrues—and that right accrues when the award-holder makes a demand for payment, not from the award date. Under this logic, the petition was filed within three years of the February 2021 demand.
In the alternative, China Fortune sought condonation of the delay. It pointed to the then-prevailing uncertainty: before Vedanta , the 's decision in had treated the as twelve years. This legal fog, coupled with the , constituted " " for the delay.
Gandhar Oil countered that the accrued on —when the award was made available for collection upon payment—or at latest on . Even taking the later date, the three-year period expired on January 5, 2020, well before the petition was filed. It argued that uncertainty in law does not amount to , and that the COVID-19 exclusion could not revive an already-expired .
Clearing the Legal Fog
Justice Doctor rejected the respondent's that a prayer for condonation cannot be sought in the alternative. Relying on , the court noted that parties are entitled to raise alternative, even inconsistent, pleas. It also cited a line of decisions where condonation was granted when sought in the alternative.
On the merits, the court found that before Vedanta , there was indeed a lack of clarity and on the for enforcing foreign awards. The itself had acknowledged this uncertainty in Vedanta and held that it could constitute for condoning delay. Applying that reasoning, the court held that the entire period from (when the award was transmitted) to (when Vedanta was decided) was attributable to this and deserved condonation.
For the period after Vedanta , the court noted that the restrictions, beginning , and the 's extension of limitation orders, entitled China Fortune to exclusion of the period from to . The court also accepted the specific explanations provided by China Fortune for its inaction during this period.
The court further rejected Gandhar Oil's belated argument that limitation began on , noting that the respondent's own pleaded case treated as the relevant date. More fundamentally, since Gandhar Oil was obligated to pay the costs but had failed to do so, it could not take advantage of its own default to claim an earlier start of limitation.
Key Observations
The court made several critical observations:
"I find that the Petitioner has made out a case for condonation of the delay. Given the lack of clarity regarding the period of limitation applicable to the enforcement of a , which was finally resolved on 16th September 2020, when the Hon’ble delivered its decision in Vedanta , the Petitioner is entitled to condonation of the delay for the period from 5th January 2017 to 16th September 2020."
"To deprive the Petitioner of its right to seek enforcement of thewould be."
"The Respondent cannot be permitted to take advantage of its own default by contending that limitation commenced on 31st October 2016."
A Second Chance for Enforcement
The court allowed the interim application in terms of prayer clause (b), condoning the 530-day delay and permitting China Fortune's to proceed on merits. The decision reinforces that the pre- Vedanta is a legitimate ground for condonation, and that courts will not allow procedural technicalities to defeat substantive rights when the delay is explained by genuine confusion in the law. The ruling also clarifies that the COVID-19 applies even where the ordinary had already expired before the pandemic began.
